Different contracts for millers in unga subsidy shocks MPs

Agriculture Cabinet Secretary Mithika Linturi before the National Assembly Committee on Agriculture and Livestock

Agriculture Cabinet Secretary Mithika Linturi before the National Assembly Committee on Agriculture and Livestock to respond to queries on the maize flour subsidy programme at Parliament Buildings on March 22, 2023. The CS urged the lawmakers to summon the officers involved in the maize flour subsidy scheme.

Photo credit: Lucy Wanjiru | Nation Media Group

Parliamentary investigations into former President Uhuru Kenyatta’s Sh4 billion maize flour subsidy programme have taken a new twist after it emerged that there were two separate contracts signed with the millers who supplied the commodity in the one-month period between July 21 and August 17, 2022.

Documents presented before the National Assembly Committee on Agriculture and Livestock indicated that the two groups of millers — the Cereal Millers Association (CMA) and United Grain Millers Association (UGMA) — signed different contractual obligations for the supply of maize flour.

While the contract signed by CMA—composed of the country’s largest millers, 27 in total—did not obligate them to ensure the maize flour actually gets to the market, the other one stipulated tough obligations for the 102 small-scale millers under the programme.

The contract signed between the government and CMA through the office of the Attorney-General stipulated that the millers would not be held responsible if the maize flour failed to reach consumers, while the one signed with UGMA laid out tough conditions, including that the traders would be held responsible for the price a packet of flour would retail at.

Summon calls 

Agriculture Cabinet Secretary Mithika Linturi, who appeared before the committee yesterday to shed light on the subsidy programme, urged the lawmakers to summon the officers involved in the subsidy scheme.

“The contract that is purported to have been approved by the Attorney-General is two lines…the other one is four lines and it goes to the extent of saying that the millers shall not be held accountable for the price of unga and whether the unga reaches the consumer or not. I am in a very awkward position and I request that the committee does its work. This is theft of public resources,” Mr Linturi told the committee.

The CS further questioned the secrecy under which the subsidy programme was implemented and said that the documents concerning the agreement and payment schedule could not be traced at the Ministry of Agriculture.

“We did our best as a ministry to trace the documents, including the minutes and other details of the agreements but we could not locate them. They were signed by the National Treasury, which has said it cannot also locate them. We are at a loss on what transpired,” Mr Linturi added. 

Committee Chairperson John Mutunga questioned why both groups of millers would be made to sign different contracts yet they were carrying out the same assignment.

“We have seen all those differences in the contracts between both groups of millers. We are aware that the large-scale millers were given total comfort to supply the maize and there were no penalties that were given. They escape the responsibility of whether the unga reaches the end user and the price at which it reaches the consumer. It was skewed to support the large millers and I want to tell you why; to give out public money,” said Mr Mutunga, who is also the Tigania West MP.

Nyando MP Jared Okello alluded to the fact that a government official might have altered the contents of the contract to steal public funds.

“We are dealing with a case of falsified contracts. It is highly unlikely that the millers sat down to alter the contract. Who is going to bear responsibility for this falsified contract? What is going to happen to the other payment that has already been made to the millers since we are dealing with a falsified contract?” Mr Okello posed.

The lawmakers had met the two groups of millers last week, where the traders lamented that they had no money to run their operations as they were yet to be paid.

CMA is asking the government to pay it Sh2.57 billion while UGMA is owed Sh300 million.

The MPs are, however, sceptical of the pay demands, indicating that flour, which was expected to retail at Sh100 for a two-kilo packet, did not reach consumers.

They have accused the millers of working in collusion to embezzle public funds. The committee directed Mr Linturi to provide all the contracts concerning the subsidy programme and any other documents for further scrutiny.