What Was the Real Reason Behind the Collapse of Mumias Sugar?

By Korir Isaac / Published December 29, 2021 | 8:20 am




KEY POINTS

The only thing closest to the truth is that Mumias Sugar was killed by unfavorable tax regimes, a tug of war between local communities and leaders, investors, and other prominent politicians.


Mumias Sugar Entrance of Mumias Sugar Company.

The story of Mumias Sugar company, which was once the pride of western Kenya has become a perpetual topic with unending sentiments. Despite all these comments, the only thing closest to the truth is that this sugar manufacturer was killed by unfavorable tax regimes, a tug of war between local communities and leaders, investors, and other prominent politicians.

This, however, may not be considered true by some people. While I believe that farmers across the country have had a fair share of such challenges with companies collapsing and factories closing, other people believe that issues such as the ones facing Mumias Sugar have other underlying causes.

For instance, I came across this huge Twitter thread by Soko Analyst, a financial expert born and bred in western Kenya. He claims that when it comes to the people of Western, it seems like their fate was already decided by corrupt leaders who want to line up their pockets by milking companies dry, case in point Mumias Sugar.

In his own words, this sugar company had everything you would want as a successful middle-class executive and for the majority of people from Western, that was the destination. Sadly, by the time he was an adult, Mumias Sugar wasn’t what it was when growing up. It had lost its shine and glory. It was a shell of its past. It was a bell used by politicians to line up their pockets & exploit the farmers.

Soko Analyst holds that if Mumias Sugar was in Central or Rift Valley, the story would be so different. It would be functional and very successful; the youth and farmers of those areas would be happy. Here is how the thread goes:

Truth is, if Mumias was in Central or Rift Valley, no northern community would come near it or no other race would be allowed to manage. The Kikuyu’s or the Kalenjins would make it work. Period. This is the truth to we are refusing to discuss Mumias Sugar’s bidding.

Mumias is a gold mine that if given to the right people, will rise again like the phoenix and do even better than it did before. Farmers will make money; the youth will have jobs and the economy of the region will pick up. Value add is KEY.

Kakamega County is top 10 in the counties that contribute to the GDP of Kenya and with a proper running of Mumias Sugar Company, it will rise five places to become among the top 5 in the country. Why?

  • If Mumias Sugar was in another region, no other people or group would have been given to run it except the KEY stakeholders who are the farmers. Yet in Western, its leadership has ignored the role of farmers and abdicated their role to others.
  • Public Participation is a core aspect of any engagement and given that Western Kenya is an Agrarian economy, farmers should have been the priority to be engaged in Mumias Sugar bidding but they were not.
  • No one has asked the locals what they think about the lease of their KEY assets to foreigners. Yet they are the ones who produce the needed raw materials.
  • No one is fair in the interests of farmers. We must be fair and we must put the interest of the farmers first, NOT just the creditors. In fact, an inquest into the alleged amounts owed to these firms should have been done first because corruption reigned supreme at the firm for a while
  • Mumias is going through the same issues Webuye Pan Paper experienced. The town is still dead because Pan Paper’s revival was a lie that leaders told its people, and they believed. Pan Paper was sold for a song. Valued at 20B, it was sold for 900M because the Western Leadership was bribed with money for their campaigns to look the other way, nowadays Pan Paper is a go down for sugar. Having been stripped of its machines that were taken to Zambia.

According to Soko Analyst, some of the hard questions we need to interrogate include:

  • All these billions owed to creditors, how were they used? Who was in charge? Where is the paper trail? These are the questions that we need to interrogate. Because the factory doesn’t show anything that it borrowed all those billions.
  • Who is representing the farmers in all these so-called bidding processes and transactions that seem to have handed the factory to a foreign firm with a dubious background? Where was the process for us to audit?
  • Was there public participation for those with any form of interest in the factory to be allowed to speak up? Is there e no local firm that can manage this factory better?
  • Where is the Western Political Class? Isn’t the economy of this country a function of politics? Has Western Kenya no people who can properly manage the factory to return it to profitability and for farmers to see value for their cane?

As a key stakeholder in the revival of Mumias, Soko Analyst would like to see the process of how the Sarrai Group was awarded the lease. What did they have that local, African-owned firms did not have to win the bid? What powers pulled the strings behind the curtains?

Farmers from the region are not comfortable with the lease to Sarrai Group. They are demanding that the process be halted, proper public participation be held and the process be started afresh with a caveat: that all those who stole money from it be prosecuted.

People of Western are more than capable to manage their factories and it is time they spoke out against corruption and claim what’s rightfully theirs.

The people of the region feel that they have been played and taken of advantage for far too long. For the case of the Twitter thread, the author noted that the award to Sarrai Group is repugnant, corrupt, and insensitive to the people of Western and the government must stop it henceforth.

He calls for a local firm, owned by Africans to manage Mumias revival because their profits will be reinvested back to Kenya NOT taken out of the country. All the money should circulate within Kenya’s economy, not outside the country and as we head into the 2022 elections, this should be an exemplary lesson for local leaders.

What do you think of Soko Analyst’s views? Let us know in the comments below.




About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


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