The government through the Kenya National Trading Corporation (KNTC) is importing a range of household foodstuffs under a Sh24 billion programme as it seeks to ease the pain of the high cost of living, which pushed inflation to 9.2 percent in February.
KNTC, a State corporation under the Ministry of Agriculture, has been allowed to import 150,000 tonnes of rice, 80,000 tonnes of beans, 200,000 tonnes of sugar, 25,000 tonnes of wheat and 125,000 tonnes of cooking oil to tame the current runaway prices of basic commodities.
The duty-free import programme, which has been rocked by controversy, will run for one year from February. Here is what to expect.
How will the food be distributed?
KNTC, whose mandate is to participate in the promotion of wholesale or retail business and e-trade, says it has mapped shops across the country targeting vulnerable populations in low-income areas.
The agency has identified 500,000 kiosks but it will start with 120,000 as it targets selling to the households that are most affected and with low disposable incomes.
Who will do the distribution?
The government has tapped technology firms Twiga Foods, iProcure and Market Force for the distribution of these commodities.
The choice of the three firms is based on their vast distribution coverage and experience in last-mile delivery.
The firms' retail sector services allow their clients to reach targeted consumers in remote areas with technology-enabled supply chains that will allow the State to monitor the price at which the products are sold.
How will KNTC ensure that there are no cases of price manipulation?
The e-commerce platform that KNTC has tapped will ensure compliance and enforcement of the Recommended Retail Price (RRP), with any breach in the selling price detected in real-time.
How will KNTC ensure that the goods are in stock in the selected shops?
Through the distribution application and mapped shops, KNTC expects to have access to information in real-time to ensure daily stock replenishments in all the participating shops across the country.
Will the market collapse in the wake of two sets of market prices running at the same time?
The RRP price will be managed by supply and demand forces. KNTC says this will not collapse the market but increase competition as it will ensure other traders and manufacturers manage their pricing, achieving the overall objective of price stabilisation.
How will consumers identify the goods sold by KNTC?
All commodities sold by the government under this programme will have the KNTC brand name on their packaging.
The corporation will also publicise the Recommended Retail Price for all its commodities in the market through posters and advertisements in mainstream media.
KNTC has facilitated the branded packaging artworks for all its suppliers to use. The goods being imported by the agency have already been packaged in smaller quantities for distribution.
How will KNTC ensure the goods reach deserving households?
KNTC is counting on an e-commerce platform to help it manage last-mile delivery. In addition, it will deploy a team to carry out spot checks and collect market intelligence data and drive awareness among the population.
Which commodities are KNTC stocking currently?
The agency has bought rice worth Sh1.9 billion from local farmers in central and western Kenya since it got the mandate from the government. Cooking oil is expected to dock at the Port of Mombasa mid-this month.
The source of funding for the project
KNTC has secured a 24 billion facility from KCB to back the programme.
The agency says the funds are not enough and is in discussions with the Egyptian Bank Afreximbank and Trade Development Bank to secure enough funding for price stabilisation.