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Gloom as Kenya fails to meet Comesa rule

The Standard, Kenya

Gloom as Kenya fails to meet Comesa rule

22 April 2014

By Winsley Masese

Nairobi: Kenyan sugarcane farmers and consumers face a bleak future, as Government departments tasked with implementing reforms in the sector drag their feet.

With cheap imports flooding the market, the farmers have for example not been paid for their deliveries, as stocks of sugar pile up in the millers’ stores due to lack of market.

There has been no progress on some of the significant proposals that could enable the local industry survive in a liberalised market.

For example, the Ministry of Energy and Petroleum was supposed to adopt an energy policy to promote co-generation and other forms of bio-fuel energy production.

With the deadline set as April 30, 2014, which is on Wednesday, a week from today, all indications are that no progress has been made in this front.

A source at the Kenya Sugar Board, the industry regulator, admitted that the deadline might not be met. “It will be unlikely to meet the deadline and we will redesign the deadline and communicate the same to the organ tasked with the responsibility,” the source noted.

A significant policy to aid the sector meets some of the conditions and touches on privatisation of the five sugar mills.

The roadmap sets March 15, 2014 as the deadline by the Privatisation Commission to obtain the necessary approvals from Parliamentary for conclusion of the privatisation process. Parliament has been on recess and opened yesterday.

This was to be followed by inviting offers for the sale of the five public entities, with the option of public private partnerships, auctions and private treaty. It is also suggested that a mechanism be put in place to facilitate fund raising to finance farmer shareholding in privatised mills. This will not affect the sector from meeting the Comesa safeguards but points to a number roadblocks that will see Kenyans continue paying dearly for sugar.