Sugar millers in Kenya sinking under billions of debt

The Cabinet on Monday approved a Sh117 billion write-off of debt owned by public sugar mill debts.

The debts are in bank loans, tax arrears and penalties, farmers’ and employees’ dues. The sugar companies owe banks Sh65 billion, Sh50 billion in taxes and nearly Sh2 billion in farmers’ dues.

The approval to write off the debts is part of the reforms sanctioned by the Cabinet for the turnaround of the sugar sector.

In a memorandum submitted to Parliament on August 22, 2023, Cabinet Secretary Njuguna Ndung’u told lawmakers the waiver is part of the Treasury’s action plan to revive Chemelil, Muhoroni, Miwani, Nzoia and Sony sugar companies.

“That the total of Sh65,778,448,646 owed to the government of Kenya and Kenya Sugar Board as of June 30, 2023, by the five sugar companies be written off,” Ndung’u stated in the memorandum.

Ndung’u wanted MPs to approve the write-off of tax penalties amounting to Sh50,144,801,608 as of June 30, 2023.

According to the Cabinet, the National Treasury is working on waiving tax penalties and interest within 30 days.

They also announced that plans for the payment of farmers’ arrears and employees’ salary arrears will also be unveiled within three months.

Sugar millers sinking under debt

Sugar millers in Kenya have been sinking under the hefty 117 billion debt that has crippled their operations. The other challenges facing the millers include; lack of sugarcane;  as running archaic equipment failure to take up better farming techniques tips