NAIROBI: Kenya’s president handed 1 billion shillings ($10 million) to cash-strapped Mumias Sugar as part of a state bailout and said managers who ran down the firm would be investigated for corruption.
Kenya’s struggling sugar industry has been protected against cheaper imports by trade barriers but has faced years of decline caused by mismanagement, outdated farming methods and corruption.
President Uhuru Kenyatta ordered Mumias, Kenya’s biggest miller, to spend the cash by paying off debts to farmers who supply it with cane and asked Finance Minister Henry Rotich to ensure cheaper imports did not sneak across borders.
“We want to ensure sugar farming in western Kenya will not decline again,” Kenyatta said on Wednesday at the plant.
“We want to ensure that Mumias here and others have sound management. We want to ensure the stealing that has been seen there is finished and eradicated,” he said.
Kenya said in May it wanted to privatise some of the state-owned firms within the next year.
It is not clear how many people are directly employed in the sugar sector but experts estimate it supports about four million people, including farmers, transporters and traders.
Kenya was granted a one-year extension of sugar import limits from the regional trade bloc Common Market for Eastern and Southern Africa (COMESA) to revamp the ailing industry, officials said in March.
Some smuggled sugar trade has been linked to the Somali al Shabaab Islamist militants, who experts say use the funds to launch their attacks in Somalia and Kenya.
