The Co-operatives and MSMEs Development Cabinet Secretary, Simon Chelugui, has denied reports that the New Kenya Co-operative Creameries Limited (NKCC) is one of the entities that the government plans to privatize. The CS has instead stated that the government is reinforcing the dairy processor since it is a critical source of income for Kenyan farmers, particularly as a buyer of last resort. According to the CS, a four-year cabinet decree on this matter has not yet been invalidated.
“On March 29, 2019, the Cabinet decided to exclude the New KCC from the privatization program. That resolution still stands and can only be reversed by a similar Cabinet resolution,” the CS confirmed. The CS also mentioned that he would write to the National Treasury on the issue, citing the 2019 resolution and outlining why the Cabinet believed KCC was not eligible for the privatization program.
Chelugui disclosed that if the government decided to sell the New KCC, the first offer would go to farmers via their respective co-operative societies. The Cabinet’s 2019 memo highlighted the role of KCC in the dairy industry and emphasized the processor’s position as the buyer of last resort. Furthermore, the Cabinet acknowledged the New KCC’s role in government intervention in addressing dairy sector issues such as price stabilization.
Chelugui had joined the Board of Directors of the New KCC for a meeting to discuss the processor’s new strategic plan. He assured the leadership of the dairy processor that as far as the Cabinet was concerned, unless another Cabinet memo was brought, the Chair, CEO, and the board of management would not consider privatization. He said, “I am not saying privatization is bad, but we want to complete the establishment and strategically position KCC before offering it to the market.”
