SUGAR INDUSTRY HAS BECOME THE MILKING COW OF UNSCRUPULOUS CEOs.

Commentary by Leo Odera Omolo
The Finance Minister Amos Kimunya's firm and positive stand on the on-going confusion in the sugar sub-sector and the industry regulator the Kenya Sugar Board (KSB) which has been trying to trigger the artificial shortage mainly for the purpose of enriching unscrupulous cartel of sugar baron is most welcome.

Kenyans are glad that the government on its part has come to realize that the sugar industry has for a long time become the "milking cow" of the unscrupulous CEOs of the various factories who are known to be working in collaboration with pseudo and unscrupulous cartel of Asian and Arabic tycoons in looting the sugar sub-sector down to is knees.

Excessive importation or dumping of sugar sourced in foreign countries affects cash flow of millions and cane farmers. There seems to be no improvement as most factories are presently forced to keep high stock of sugar while sales are slugging even after lowering of prices.

In some factories, delays of farmers' payments are more than eight months after delivery of sugarcane. The farmers find it difficult to maintain their cane crops, among other things and the yield drops.

The current industry regulator, the Kenya Sugar Board (KSB) is a toothless organ which is only serving as a window dress. But the actual culprits happen to be the CEOs of sugar factories working in cahoots with unpatriotic cartels of traders who are milking the sugar industry down to its knees. They are also working in cahoots with top ministry officials, the minister, Minister Kipruto Arap Kirwa included, who appears to have succumbed to pressure from the excessively wealthy CEOs of the sugar factories.

This area of importation of sugar either sourced from COMESA or elsewhere - - which now requires the KSB to apply iron hands in controlling excessive importation and profiteering in this sector - - is the major cause of problems in the sugar industry.

A few importers, probably numbering less than twenty, pocket exorbitant sums of money while sweating farmers wallow in abject poverty. In this respect, Kenyans need elements of patriotism and not lip services and cosmetic action like those taken by Kirwa and his CEOs.

Kenyans are pleased to hear that the government's top spy agency and the anti graft watchdog have been called to investigate an alleged conspiracy to raise hundreds of millions of shillings from the sugar imports to bankroll elections.

These agencies should initiate thorough investigations on the sources of excessive wealth owned by some of the Chief Executives of sugar factories particularly the CEO of Mumias Sugar Company Dr. Evans Kidero, who it is being alleged has bought nearly half of the houses in the posh Milimani Estate in Kisumu City. Kidero has also acquired the palatial home built by the late Tom Mboya, the slain former Minister for Economy Planning and Development. Mboya's house is strategically standing next to the Kisumu State Lodge in an area overlooking the eastern shores of Lake Victoria. Although the house was designed and built 30 years ago by Mboya himself while he was still alive, Dr. Kidero is said to have spent more than Kshs. 30 million buying this house and has so far spent colossal amount of money in excess of Khss. 10 million renovating the house.

The Mumias CEO, who on occasion has been heard bragging in an executive members club in Kisumu City that he has pocketed the Agricultural Minister, Kirwa and the KSB Chairman Soulo Busolo, is believed to have bought more than 10 other houses in Kisumu's Milimani posh estate, most of them on cash money preferred bills.

The Mumias CEO, it is being alleged is using a Muhoroni politician as his errand boy in dirty tricks, which also involved the recent flooding of Sony Sugar Company with fertilizers whose value was in excess of Kshs. 200 million. The fertilizer was in excess of the company's requirements for more than three years and was sourced from the three suppliers but promptly paid for in an irregular and suspicious manner.

The same team of government investigators should also initiate investigation about more than Ksh. 500 million which mysteriously disappeared from Chemelil Sugar Company a couple of years ago, when the Nyando based sugar firm was granted permission to import duty free sugar into the country, on the understanding the profit accrued would be utilized in paying for the factory's actual maintenance. The company could only account for Ksh. 48 million, the rest is now history.

But thereafter, the Chemelil Managing Director who was only brought in from Maseno University and was owning only an old Peugeot 504 went into property buying spree. He's himself bought several houses in Kisumu Milimani estate, one just recently.

The Chemelil Sugar Company MD, Prof. Julius Omondi Nyabundi has also built three massionate houses in his Seme rural home for three of his five wives. The three houses, according to experts are valued at over Kshs. 30 million. The Chemelil MD is also reported to have bought 300 acres of sugarcane farm in Chemelil or Nyando settlement area. Where did the riches come from?

These are some of the pertinent questions the investigating officers should ask for and get the answers if such inquiry could be anything to go by.

The much touted COMESA reprieve for Kenya was given 4 years ago with specific target of improving efficiency in sugar production so as to be able to compete in trade.

It is a fact that after 4 years, nothing tangible has been done on production. The average yields of cane of sugar bagged remained high. There is nobody policing it for improvement in line with COMESA conditions. Why?

Appointment of CEOs in the sugar sub-sector of the economy has been haphazard with non qualified people being put at the helm on many occasions. Such appointments are always done at the whim of godfathers of the individuals.

Going by the trend in controlling sugar industry, it is a further waste of time asking COMESA to give and extend grace period when there is total lack of vision to improve the efficiencies.

Many good articles have been written and conferences held proposing best ways forward but these fall on dead ears. Instead, the looting of resources in the sugar sub-sector has intensified.

The basic item like setting price formula for sugarcane has since not been agreed upon and implemented!!

The heavy profiteering in cane transport, which leaves the farmers poor, has not been addressed adequately!! Why? Excessive corruption is killing the industry.

Finally, the current problem in the sugar sub-sector of the economy could only be improved with the sector overhaul of top management, in all the sugar companies currently operating under public investment. Alternatively, the government should sell its shares to provide investors who will be able to run the businesses as for-profit entities.

Ends
leooderaomolo@yahoo.com

The writer is LUOCOME REPORTER based in Kisumu. We urge all LUOCOME members with pressing issues pertaining to media and press releases to kindly contact him from any where in world. He will assist you to get true picture of your Village Developement.
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