In a landmark move to revive Kenya’s ailing sugar industry, the government has finalised the leasing of four major sugar factories to private millers, alongside a firm commitment to pay KSh7.6 billion in pending salary and cane delivery arrears owed to farmers and workers.
Speaking during a press briefing, Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe confirmed that the 30-year leases have been awarded following extensive consultations and a competitive procurement process.
“The negotiated terms represent the best possible outcome to ensure the revival of the sugar sector. These reforms are not just about improving productivity—they are about restoring dignity to farmers and workers who have waited too long for justice,” said Kagwe.
Sugar factories and lessees
The four sugar companies now under private lease are:
- Nzoia Sugar Company – leased to West Kenya Sugar Company
- Chemilil Sugar Company – leased to Kibos Sugar & Allied Industries Ltd
- Sony Sugar Company – leased to Busia Sugar Industry Ltd
- Muhoroni Sugar Company – leased to West Valley Sugar Company Ltd
Relief for farmers
Farmers will be paid KSh500 million by July 2025 for cane delivered after last year’s KSh1.7 billion payout.
Workers will receive KSh1 billion immediately upon lease takeover, with KSh600 million going towards arrears and KSh400 million for May salaries.
An additional KSh1.5 billion will be disbursed in July 2025, and the government will continue settling worker arrears quarterly—at a rate of KSh1.17 billion—until June 2026.
The Kenya Union of Sugar Plantation and Allied Workers (KUSPAW) signed a Memorandum of Understanding with the Ministry, ensuring workers are protected during the 12-month transition period as the lessees assess staffing needs.
“We have fought for a solution that puts our members first, and we believe this agreement marks the beginning of a new era,” said a KUSPAW representative.
The leasing decision follows nearly a decade of debate, with initial discussions dating back to a 2015 parliamentary directive. In 2018, a government task force identified strategic partnerships as key to revitalizing the sector. By September 2023, following nationwide public participation and National Assembly approval, leasing was officially adopted—overruling earlier privatization plans.
Justice Chacha Mwita later upheld the process in court, affirming that due public engagement had occurred under the Public Private Partnership Act.
CS Kagwe reassured stakeholders that no public land would be sold under the leases. All factory assets remain state-owned, with annual lease proceeds channeled through the Kenya Sugar Board for reinvestment into local communities and cane development.
“This is not a sale. It is a strategic lifeline for our sugar belt. We urge farmers, workers and political leaders to support the journey ahead,” Kagwe emphasized.
With billions in pending dues finally being addressed and fresh investment on the horizon, the once-crumbling sugar sector may now be on a path to sweet recovery.
