Kenyan parliamentary panels call for finance minister to be investigated

NAIROBI (Reuters) - Kenya’s finance minister and a cabinet colleague should be investigated over the way they handled sugar imports, a joint report by two parliamentary committees submitted to parliament late on Wednesday said.

FILE PHOTO: Kenya's Cabinet Secretary of National Treasury Henry Rotich speaks at the launch of the first mobile-phone-based government bond at the Treasury building in Nairobi, Kenya March 23, 2017. REUTERS/Thomas Mukoya/File Photo

The East African nation is in middle of an unprecedented campaign against what the government calls illicit goods, to help the local manufacturing sector.

The report by parliament’s agriculture and trade and industries committees said Finance Minister Henry Rotich and Adan Mohamed, who is now East African Community minister but was previously minister for Trade, Industry and Cooperatives, should be investigated over the sugar imports last year.

The report said Rotich had authorized imports that led to a market oversupply of more than 450,000 tonnes of sugar.

It said Mohamed had failed to supervise the country’s standards agency, which falls under the ministry he ran, leading to imports of sugar that was not safe for human consumption.

Rotich did not answer calls from Reuters seeking comment. Mohamed said he had not seen the report and would comment once he had seen it.

Parliament has to vote on the recommendations by the two committees before the report takes effect. It has not said when the vote will take place.

Kenya consumes 870,000 tonnes of sugar each year but domestic production has slumped due to high costs, old and inefficient sugar-crushing machinery, and mismanagement and theft of farmers’ funds.

Local production was nearly 380,000 tonnes of sugar last year, a 41 percent drop from about 638,000 tonnes a year earlier, largely as a result of a severe drought in the first quarter of 2017, according to government data.

Any shortfall is usually filled by duty-free imports from the Common Market for Eastern and Southern Africa (COMESA).

Executives in the sugar industry say the import permits are usually handed out to well-connected individuals in an opaque process that distorts the market and puts local producers at a disadvantage.

The parliamentary report also recommended that former Agriculture Minister Willy Bett be investigated to find why he allowed 14 companies to import the duty-free sugar.

Bett, who was appointed ambassador to India earlier this year, was not immediately available for comment.

Editing by Catherine Evans