• Government to invest $30.9 million yearly to boost sugar sector
• Funds sourced from a 4% Sugar Development Levy on local output and imports
• Allocation to cover plantation expansion, infrastructure, research, and factory upgrades

The Kenyan government has announced a new plan to support the country’s sugar industry. On June 16, Agriculture Minister Mutahi Kagwe unveiled an annual investment package of 4 billion shillings ($30.9 million) to improve the sector’s business environment.

According to local media, the funds will be raised through the Sugar Development Levy (SDL), in effect since February 1. The SDL imposes a 4% tax on the value of sugar produced locally by industrial firms and on imported sugar.

Of the announced funding, 40% will go toward expanding sugarcane plantations to boost raw material supply. The remaining portion will be used for other strategic initiatives, including road rehabilitation in production areas, research and innovation, and factory modernization.

“These investments are designed to secure the long-term sustainability of the sugar industry,” said Kagwe. The support package comes as Kenya’s sugar sector begins to recover. The FAO expects national sugar output to reach 800,000 tons by the end of the 2024/2025 season, up 60% from 500,000 tons the previous year. This marks a second consecutive year of growth following a production slump in 2023.

The sector’s revival follows the enactment of the Sugar Act in November and the reactivation of the Kenyan Sugar Board. Since then, more privately funded sugar initiatives have emerged. A consortium of European and Asian companies recently announced plans to build Muwariziki Sugar Millers Limited in Homa Bay County at a cost of 1.5 billion shillings.

With these developments, local production is set to play a greater role in meeting domestic demand. In 2024/2025, Kenya is projected to consume 1.2 million tons of sugar, with 33% expected to come from imports, according to FAO estimates.