The recent establishment of the Kenya Sugar Board provides an effective policy and regulatory platform for reviving an economic sector capable of significant contribution to Kenya’s gross domestic product. Such focus was not possible under the Agriculture and Food Authority.
Like most other economic sectors, most of the sugar industry infrastructure had been set up in the 1960s and 70s but weakened in the 1990s due to poor sector resource management and inappropriate authorisation of sugar imports that competed with local production.
The new board will need to re-establish confidence among farmers, investors and service providers by reassuring them that sugar sector revival strategies are sustainable.
Many sugar factories have significant debts, and old equipment in need of replacement and modernisation, while technical and managerial skills are significantly depleted. Visionary sugar factory boards should be appointed to drive change in struggling sugar companies supported by technically and financially strong strategic investors.
Motivated farmers are key to the success of any farming enterprise. Sugar sector policies should ensure the availability of affordable inputs and credit, with assured prompt payments for produce deliveries.
The Sugar Board should have a say in sugar import decisions to avoid market instability and threats to farmers’ incomes.
Further, the board will need to stretch its imagination with innovations beyond the usual. It should go beyond sugar cane and explore the feasibility of other crops like beet sugar, as long as these do not displace critical food security crops.
Sugar enterprises should also be enabled to go for value addition. Production of industrial sugar should be supported to cut out imports. Industrial and potable alcohol production should be stepped up and surpluses exported.
At the peak of sugar industry successes in the early 1980s, the Muhoroni ACFC factory supplied alcohol to oil companies for a 10 percent blend with gasoline (called gasohol), a regulatory requirement justified to reduce oil import forex. It was a successful partnership between the oil industry, Kenya Pipeline Company and ACFC.
The exercise stopped in the late 1980s when bulk alcohol exports fetched more forex than savings on oil imports. A later attempt by a new Kisumu Molasses factory never took off due to the unavailability of molasses, the main raw material.
My advice to the Sugar Board is that, as early as possible, it selects areas where quick early successes can be achieved, to serve as best practice case studies for others in the sector—for indeed demonstrated success begets more success.
Avoid populism and deliver real results through farmers and investors. And within time, sugar can steadily become the sweet pride of western Kenya, South Rift and Coast delivering stable jobs and incomes for many.
