MUMIAS SUGAR

State must sell off its Mumias shares

It recommends that Kakamega county take over Mumias which has been closed since March 2018.

In Summary

• Mumias nucleus estate has 4,300 hectares worth Sh250,000 per acre

• Task force wants Kakamega county to take it over and  to invest Sh5 billion

Mumias Sugar Company Limited./file
Mumias Sugar Company Limited./file

Mumias Sugar Company needs Sh5 billion to get back on its feet, according to a task force on the sugar sector (see P28).

It recommends that Kakamega county take over Mumias which has been closed since March 2018 because of a lack of cane and Sh20 billion of debt. Mumias is a listed company which is 20 percent owned by the state.

It is a bad idea for the county to take over Mumias or for central government to pump any more money into it. It is time to privatise Mumias completely. 

 

The nucleus estate covers 4,300 hectares. That land is worth Sh2.7 billion at the most. The factory may be worth another Sh1 billion. Mumias is completely and utterly bankrupt.

Yet private companies in Kenya and Uganda, including the Rai family, profitably manage sugar estates. Public ownership, even when it is only partial, is the kiss of death for most companies.

The government's 20 percent shareholding in Mumias is worth Sh90 million on the stock market today. The state should sell those shares and then let the private sector sort out the Mumias problem. 

Quote of the day: "The priest was my teacher, because I reacted against the things he told me."

Léopold Sédar Senghor 
The first President of Senegal was elected on September 5, 1960