Nairobi — Cabinet has approved Comprehensive Overhaul of State-owned sugar companies paving way for private sector participation and modernization.

The government dropped plans to privatize State-owned sugar firms in the country following sustained opposition from various stakeholders in the sugar-belt region.

The ailing State millers that had been earmarked for privatization include Nzoia Sugar Company, Chemelil Sugar Company, Miwani Sugar Company (In Receivership), Muhoroni Sugar Company (In Receivership), South Nyanza Sugar Company, and Mumias Sugar Company (In Receivership).

"If the proposal by Cabinet receives Parliamentary approval, the State-owned entities would be operated under a lease and operate framework," the Cabinet dispatch stated.

In April, President William Ruto said that the five sugar factories, together with Mumias Sugar Company, have debts of up to Sh60 billion, which he said would be written off by his government.

The five companies are in urgent need of modernization to survive competition from the entry of other sugar producers and an impending end to sugar import limits from the Common Market for Eastern and Southern Africa (COMESA) trade bloc.

Cabinet has sanctioned the extension of the framework for duty-free importation of milled sugar to bridge the supply deficit.

The move at reducing at the high retail price of sugar fueled by an acute cane shortage in the country.