Nirobi-Kenya – The Cabinet has agreed to a resolution by the National Assembly to write off loans and tax arrears owed by public sugar mills amounting to Ksh117 billion.
The plan was approved during a Cabinet meeting held on Monday, October 9, 2023, at the Kisumu State Lodge led by President William Ruto.
“To address the challenges that have bedevilled sugarcane farmers for decades, Cabinet welcomed the resolution of the National Assembly approving the writing-off of loans owed/tax arrears by public sugar mills amounting to Ksh117 billion,” the Cabinet said in a despatch after the meeting.
The cabinet has also adopted a framework to enable the millers to pay farmer arrears and salary arrears through a 90-day payment plan.
“To reinvigorate public sugar mills, the backbone of the Nyanza/Western economy, Cabinet also approved a framework to support the public millers to pay farmer arrears and salary arrears through a 90-day payment plan,” the despatch added.
Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company (in receivership), Muhoroni Sugar Company (in receivership), and South Nyanza Sugar Company (SONY) owe substantial amounts of money to farmers, suppliers for goods and services rendered, employees’ salary arrears, unserviced loans and interest to financiers, taxes and tax penalties and unpaid statutory deductions such as NHIF and PAYE that have left these companies with huge debt burden without corresponding assets.
The National Treasury had sought Parliament’s approval to write off the debt owed by the millers, some of which have stopped operations due to cash crunch.
