Auditor General warns President Ruto's sugar loan relief could hurt farmers
The Auditor General, Nancy Gathungu, has flagged the write-off of Sh12.4 billion in sugar loans as a major blow to the Commodities Fund.
President William Ruto’s move to cancel sugar companies’ debts has come under scrutiny after a new audit raised concerns about its impact on the Commodities Fund's ability to support agriculture.
Auditor General Nancy Gathungu has flagged the write-off of Sh12.4 billion in sugar loans as a major blow to the fund, which is under the State Department for Agriculture.
More To Read
According to her latest audit, the cancellation approved by the National Treasury in March 2024 weakened the fund’s financial strength.
“These write-offs represent a direct reduction in the fund’s reserves, potentially limiting its capacity to extend future financial support to agricultural stakeholders,” the auditor general said.
While she confirmed that the cancellation followed proper channels, including approvals by Parliament and the Treasury, Gathungu noted that the management failed to assess the full impact of the debt relief on the Fund’s sustainability.
“The impact of the fund’s ability to operate as a going concern may be greatly affected, and its objective to support agricultural development may not be achieved,” she warned.
The report comes at a time when President Ruto has made agriculture a central part of his Bottom-Up Economic Transformation Agenda. Besides sugar, his plan also includes reforms in tea, coffee, milk, macadamia, and avocado farming.
However, the audit paints a worrying picture of financial mismanagement. It found huge discrepancies in the amounts recorded as written off and the actual debts owed by the five sugar firms.
In Nzoia Sugar Company’s records, a Sh219 million gap was found, while Muhoroni Sugar had a difference of Sh7.3 million. Loans listed under Miwani Sugar were overstated by Sh134 million, and Chemelil Sugar showed a Sh93 million error.
Auditors said they could not verify the accuracy of Sh1.6 billion in loans and advances due to these variances. Gathungu further warned that the fund is vulnerable to compromise if its records and practices are not urgently reviewed.
Top Stories Today
