NLC's proposal to sell state-owned sugar firms' land blocked

Privatisation commission is only reducing government shares (51%) and urges leaders and farmers to buy

In Summary

•The government has been trying to privatise sugar millers since their fortunes started dwindling and debts accrued.

•Privatisation Commission chairman says the move aims at improving the productivity of the millers to return them to profitability.

A sugarcane plantation
A sugarcane plantation
Image: FILE

The Privatisation Commission  has opposed a National Land Commission proposal to sell land belonging to state-owned sugar factories as that is not its mandate.

Chairman Paul Otuoma said in Bungoma that the land on which the factories are built is community land and as such should be held in trust by the respective county governments.

Otuoma said privatisation would only involve the sale of 51 per cent shares held by the government. "We are not handing over these companies to investors or individuals. We are only going to reduce the 51 per cent government shares so people can buy them." 

The chairman dismissed remarks by leaders that the privatisation targeted land belonging to the millers.

He said the idea is intended to improve the productivity of the sugar millers to return them to profitability.

Otuoma urged leaders to give the public proper information instead of "spreading lies" leading to farmers rejecting the privatisation.

He urged leaders to "join hands and purchase shares that will be floated by the government" during the process, telling farmers to do the same.

The government has been trying to privatise sugar mills since their fortunes started dwindling and accumulating debts.

Last year, Agriculture Cabinet Secretary Mwangi Kiunjuri said that mills which did not turn around their fortunes within six months would be among the first to be sold.

Kiunjuri, was on a visit of Nzoia Sugar Company, said the government will not continue to pay debts for sugar millers who are crushing cane and not making profits.

Nzoia Sugar owed farmers Sh2.7 billion and the government released Sh1.9 billion, with Sh808 million yet to be disbursed.

Otuoma said the government is keen to ensure that the sugar sector survives and was looking for strategic investors to "breathe a new life in the industry".

"The government does not want this industry to go down, that is why we are looking for ways to ensure that the industry survives by partnering with strategic investors even if it means selling shares," he said.