Govt suspends Sh100 maize flour subsidy

Maize flour in supermarket

Different brands of maize floor at a supermarket in Nairobi.

Photo credit: Pool I Nation Media Group

Kenyans will have to go back to digging deeper into their pockets after the government on Saturday suspended the National Maize Flour Subsidy Program due to inadequate funds.

Agriculture CS Peter Munya in a memo said that the suspension was due to inadequate funds from the treasury.

“Due to inadequate exchequer releases from the National Treasury, it has been decided that, the Maize Flour Subsidy Program be suspended with immediate effect,” Mr Munya said.

Last month, President Uhuru Kenyatta announced stimulus measures to cushion Kenyans against the high cost of living, effectively lowering the cost of maize flour.

The Head of State said a 2kilogram-packet of Unga would retail at Sh100 down from an average of Sh225 following talks with millers at State House, Nairobi.

“I note with regret that the cost of a 2 kg pack of maize-meal remains out of reach for many, as it is currently retailing at an average of Sh205,” Kenyatta said after a meeting with Millers at State House.

He announced the suspension of the Railway Development Levy and the Importation Declaration fee, effectively lowering the cost of a 2-kilogram maize flour to Sh100.

“As a consequence of this continued escalation in food prices, I today announce Fiscal Measures focused on food Subsidy, as our Fifth Stimulus Programme covering the supply and distribution of our nation’s staple food – maize meal, across the entire country,” he said.

The move marked the second time the government was invoking the Price Control (Essential Goods) Act of 2011 after the first cap of Sh90 per 2kg of 2017, which was also an election year.

The Act allows the State to set maximum prices of gazetted essential commodities after consultation with relevant industry players.

The government then released Sh8 billion in order to finance the 4-week program which was to end on August 20, 2022.

Rising prices of maize flour and other basic commodities become a political headache for President Kenyatta, and a campaign tool for leading presidential candidates seeking to succeed him.

He blamed unethical practices perpetuated by political elite and millers for triggering the cyclical increases in flour prices during election years.

In 2013, which was an election year, the price of a 2kg packet of flour shot up from Sh70 to Sh130. A similar trend occurred in 2017 — also an election year —when prices hit Sh189 a packet. In June this year, a packet was retailing at above Sh200, the highest in Kenya’s history.

The maize subsidy added to the previous State efforts, including tax waivers, aimed at taming the rising cost of flour. The Ministry of Agriculture in June provided a 90-day duty-free importation of maize as the country awaits harvesting season.

Maize meal is Kenya’s staple food and its cost escalation was threatening to divide the nation, with leaders outside the government calling for urgent measures to lower its price.