Govt Finally Clears Salary Arrears for Workers in 4 Parastatals

Employees of four state-owned sugar companies can finally breathe a sigh of relief after the government through the Ministry of Agriculture and Livestock Development agreed to settle their salary arrears.

These include employees working for Nzoia, South Nyanza, Muhoroni, Chemelil, and Miwani sugar companies.

Through a notice accessed by on Friday, January 19, Principal Secretary of State Department for Agriculture Kipronoh Ronoh requested both staff and farmers to confirm their bank details with the management of the sugar companies in readiness for disbursement of the arrears.

“The State Department for Agriculture wishes to inform farmers and staff who work/worked in the sugar companies that the government concluded the audit of debts and is now ready to pay the arrears,” PS Ronoh stated.

A tractor ploughing a sugar cane farm


Nzoia Sugar Company

According to Ronoh, the move was triggered by the government’s plans to lease out the said sugar companies, forcing it to first clear pending debts before renting out the companies.

Even so, the PS clarified that for employees of the Miwani Sugar Company, their salary arrears would be settled once a pending court case is finalised.

A September 2023 report by Kenya Sugar Plantation Union and Allied Workers Union revealed that workers at Chemelil Sugar, Nzoia and Sony Sugar had gone for 53 months, 15 months and 19 months without salaries respectively. 

Another report submitted to Parliament by the Kenya Revenue Authority in the same month revealed that Sony, Chemelil, Muhoroni, Nzoia, and Miwani Sugar Companies owe Ksh16.37 billion in taxes, penalties, and interest.

KRA while making its submissions before the Agriculture and Finance Committee noted tax waivers for the said companies were not possible as a result of the enactment of Finance Act 2023 that included amendments to tax write-off provisions.  

“The financial woes of these state-owned sugar companies are staggering, with a collective debt reaching a staggering Kshs. 128.06 Billion as of June 30, 2023. The debt has been a major impediment to the industry’s growth and sustainability, “Molo MP, Kuria Kimani noted during Agriculture and Finance Committee meeting.

However, in October last year, the Cabinet approved a Ksh117 billion write-off of public sugar companies’ debts in bank loans, tax arrears and penalties, and farmers’ and employees’ dues. 

According to a Cabinet dispatch, the sugar companies owe a whopping Ksh117 billion in bank loans, tax arrears, and penalties, farmers’ and employees’ dues. They owe banks Ksh65 billion, Ksh50 billion in taxes, and nearly Ksh2 billion in farmers’ dues.

President William Ruto and CSs praying during a cabinet meeting at State House on Monday, November 27, 2023


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