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{
    "id": 542818,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/542818/?format=api",
    "text_counter": 252,
    "type": "speech",
    "speaker_name": "Hon. Anyango",
    "speaker_title": "",
    "speaker": {
        "id": 130,
        "legal_name": "Dalmas Anyango Otieno",
        "slug": "dalmas-otieno"
    },
    "content": "decisions at national level were people who had no interest whatsoever either on the farmers or factories. When they needed money they would import at any one time. We had a Sugar Development Fund which was never used to develop sugar at all. For a business to survive, the costs and the revenues must be such that there is a net profit which can then be used to preserve the factories. The sugar industries have always been subjected to price controls. There was the price of cane and the price of sugar. In addition, it was the only food item which was taxed. It paid cess, VAT and excise tax. The factories remained unrenewed for a long time until the machinery was too old. In fact, it is even worse. When they got started the Government did not put in any equity as such. What they did was to value the land which they had paid some of the owners from which they acquired the piece of land. The rest of the factory was funded by debt at current interest rates in the economy. It was impossible even in the hands of very good managers to accumulate enough profit to renew the machinery in time so that you achieve efficient production. Then as rural cities on their own, they carried so many social costs which made it impossible and they were not supported in any way by the national Government at that time. It is a sad story. When we come to privatising, we need a fairly creative approach in privatisisng the sugar factories. First, all debts should be written off then the only value that should remain as the value of these factories is the value of the land at fair valuation and the depreciated value of the machinery. That value can be owned by the national Government or by the county governments for practical purposes given that the land was given by the community for that particular purpose. We need a strategic investor who will come with enough capital and management not debt, to renew the factories and replace all the parts that are as old as 40 years and have a new factory that will be sufficient enough to be competitive. Then we have to agree on the ratios of the shareholding between the strategic investor given the capital and managerial expertise that he would be bringing and the county government, if the national Government transfers the current net value of the assets to the county government and writes off the rest. On that basis we must agree on what the sugar farmers should own so that if prices of cane go down, you remain competitive globally, then when the prices are good globally, the profit is then shared with the miller and the farmers at the same time. This is so that the exploitative argument that the Member for Malava was mentioning which is real will not arise. So, we have to come up with a totally creative privatisation approach. What this Report has given to us is useless."
}