Kenya unveils US$30.98M annual sugar sector investment plan to drive growth, sustainability
Government targets self-sufficiency and export readiness with sugar development levy funding for roads, research, and factory upgrades.
KENYA – Kenya’s Agriculture and Livestock Development Cabinet Secretary, Mutahi Kagwe, has announced a KES 4 billion (US$30.98M) annual investment plan aimed at revitalising the country’s sugar sector.
The initiative will be financed through the Sugar Development Levy (SDL) and is designed to support sustainable growth across all levels of the industry.
Speaking during a visit to West Kenya Sugar Company, which has secured a 30-year lease to operate Nzoia Sugar, Kagwe outlined the investment structure, noting that 40% of the SDL will be channelled into nationwide cane development programmes.
The remaining funds will be allocated to strategic interventions meant to stabilise and modernise the sector.
According to the breakdown, 15% or KES 600 million (US4.65$M) will go towards road rehabilitation in sugarcane-growing areas to improve access and reduce post-harvest losses.
An equal percentage will be invested in research and innovation to enhance productivity, including new crop varieties and mechanisation.
Factory rehabilitation will also receive 15% of the fund, while 5% will be used to strengthen farmer associations. The remaining 10% will finance administrative operations under the newly restructured Sugar Board.
Kagwe emphasised that the allocations reflect extensive consultations with farmers’ unions and miller representatives. He stated that the investments are intended to ensure long-term viability of the sector and shift Kenya from being a net importer to a sugar exporter by 2026.
Highlighting the role of private sector players, Kagwe praised West Kenya Sugar, a subsidiary of Rai Group, for its farmer-focused operations.
The company pays over KES 14 billion (US$1.8B) 1nnually to its network of more than 120,000 contracted farmers and invests KES 7 billion (US$903.89M) in cane development.
As of September 30, 2024, the Agriculture and Food Authority (AFA) reported that nearly 50% of all land under sugarcane cultivation in Kenya is managed by the Rai Sugar Group.
To curb cane poaching, Kagwe urged farmers to remain loyal to supportive millers and directed the Sugar Board to convene a forum to establish clear zonal boundaries among processors.
He also advised farmers to allow cane to mature fully before harvesting, to improve sugar quality and competitiveness ahead of planned export operations.
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