In a sweeping shake-up of Kenya’s struggling sugar industry, the government has confirmed it will lease four state-owned sugar factories and settle Sh6 billion in unpaid dues to farmers and workers by July.
The move affects Nzoia, Chemelil, Sony, and Muhoroni factories, once considered pillars of rural economies in the sugar belt but now plagued by years of debt and mismanagement.
Agriculture Cabinet Secretary Mutahi Kagwe, speaking before the National Assembly’s Agriculture and Livestock Committee, said the leases mark a turning point.
“We’ve reached a consensus after long discussions,” Mr Kagwe told lawmakers. “This is about protecting jobs and reviving an industry that has been left on life support for far too long.”
The deal, approved by the Cabinet, will see private millers take over operations following a one-year transition period. During that time, the new operators will assess staffing needs, though it remains unclear how many current employees will be retained.
In the meantime, the government will remain liable for all salary arrears, pension shortfalls, and statutory deductions accrued before the official handover.
Kagwe said the Sh6 billion earmarked for compensation would cover outstanding payments owed to both sugarcane farmers and factory workers. Last year, the state released Sh1.7 billion to begin settling those debts.
“This is a promise we’re committed to fulfilling,” Kagwe said, adding that the Ministry had signed agreements with the Kenya Union of Sugar Plantation and Allied Workers (KUSPAW) to ensure that labour rights are upheld.
The factories have long been a source of frustration for local communities, many of whom have gone months or even years without payment for their sugarcane deliveries. Political meddling, underinvestment, and poor governance have all contributed to the sector’s collapse.
Some farmers, while cautiously optimistic, say they’ve heard similar promises before.
“We’ve suffered long enough,” said George Otieno, a sugarcane grower in Muhoroni. “We want to see money in our accounts not just announcements in Nairobi.”
Critics of the deal argue the government has not been transparent enough. A few opposition lawmakers have questioned whether the leases are, in effect, backdoor privatisations that could leave communities worse off.
But Kagwe defended the plan as a necessary step.
“Taxpayers have footed the bill for years,” he said. “It’s time the sector stood on its own feet.”
Still, much remains to be seen. Details about the companies taking over the factories have not been made public, and the Ministry has not released full terms of the lease agreements.
For now, sugarcane farmers and factory workers alike are watching and waiting hoping this will be the moment that long-delayed reform finally arrives.
