OPINION: Muhoroni Sugar Lease Deal – A Robbery in Broad Daylight That Must Be Halted

The recent leasing of Muhoroni Sugar Company to West Valley factory represents nothing short of daylight robbery of public assets, threatening the livelihoods of thousands of farmers in the Nyando sugar belt.

This scandalous arrangement must be cancelled immediately before irreparable damage is done to Kenya’s struggling sugar industry.

An Inexperienced Player Handed a Crown Jewel

How does a government entrust a 59-year-old sugar mill with significant production capacity to a company that has barely existed for two years?

West Valley factory, owned by Ben Soi, was only commissioned in October 2023 and has a crushing capacity of merely 1,250 tonnes per day – just over half of Muhoroni’s 2,200 tonnes.

More troubling still, West Valley operates on a tiny 21-hectare plot compared to Muhoroni’s 1,393 hectares of nucleus estate.

It defies logic and transparently violates the government’s own tender requirements, which specified “at least five years in managing and operating a sugar factory” and “an annual turnover of Sh5 billion in three years.” West Valley meets neither criterion.

What we’re witnessing is a classic case of crony capitalism at its worst.

The government is absorbing billions in liabilities – salary arrears, farmer payments, and tax obligations – while handing clean-slate companies to private operators.

In essence, the public bears the costs while connected businesspeople reap the rewards.

The leasing structure creates regional monopolies rather than promoting competition.

In each geographic zone, dominant players can now dictate prices to farmers on a “take it or leave it” basis.

Without competitive pressure, farmers will inevitably face manipulated weighbridges, rock-bottom producer prices, and perpetually delayed payments.

Look beyond the surface, and a more sinister scheme emerges.

These lease arrangements appear designed to transfer control of valuable nucleus estates to well-connected oligarchs.

Private millers who previously lacked nucleus estates now suddenly control vast tracts with mature cane ready for harvesting.

Nothing in the contracts prevents these operators from transporting this “free” mature cane to their existing mills while delaying rehabilitation of the publicly-owned factories they’ve acquired.

Worse yet, the contracts don’t prohibit sub-leasing, opening the door for valuable agricultural land to eventually end up in the hands of political elites.

Government spokespersons trumpet billions in new investment, but the contracts tell a different story. There are no legally binding commitments with clear timelines for rehabilitation and expansion – only vague mentions of “proposed initial investment.” Without enforceable obligations, these promises are worthless.

Perhaps most galling is that these mills have been handed to the very individuals who contributed to their downfall – competitors who systematically poached cane from public mill estates and championed the importation of cheap, substandard sugar that undermined local production.

A Process Designed to Fail

A transaction of this magnitude demanded experienced advisers skilled in structuring leasing deals to protect public interests.

Instead, it was left to politicians and bureaucrats at Kilimo House, resulting in agreements that favor private interests over farmers and taxpayers.

The consequences will be devastating. Hundreds of thousands of farmers in the Nyando sugar belt now find their future in the hands of an untested entity with no proven track record in sugar production.

The Only Solution: Cancel the Leases

There is only one responsible course of action: cancel these deeply flawed leases immediately.

The sugar industry needs genuine reform that prioritizes farmer welfare, promotes fair competition, and preserves valuable public assets.

Kenya’s sugar farmers deserve better than this blatant transfer of wealth to connected individuals. The time to act is now, before the damage becomes irreversible and our sugar industry collapses entirely under the weight of this ill-conceived privatization scheme.