GOVERNORS TAKE ON GOVERNMENT OVER DECISION TO RETAIN ‘SIZEABLE STAKE’ OF SUGAR COMPANIES IN WESTERN KENYA.

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Council of Governors (COG) lawyer Peter Wanyama leaving Milimani law courts after filed a suit challenging government directive pursuing the privatization of sugar companies in Western Kenya.

BY THOMAS KARIUKI

Governors have now waged war against a government directive pursuing the privatization of sugar companies in Western Kenya.

The Council of Governors (COG) says that the vast lands that the sugar factories occupy belong to the County Governments who hold the land in trust for the local residents and ought to have been consulted before a decision to sell these companies was reached upon.

Through their lawyer Peter Wanyama, the governors’ body said that counties have the sole mandate in Agriculture, except for setting of policy, within the bounds of their respective county governments and as a result may be directly involved in the milling of sugar.

On April 21 2015, the National Assembly approved the privatization of Nzoia Sugar Company, South Nyanza Sugar Company, Chemelil Sugar Company, Muhoroni Sugar Company and Miwani sugar Company.

Information released then by the Privatization Commission was that the government planned to privatize these Companies by disposing off its shares in the companies as follows:

A 51% stake of each of the companies will be sold to strategic investors, a 24% stake in the companies will be sold to employees and out growers farmers who grow sugarcane on contract for the mills and 25% stake in the sugar companies to be retained by the National Government which may later be sold by other means, including initial public offerings, while reserving a 6 per cent stake for farmers.

The privatization had previously been temporarily stopped in a suit filed by the Transition Authority, JR 440 of 2015: Transition Authority vs. Privatization Commission, owing to failure to observe Section 35 of the Transition to Devolved Government Act that dealt with a moratorium on the transfer of assets during the transition period.

However following the expiry of TA’s term, the suit was withdrawn.

“Agriculture is a fully devolved function under the Fourth schedule of the constitution and that under section 29 of part I of the fourth schedule to the constitution,” Mr Wanyama said “the National Government’s role in Agriculture is strictly limited to Agricultural Policy while Implementation of the agricultural policies and other agricultural functions are a preserve of the County Governments.”

The council also contends that by seeking to retain a sizable ownership in the companies the National Government is basically trying to retain a function, milling, that is not part of its agricultural policy role.

They therefore asked the national government to stop meddling in their devolved functions.

COG accused the Privatization Commission of holding a ‘cosmetic’ stakeholder meeting on September 14 2015, where counties aired their specific objections to the privatization process which views they say have been blatantly disregarded.

They thus asked the High Court to issue a conservatory order restraining the commission from implementing the privatization of sugar companies.

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