Until the nineties, Mumias Sugar Company was the major and most prolific company in Kenya.
It was the best-run and most profitable sugar company for farmers. In 2003, shortly after its 2001 privatization, the government terminated the Booker Tate agreement. This move was at the heart of Mumias Sugar’s quandary as the government now took full control of the supervision and began appointing senior executives.
Mumias’ current problems stem from a failure to repay a Sh540 million loan owed by KCB Bank. The sugar company is owed more than Sh12.5 billion by the bank. KCB put Mumias Sugar under bureaucracy in September 2019, which led to all employees being suspended while creating a loss of Sh15 billion in 2018, from Sh6.7 billion in 2017.
KCB eventually opted to hire Mumias for investors to revive it. Problems arose as soon as news emerged that Devki Steel Mills was the winner of the tender. Politicians from the area began questioning the rental process.
The winner’s credentials were questioned and the policy led to the withdrawal of the sponsor. Whenever politicians engage in investment activities the results are negative. There have been no results after the state-owned sugar factories in Western Kenya were politically intervened.
For three decades, politicians from the West and Nyanza have resisted all attempts by the government to privatize sugar factories in order to transform them for profit. Today, not a single state-owned sugar factory continues its operations effectively.
Why are the real stakeholders of sugar companies silent? Why have politicians resigned? Why are Mumias Sugar distributors, who are owed billions, not holding rallies and speaking with one voice in protest against this political tyranny? and cane, hiring people, and investing in the local and national economy as a whole.