NAIROBI, Kenya – The government has successfully completed the long-awaited leasing of four major public sugar factories, marking a crucial step towards rejuvenating Kenya’s ailing sugar sector.
Agriculture and Livestock Development CS Mutahi Kagwe announced that Nzoia, Chemelil, Sony, and Muhoroni sugar companies have been handed over to private millers under a 30-year lease agreement.
The new lease arrangements will see Nzoia Sugar operated by West Kenya Sugar Company, Chemelil taken over by Kibos Sugar and Allied Industries, Sony Sugar managed by Busia Sugar Industry Ltd., and Muhoroni now under the management of West Valley Sugar Company.
In his remarks, Kagwe highlighted the importance of the leasing model, which was embraced following thorough consultations with stakeholders, including Parliament, courts, and the local communities.
Unlike the privatization route initially proposed, which was rejected after public review, the leasing approach allows for private investment while maintaining public ownership of the assets.
Kagwe emphasized that this transformation is not merely about profit-making but is focused on restoring dignity to the thousands of families that rely on sugar farming and processing.
The government will oversee operations, ensuring accountability while letting private operators bring in the necessary capital, expertise, and efficiency.
The move follows years of public engagement, legislative processes, and legal scrutiny, aimed at reviving the sector without losing control over strategic national assets.
Kagwe also addressed the financial challenges faced by the sector, stating that the government has cleared Sh1.7 billion in farmer arrears and is committed to paying an additional Sh500 million by July 2025.
On the workers’ side, the government has pledged to pay outstanding salaries, with a plan in place to settle Sh5.6 billion owed to factory workers.
Under a new Memorandum of Understanding with the Kenya Union of Sugar Plantation and Allied Workers (KUSPAW), the government will continue to cover salary arrears, pensions, and statutory deductions during a 12-month transition period.
While the factories are leased, Kagwe reassured the public that the government retains ownership of the land and infrastructure, with market-based lease rates and revenues channeled into reinvestment initiatives for local communities and cane development.
This step, according to Kagwe, will be a vital part of transforming Kenya’s sugar belt into a thriving sector once again.
