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HomeEconomyKenyan millers staring at Ksh90 billion debt, report shows

Kenyan millers staring at Ksh90 billion debt, report shows

By Daisy Okanga | Kenyan millers are currently staring at a debt to a tune of Ksh90 billion, according to the recent report released by the national sugar task force.

The report was released on Monday by the sugar task force chair, Kakamega Governor Wycliffe Oparanya who presented it before President Uhuru Kenyatta.

The debt is due to the outstanding loans, taxes, fines and penalties which millers failed to honour.

The dismissal performance of the millers indicated their long-term loans from the government, which were not protected and were barley serviced.

“The companies have a long term incurred losses resulting in negative returns to the investment sector. Thus, due to accumulated losses, the company’s net worth had been systematically eroded to the extent that by June 2018, only Sony sugar company had a positive net worth of sh. 0.5 billion.” Says the report.

Miwani Sugar has an outstanding debt amounting to sh. 27 billion while Muhoroni sugar company owes Ksh.25.1 billion, Sony Sugar Ksh6.2 billion while Chemilil Sugar amounts to Ksh6.1 billion.

Mumias Sugar Company, currently under administration, has an outstanding debt amounting to Ksh4.8 billion, excluding the taxes penalties and fines.

The sugar sub-sector in Kenya has been undergoing roughest patch, with most of them pointing a finger towards the state for neglect.

Other reasons, among others, have been mismanagement of factories and consistent macroeconomic challenges, some emanating from government policies, even though most local production of sugar saves Kenya about Ksh.45 billion in foreign exchange.

President Uhuru Kenyatta received the sugar task force report at State House on Monday. In the report, the sugar levy was among the key recommendations.

Other key recommendations included privatization of public sugar mills to enhance their efficiency and the enactment of the Sugar Act.

The head of state, however, said the Government will implement all recommendations of the Taskforce as part of ongoing efforts to revive the sector.

Until the recommendations are implemented, the sugar sector in the country will continue to swim in its woes, even as sugar cane farmers now resort to other form of farming.

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