The cabinet has approved a Sh117 billion bailout for six state-owned sugar factories in the Western and Nyanza regions.
During a sitting held at the Kisumu State Lodge, the Cabinet directed the National Treasury to work on the necessary paperwork to facilitate the process.
President Dr. William Samoei Ruto, who chaired the meeting, said the executive will submit a supplementary budget to the National Assembly for approval for the funds to be made available as the government moves to revive the sugar industry.
“The cabinet this morning approved Sh. 117 billion to clear the debts of the six state-owned sugar millers. This will ensure that all these debts are put behind as we move to lease the sugar factories,” he said.
Speaking at the Kenya Shipyards Limited (KSL) in Kisumu, where he commissioned the newly built MV Uhuru II vessel, the president said the bailout targets South Nyanza Sugar (SONY), Nzoia Sugar, Muhoroni, Chemelil, Miwani, and Mumias Sugar companies, which are earmarked for leasing.
The government, he said, was determined to revive the sector, adding that the money will be released to the factories by Friday this week as preparations for leasing the firms continue.
Leasing, he added, was set to inject capital into the struggling firms and ensure they operate optimally to save farmers from agony.
The programme, he said, was set to benefit not only farmers but also members of the community, adding that the land on which the factories sit will continue to be in the hands of the community and government.
“Initially, the nucleus and all the other facilities did not directly benefit the community. Members of the community will now use county governments or any other entity that shall be agreed upon to benefit from the nucleus owned by the factories,” he said.
Apart from sugarcane, he said the government, through the Bottom-Up Economic Transformation Agenda (BETA), was on course to revive agriculture in the Nyanza region.
“It is not only sugarcane that we are focusing on. This region has potential for many other crops, including cotton, maize, vegetables, and beans,” he said.
Among the key interventions, he said, is the expansion of the Lower Nzoia Irrigation Project at a cost of Sh5.9 billion.
The investment, he said, will see the scheme expanded by an additional 20, 000 acres.
A similar venture, he added, has been planned in Migori County, with the Lower Kuja Irrigation Project set to be expanded by 14, 000 acres.
The two projects, he said, target to scale up rice production in the country to bridge the current shortage.
The head of state, who concluded his four-day working tour of the Nyanza region, added that the government will fastrack the construction of the Gogo Dam in Migori County to inject 8.6 megawatts into the national grid.
This, he said, will stabilise the power supply in the region and boost the manufacturing sector.
By Chris Mahandara
