"THE FALL OF GIANT" NZOIA SUGAR COMPANY

Title: Nzoia Sugar’s Bitter Decline: A Tale of Collapse and Struggle for Revival

By: Clinton muimi 

Date: 21/6/2025

Nestled in the heart of Bungoma County, Nzoia Sugar Company was once a beacon of economic empowerment in Western Kenya. Founded in 1978, the mill supported thousands of farmers and workers across Bungoma, Kakamega, and Lugari. But today, its story is one of collapse, frustration, and an uncertain journey toward redemption.

⚠️ The Fall of a Giant

The downfall of Nzoia Sugar was not sudden—it was a slow rot, driven by poor management, corruption, and chronic political interference.

According to a 2023 report by The Standard Newspaper (Dec 4, 2023), Nzoia had accumulated over KSh 269 million in unpaid arrears to farmers and workers. Frequent managerial changes undermined stability, while strategic plans were abandoned mid-course. Allegations of misappropriation of funds and nepotism in hiring became common ([The Standard, p. 16]).

Adding to the strain, the mill’s machinery—largely unchanged since the 1980s—suffered regular breakdowns. A 2022 article in Business Daily (Oct 25, 2022, p. 11) noted that “Nzoia’s outdated processing equipment reduces crushing capacity by nearly 35%.”

The cane shortage crisis deepened the woes. Farmers, unpaid for months, began shifting to rival millers like West Kenya Sugar and Butali Sugar Mills, who offered prompt cash on delivery ([People Daily, Jan 12, 2024, p. 8]).

By October 2023, operations at Nzoia came to a standstill. The factory was shut for nearly four months—sparking public outcry across Western Kenya.

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🩺 Desperate Measures to Stay Alive

The government stepped in with piecemeal bailout packages, mostly to appease restive farmers and restart operations. In December 2023, a KSh 450 million rescue plan was announced through the Ministry of Agriculture to restock cane and restart milling ([Citizen Digital, Dec 5, 2023]).

At the same time, cane development programs were relaunched in Bungoma, including distribution of subsidized seedlings and fertilizers. However, implementation lagged due to bureaucratic delays and lack of coordination, as revealed by a 2024 Auditor General’s report on state-owned sugar firms (p. 43).

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🔁 A New Lease: Transition to Private Hands

In a landmark shift, the government opted to lease Nzoia Sugar Company for 30 years to West Kenya Sugar Company under a Public-Private Partnership (PPP) model. The deal, signed in April 2025, committed West Kenya to invest KSh 5.6 billion for modernization, arrear settlement, and cane development ([Daily Nation, May 3, 2025, Business Section]).

Farmers’ groups, such as the Bungoma Cane Farmers Alliance, welcomed the decision, citing expectations of prompt payment and stability. “We believe this lease will revive our fortunes,” said Chairperson Rose Waswa in an interview with Prime Africa News (May 5, 2025).

However, the deal sparked sharp political backlash. Several Western Kenya MPs condemned the lease as a "corporate takeover of public assets," accusing the government of sidelining stakeholders ([The Star, May 6, 2025, p. 9]). Critics also warned that allowing West Kenya—which already controls a significant share of the regional market—to absorb Nzoia could create a virtual sugar monopoly.

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🌱 Future on the Edge

As operations resume under private management, many questions remain:

Will the new model restore profitability and trust?

Can farmers be guaranteed fair pricing?

Will workers be absorbed or retrenched?

According to a Kenya Institute for Public Policy Research and Analysis (KIPPRA) policy brief (2024, Issue No. 73), long-term success depends on “sustainable supply chains, transparent governance, and community involvement.”

Nzoia Sugar’s fate will serve as a national test case—for how Kenya treats ailing public corporations, balances public interest with private investment, and manages the legacy of institutions that once built rural economies.

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References:

1. The Standard Newspaper, Dec 4, 2023 – “Why Nzoia Sugar Ground to a Halt”, p. 16

2. Business Daily, Oct 25, 2022 – “State Sugar Mills Need Overhaul to Survive”, p. 11

3. People Daily, Jan 12, 2024 – “Private Millers Overtake State Firms in Cane Supply”, p. 8

4. Citizen Digital, Dec 5, 2023 – “Nzoia Sugar Resumes After Four-Month Shutdown”

5. Daily Nation, May 3, 2025 – “Govt Signs Nzoia Lease Deal with West Kenya Sugar”

6. The Star, May 6, 2025 – “MPs Oppose Leasing of State Sugar Firms”, p. 9

7. Prime Africa News, May 5, 2025 – Interview with Bungoma Cane Farmers Alliance

8. Auditor General’s Report on State-Owned Sugar Companies, 2024 – Section on Nzoia Sugar, p. 43

9. KIPPRA Policy Brief No. 73, 2024 – “Revitalizing Kenya’s