Kenya pledges to follow through on sugar factory privatisations

 

Kenya will privatise sugar factories and impose an additional tax as it tries to revive the industry, President Uhuru Kenyatta’s office said on Monday.

Industry experts count the high cost of production and poorly funded government factories with aging machinery among the problems facing the East African nation’s sugar industry.

The government will act on all of the recommendations made by a task force formed to focus on reviving the sector, Kenyatta’s office said in a statement.

The task force recommended reintroducing a levy.

“The sugar levy will be charged on consumers so as to raise the revenue needed to assist farmers to develop their sugarcane crop,” Kenyatta’s office said, without providing details on the levy.
The task force also recommended changes to sugar import rules, it said, without elaborating.

The government’s latest attempt to privatise was in 2015, when it announced plans to sell shares in five companies it owns. Two of these are in receivership.

The effort failed, after a court case challenged the manner in which the government’s Privatization Commission planned to do it, prompting the commission to restart the process and involve more parties such as regional county governments.

The 2017 formation of the task force that handed its report to Kenyatta on Monday was partly driven by 2015’s failed privatisation.

Kenya produced 485,498 tonnes of sugar in 2018, up from 377,126 tonnes a year earlier, data from the Kenya National Bureau of Statistics show.