Ethiopia beats Kenya as it Privatizes 13 Sugar Factories

Ethiopia attracts $13 billion of inflows under PM Ahmed Abiy

Ethiopian Government has launched the Request for Information (RFI) which will set the pace started of privatising 13 sugar factories which are operational and under construction.

The Ministry of Finance and Ethiopian Sugar Corporation will use the RFI to gather information used to assess potential investors seeking to buy the sugar factories clarifying that  it should not “be construed as a competitive solicitation nor as an obligation on the Ministry’s or Sugar Corporation part to enter into any contract or make any purchase.”

In Kenya ,the government has announced plan to privatize Mumia sugar factor a bid that has received backing from Western MPs.

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Eyob Tekalign, Minister for Finance, said “It’s about time the government stops interfering in projects that ultimately result in macroeconomic strains.”,”

“This RFI is not an invitation for privatization or a PPP process; it is only to initiate the private sector participation process. Based on the information provided by respondents to this RFI, the Ministry will determine the form and mode to engage the private sector in a competitive tender process in line with Ethiopian government Laws and regulations. No purchases will be made as a result of this request,” Eyob was quoted by New Business Ethiopia.

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There are eight operational sugar factories in the country with an annual production capacity of four million quintals, in the previous fiscal year; Ethiopia imported 4.1 million quintals of sugar.

In 2018 in Kenya, agriculture CS Mwangi Kiunjuri launched a task force to address the crisis in the sugar sector. Probably because many Kenyans—especially those reeling from the collapse of the once vibrant sugar industry—viewed the launch as yet another of the many doomed attempts to revamp the sector, the occasion did not receive much media play.

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For a long time, the woes bedeviling the sugar industry have been highlighted in the media, especially the sorry state of the former sugar belt regions in Western Kenya.

According to the Food and Agriculture Organisation of the United Nations, in 2009, the contribution of sugar to the country’s agricultural output was 15 per cent. In fact, it was estimated that 25 per cent of Kenya’s population depended directly or indirectly on sugar mostly through the 250,000 smallholder farmers supplying nearly 80 per cent to the factories. The rest is supplied by factory-owned nucleus estates. Fast forward to 2018; the story is depressing to say the least.

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