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Economic Rejuvenation: Kenya’s Bold Move to Erase $810 Million Debt of State-Owned Sugar Millers.

In a resounding stride toward economic revival, Kenyan President William Ruto has orchestrated a monumental reset for the nation’s beleaguered state-owned sugar millers. The president’s visionary decision entails a sweeping write-off of KES 117.64 billion (equivalent to US$810.7 million) in debt that these companies owed to the government, injecting newfound hope into the sugar industry.

A Transformative Gesture: Clearing the Slate for Flourishing Millers

With a forward-looking resolve, President Ruto has breathed new life into five prominent state-owned sugar millers, heralding a fresh beginning. Mumias Sugar Company, Nzoia Sugar Factory, South Nyanza Sugar Company, Muhoroni Sugar Company, and Chemelil Sugar Factory are the beneficiaries of this bold initiative. The heartbeat of the nation’s sugar production, these millers had faced daunting financial challenges, stifling their potential.

An Ambitious Plan for Revival

The wheels of transformation were set in motion as the National Treasury forwarded a proposal to the Parliament, seeking endorsement for the write-off of the KES 117.64 billion debt owed by these millers. This strategic move serves as a beacon of hope for the revival and commercialization of these entities that hold profound significance in Kenya’s economic landscape.

A significant development had already transpired on this journey to rejuvenation. The cabinet, in an illuminating demonstration of support, had given the nod to waive KES 83 billion (equivalent to US$573.6 million) of debt owed to the Agriculture and Food Authority (AFA) by these state-owned sugar millers. This debt was a result of the accumulation of unremitted Sugar Development Levy payments, which had been levied at 4 percent of the ex-factory value of locally manufactured sugar before its discontinuation in 2016. The millers’ financial tribulations had led to the unfortunate defaulting of these payments.

A Pledge for Progress: Reforms and Revitalization

President Ruto, with a conviction that resonates, pledged a holistic transformation of the sugar sector. He assured the nation that he would personally take on the battle against sugar cartels, a promise that has been met with resounding applause. Additionally, the president affirmed that no public sugar factory would be privatized, underscoring a commitment to the sector’s vitality. The millers, rather than being privatized, will undergo a leasing arrangement aimed at enhancing their performance.

Innovative Upgrades and Forward Momentum

The drive for performance improvement has already borne fruit. Nzoia Sugar Company, a pivotal player in this transformative narrative, has received two state-of-the-art crushing machines. These modern additions promise to infuse stability into the sugar factory’s operations and elevate its crushing capacity, positioning it for a reinvigorated role in the sector.

Resounding Acclaim and a Vision for the Future

Kakamega Governor Fernandes Barasa hailed this monumental decision as a beacon of hope for the sugar sector. As the nation prepares for an impending sugar conference, Governor Barasa expressed his optimism that a majority of the sector’s challenges would be addressed, illuminating a path toward a brighter future.

With operations temporarily halted to facilitate cane regeneration and address a national cane shortage, the Western sugar belt’s millers stand poised on the cusp of transformation. President Ruto’s audacious move to clear the debt slate and embrace reform has ignited a fervent hope for the revival of the sugar industry, echoing the sentiment that economic rejuvenation can indeed blossom from the seeds of transformation.

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