Hard truths. Bold Insights. Real talk.
The latest Quarterly Gross Domestic Product (GDP) Report released by the Kenya National Bureau of Statistics (KNBS) shows agriculture, forestry and fishing activities grew by 4.9 per cent during the first quarter of 2026. The performance matched the country's overall economic growth, reinforcing the sector's place as one of the biggest contributors to national development.
Presentations at the conference showed that Brazil has replaced more than four billion barrels of gasoline with ethanol, with ethanol-based fuel remaining cheaper than conventional petrol. Deputy President Kithure Kindiki, who also attended the seminar, said the government will review the Sugar Act and related regulations to formally support ethanol production within Kenya’s legal and economic framework. He added that the government will work with the Energy and Petroleum Regulatory Authority to develop fuel blending regulations. Kagwe defended ongoing reforms under the Sugar Act 2024, saying leasing state-owned sugar factories to private investors has already improved efficiency and increased farmer earnings. “We have discovered that the private sector is a much stronger player, a much more efficient player in the sugar sector than the government sector,” he said. He added that the government has already seen “immediate benefits” within the last year after some public mills were leased to private operators. At the same time, Kagwe stressed that farmers remain central to the reforms, noting that more than six million Kenyans directly or indirectly depend on the sugar industry for their livelihoods. “The farmer is the most important person in the sugar sector, and I say this without any fear of contradiction,” Kagwe said. The government says expanding ethanol production will help reduce Kenya’s dependence on imported fuel, strengthen energy security and create more stable income opportunities for farmers amid volatile global oil prices.
KeNHA warned that sugarcane transport remains a high-risk activity due to the conditions of many tractors on the roads. Most are overloaded and lack functioning lighting, which greatly increases the chances of crashes.
Figures from the Kenya National Bureau of Statistics indicate sugar mills produced 406,807 tonnes between January and August, compared with 541,681 tonnes in a similar period in 2024. This decline of 24.89 per cent has been linked to a lack of fully grown cane after farmers and processors harvested ahead of schedule in previous cycles and scaled back planting, leaving plantations struggling to regenerate.
The ministry directed all sugar companies to comply with the new rate and to ensure farmers are paid without delays.