ABN – Kenya’s Privatisation Commission has announced plans to sell five of the country’s sugar companies to private investors.
It is hoped that the sale of the state-owned sugar companies will help to wipe off the country’s debt of US$603 million.
Around 590,000 tons of sugar were produced in Kenya last year and the five sugar companies accounted for 10% of this.
Kenya’s sugar industry has started struggling due to record high production costs of $900 per ton, which is way about the $300 recorded in other countries.
Sugar accounts for about a fifth of Kenya’s economy and the industry employs around 250,000 people.
Nzoia Sugar, South Nyanza Sugar, Chemelil Sugar, Muhoroni Sugar and Miwani Sugar will all be sold if the plans go ahead.
The Privatisation Commission chairman Henry Obwocha said: “Government reached the decision of bailing them out completely so that the firms would look attractive to investors.
“The government planned to sell 51 percent stakes in the companies to a ‘strategic partner,’ and a further 24 percent to both growers and employees.”