By Sheela Tumaini
The Sugar Development Fund (SDF), administered by the Kenya Sugar Board (KSB), was established under Section 41(1) of the Sugar Act No. 11 of 2024, with the main purpose of creating a fund to finance the activities of the sugar industry in Kenya. The fund is to be financed by the Sugar Development Levy (SDL), which is structured to mobilize resources from multiple sources, including:
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Domestic and imported sugar
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Funds provided by bilateral or multilateral donors
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The National Assembly
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A County Assembly
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Any other source approved by the Board
The levy under the SDF will be used to streamline the development, promotion, and regulation of the sugar industry for the benefit of sugarcane growers, millers, farmers’ organizations, the Kenya Sugar Research and Training Institute (KESRETI), the Kenya Sugar Board (KSB), and any other stakeholders eligible for funding under the SDF.
Allocation of the Fund
The levy will be applied to fund the following activities in the sugar industry, based on the following allocations:
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15% – Factory development and rehabilitation (loans)
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15% – Kenya Sugar Research and Training Institute (grants)
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40% – Cane development and productivity enhancement (loans)
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15% – Infrastructure development and maintenance (grants)
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10% – KSB administration (grants)
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5% – Sugarcane farmers’ organizations (grants)
Additionally, a 5% reserve fund will be set aside to support the integrity of the Fund and act as a contingency for unexpected occurrences in the sugar industry.
The SDF will have its own operating budget, distinct from that of the Kenya Sugar Board, with separate annual reports and financial statements. It will be overseen by a dedicated committee, composed of representatives from millers, growers, the Council of Governors, the Principal Secretary for Agriculture, and the KSB CEO.
Collection of the Sugar Development Levy
The Sugar Development Levy will be collected by the Kenya Revenue Authority (KRA), as established by the Cabinet Secretary for Agriculture and Livestock Development, to ensure efficiency and transparency.
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For domestic sugar, levies will be collected by the 10th of the following month.
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For imported and exported sugar, levies will be paid upon entry or exit.
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Late payment will incur a 3% monthly penalty, and may result in license suspension.
How Will This Fund Benefit Industry Stakeholders?
As outlined, the fund has five primary beneficiaries: sugarcane growers, farmer organizations, millers, KESRETI, and the KSB.
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Farmers and millers will receive affordable loans for cane development and factory improvements.
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Infrastructure grants will support rural roads and equipment in cane-growing regions.
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KESRETI will benefit from dedicated funding for research and training.
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Farmer organizations will be supported in areas such as governance, digitization, and advocacy.
The SDF will offer loans at favourable interest rates, including:
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5% p.a. for individual growers
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4% p.a. for farmer organizations and millers
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1% interest reduction for special groups, i.e., women, youth, and persons with disabilities (PWDs)
Loan security will include bank guarantees, land titles, and hypothecation of sugarcane crops.
The fund will also provide grants for public-good projects:
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Infrastructure grants will be allocated pro rata.
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Farmer organization grants will require at least 100 registered members and will focus on capacity building.
Takeaway
The reintroduction of the Sugar Development Fund under the 2024 Sugar Act is more than just a policy change—it represents a strategic overhaul in how Kenya supports its sugar industry.
For decades, the industry has suffered from underfunding, poor infrastructure, weak research linkages, and inefficient processing plants. The SDF addresses these gaps directly by directing resources toward cane development, factory modernization, infrastructure improvement, farmer support, and scientific innovation.
If implemented faithfully, the SDF has the potential to:
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Revive aging sugar factories
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Boost cane yields through modern farming techniques
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Improve rural infrastructure
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Empower farmer cooperatives
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Advance research and innovation
The SDF 2024 isn’t just a comeback—it’s a comeback with a plan. It aims to connect farmers, millers, researchers, and policymakers to enable better governance, advocacy, and sustainability across the industry.
Its success will restore Kenya’s sugar belt as a hub of agro-industrial transformation within the East African Community (EAC), across the African continent, and ultimately position the country in the global sugar market.