State-Owned Sugar Millers in Trouble as Government says No to Capital Injection

State-owned sugar millers that fail to revive their operations on their own by May 2019 will no longer receive government bailouts.

According to the Mwangi Kiunjuri, the Agricultural Cabinet Secretary, the companies perpetually needs help from the government but are still unable to pay farmers’ debts and other creditors as well.

“The government is not ready to inject any more capital into the factories. There is no way the state will fund factories every year when they are in business,” Kiunjuri said while touring Nzoia Sugar factory.

He noted that Nzoia sugar was one of the factories that has received more than 1 billion shillings yet it hasn’t paid off its debt to the farmers.

The CS, who was in the company of his devolution comrade, Eugene Wamalwa also directed his comments to Sony, Chemelil, Muhoroni, and Miwani sugar. He said that firms that show the signs of improvement in the next six months will receive funds to support their operations.

The CS told farmers last week that they have to be a bit patient for the 2.6 billion shillings owed by the millers following the deliveries dating back to four years ago. He said that they will undergo vetting to establish whether they are genuine or not.

“We are not going to pay ghost farmers as was the case with maize farmers. Instead, we have constituted a committee with officials from the ministry as well as the sugar companies to vet all farmers the factories owe money,” he said.

He also assured Nzoia Sugar farmers that their due will be paid before December 12 2018.

Meanwhile, the irony continues since all the five sugar companies were identified for privatization by the government barely two weeks ago.