The issue of using billions of shillings to bail out moribund sectors of our economy without long-term remedies is hurting Kenyas economy... Weve had billions in the 1980s, 1990s and early 2000 being thrown at Coffee sector and Cotton sector. We have witnessed billions also being spent to resuscitate the dead PanPaper Mills. None of these has ever been revived. Now the same is happening to sugar sector with no positive results... For how long must Kenyan taxpayer be saddled by the burden of inefficiency and wastage? It is high time that the government becomes market-oriented and learn to pull out of sectors that are no longer competitive and seek those ones that are... Just as the coffee, cotton and paper sector collapsed, it is highly likely that the sugar sector in Kenya is on its death-bead. Inefficiency aside, our economy is part of the global economy and thus we do not have comparative advantage in so far as sugar production is concerned. For us to reap the benefits of COMESA, subsidies and other favorable terms to the sugar sector will have to go. 2015 is the ultimate deadline. Will sugar sector in Kenya survive the cut-throat competition from Sudan, Malawi and other sugar-producing countries whose price per kilo is less than 50 shillings? This is a tall order. 60% of the sugar that we use is imported. Yet, we pay 100% duty on this imported sugar in the name of protecting local sugar industry. Thus, if the price of a kilo is 100/= in the market, its actual price ought to have been 50/= without the heavy duty we are paying for inefficiency. Hence, for every two teaspoonfuls of sugar you put in your cup of tea, one teaspoon represents wastage and inefficiency of the local sugar industry. Farmers in sugar-belt regions should have started being weaned from sugar as early as year 2000. The government should explore alternative ways for them to utilize their land to have viable commercial farming. This, in the end, will make our economy leaner and efficient.
Posted on: Tue, 09 Sep 2014 07:00:14 +0000
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