Linturi queries Sh3.5bn maize subsidy debt
Agriculture Cabinet Secretary Mithika Linturi.
Agriculture Cabinet Secretary Mithika Linturi has cast doubt on Sh3.5 billion of the maize subsidy spent by former President Uhuru Kenyatta’s regime in the last four months of his rule.
The minister told the National Assembly Committee on Public Petitions that out of the Sh4 billion that was released for the maize subsidy programme, only Sh532 million is eligible for payment.
Mr Linturi said only small millers have been able to prove their case that they indeed supplied subsidised maize under the programme.
“I want to tell this committee that only the small millers have been able to prove that they did something, and Sh532 million is worth being paid out. I can’t see what the big millers did,” he said.
Mr Linturi was appearing before the committee over a petition by Consumers Federation of Kenya (Cofek) secretary-general Stephen Mutoro over the expenditure of a Sh4 billion maize subsidy that was spent during the reign of President Uhuru Kenyatta.
Documents Mr Linturi presented before Parliament indicate that as of May 2022, the maize stock was about 5.3 million bags, implying that the country would have a two-month deficit of maize, which is equivalent to six million bags until the next harvest, which was coming up in July-August 2022. The documents show that maize imports also decreased to 217,676 bags in April compared to 343,203 bags in March due to constrained regional supply.
Maize prices ranged between Sh4, 600-5,000 in May 2022 compared to Sh3,000-3,500 per 90-kg bag between January and April 2022
The State then intervened by waiving duty for six million bags of white non-GMO maize to be imported from outside the East African and Common Market for Eastern and Southern Africa blocs through a gazette notice dated May 9, 2022, to bridge the gap.
Despite the intervention, prices continued to rise due to disruptions in the global supply chain.
The imported maize landing price was Sh5,700 to Sh6,500 per 90-kg bag. The price of the shifted maize flour of the popular brands loved by Kenyans remained high retailing at an average of Sh190-215 per 2kg packet
On July 21, 2022, the Treasury released Sh4 billion for the flour subsidy programme pending regularisation in the financial year 2022/23 supplementary estimates No. 1.
Mr Linturi, however, told MPs that how the Sh4 billion was spent remains opaque, calling on MPs to indict former Agriculture minister Peter Munya and his former Treasury counterpart Ukur Yatani.
Responding to a question by Awendo MP Walter Owino, who sought to know the way forward since Parliament failed to approve the expenditure within the required constitutional timelines, Mr Linturi told MPs to invoke Article 226. “Now that MPs have failed to approve the payment within the required timelines, what happens? Will the former agriculture CS be forced to return the money, or what does the law say?” asked Mr Owino.
The Sh4 billion maize subsidy is among the amounts spent in the last days of President Kenyatta’s regime under Article 223 of the constitution allows the treasury to spend on emergencies without the approval of parliament.
The law demands that the treasury seek approval of parliament within two months after the withdrawal of funds from the consolidated fund.
If Parliament is in recess, then the treasury must get the approval two weeks after the resumption of sitting.
However, when the agriculture ministry presented an application for approval before the agriculture committee, MPs declined to ratify the expenditure until a special audit is done by the Auditor General.
“As we speak, that expenditure has not been regularised by parliament and therefore remains irregular to date,” Mr Linturi told MPs
Mr Linturi told MPs that the Sh4 billion never achieved its intended purpose of lowering the Unga prices as he termed the entire process of releasing the money as opaque.
“According to the report I have, the former CS of agriculture never attended any meeting with the treasury and the millers. We cannot tell who benefited from the subsidy. The process was opaque and money never achieved its intended purpose,” Mr Linturi said.
Mr Linturi told MPs that in the past two years, the country has experienced a steady decline in maize production from 42 million bags in 2020 to 36 million bags in 2021 due to the performance of rains.
He said the country requires 52 million bags which includes other uses such as the manufacture of livestock feeds, stock retained as seed and manufacture of other products.
The average quantity of maize for human consumption in the country is 3.06 million 90kg bags per month which translates to 36 million bags per annum.
Mr Linturi told the lawmakers that the country normally relies on maize import of about 200, 000 bags per month from the East African region to bridge the deficit. However, the supply of maize from the region was also low in 2022 due to poor production of maize across the region in 2021 hence the justification for the subsidy.
