Agriculture Cabinet Secretary Mutahi Kagwe has assured Kenyans that the government has not sold any state-owned sugar factories, clarifying that the entities have only been leased out through a transparent, Parliament-approved process aimed at reviving the struggling sugar sector.
Appearing before the National Assembly’s Agriculture Committee, Kagwe dismissed claims of opacity, noting that all stakeholders were involved from the start and that Parliament gave a green light to the leasing model after extensive debate.
“There is no selling of sugar factories that has been done. It’s leasing that has been done, and Parliament approved the whole process. I dismiss assertions that the process was opaque, considering all stakeholders were involved,” said Kagwe.
He emphasized that the reforms were borne out of lengthy discussions in Parliament, which formed a special sugar caucus that ultimately endorsed leasing as the best solution to salvage the industry.
“The reforms in the sugar sector are something that have been going on in this House for a long time. Parliament itself debated the issue of whether to sell or lease the factories — and finally decided on leasing,” he added.
Kagwe further reassured the public of accountability, noting the ministry is open to scrutiny and willing to submit any documents requested by legislators or members of the public.
“The ministry has no dog in the race, and there is no document which is hidden. All of us want the same thing: we want to save the farmers, ensure workers continue working, and settle their debts.”
Why Leasing Was Necessary
The CS revealed that the government opted to lease the factories due to their poor financial state, with debts exceeding Ksh.5 billion. He said the move was critical to prevent total collapse.
“Farmers are owed about Ksh.5.6 billion. The irony is that we’ve got one privately-run factory that pays farmers every week and pays taxes. They’re not perfect, but they’re functional,” said Kagwe.
He noted that all farmers’ debts had already been taken over by the government to shield them from financial distress.
“Unless you lease those factories, the debts owed by farmers could easily turn into bad debts. What we’ve done is convert bad debts into accounts receivable.”
Kagwe affirmed that the leasing adhered to normal procurement procedures. He explained that the government had previously injected significant funds into the factories with no return, and the new approach offers a better model for sustainability.
National Assembly Agriculture Committee Chair, Dr. John Mutunga, supported Kagwe’s remarks, saying the leasing process had full parliamentary oversight and approval.
“The sugar leasing process was taken through Parliament; that’s why other members are not worried. The process was not restricted,” said Mutunga.
