It’s back to expensive unga as government ends subsidy scheme

Maize flour

A supermarket attendant arranges packets of maize flour at Budget Stores along Moi Avenue in Mombasa. 

Photo credit: Kevin Odit | Nation Media Group

Kenyans return to the harsh reality of expensive maize flour starting today as the government’s subsidy scheme ends.

The Ministry of Agriculture has informed millers participating in the programme of termination of their contracts to supply subsidised sifted maize flour after a four-week run.

“This is to remind you that your contract for the sifted Maize Flour Subsidy Program 2022 lapses on Thursday August 18, 2022,” Crop Development and Agricultural Research Principal Secretary (PS) Francis Owino communicated to some of the millers this week.

The PS’s office yesterday told the Nation there are no plans to extend the subsidy.

“We have processed invoices worth Sh4 billion that was put in the subsidy’s escrow account and made request for additional funds to Treasury, should the remaining invoices exceed the Sh4 billion,” an official said.

The subsidy, however, ends having failed to achieve its objective of ensuring that vulnerable households in the country access cheap maize flour, due to blunders made during formulation of the contract, including limiting supplies to sifted maize flour only and leaving out unrefined maize flour, which is largely consumed by the poor, as well as the ministry’s decision to lock out over 100 millers from the programme.

Yesterday, some of the millers indicated that the cost of maize flour would continue being high since they were still facing a shortage of maize in the country and buying from some neighbouring countries, with maize prices still remaining around where they were when the subsidy was introduced.

“We are buying maize at between Sh5,600 and Sh5,900 for a 90-kilo bag in Narok and Tanzania is not supplying to us. Based on recent movements, there are indications of further rise in maize prices soon,” said Grain Belt Millers Association Chairman Kipngetich Mutai.

By yesterday, shops were still experiencing maize flour supply challenges. At least three supermarket outlets visited by the Nation in downtown Nairobi were only selling premium maize flour brands that were not subsidised with the cheaper flour missing from the shelves.

Indications that the Ministry was considering ending the subsidy were first witnessed last Monday in a leaked memo asking millers to stop supplying the subsidised commodity, stating that the subsidy would end on August 9. The government had contracted 129 millers for the programme.

“Good evening team. The head of warehousing and hub management, Mr Jones Kanyaa, has called to inform us that the ... maize flour subsidy programme has been suspended with immediate effect. The last invoices should be dated today,” the communication from a National Cereals and Produce Board (NCPB) stated. The PS’s office would shortly thereafter disown the statement, saying, the programme was still in effect in a bid to allay fears by millers who claimed not to have been paid about Sh1 billion by then.

“It has come to our attention that a message for NCPB staff to discontinue operating at mills has been distributed. This was a miscommunication and regional leads and officers are advised that operations continue as normal. Please note that the subsidy program is still in effect,” the ministry stated, adding that operations would only be unavailable on voting day.

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