MPs want audit on Sh15bn subsidised fertiliser cash


Cargo Trucks carrying Fertilizer leave the Port of Mombasa in this photo taken on March 13, 2023. PHOTO | KEVIN ODIT | NMG

Parliament has ordered a forensic audit into the expenditure of Sh15 billion that was spent on the procurement of subsidised fertiliser.

The Public Accounts Committee (PAC) has given Auditor-General Nancy Gathungu 30 days to comb through the expenditure and table a report after the committee said it has received information about possible fraud, kickbacks, money laundering and corruption in the procurement of the crucial planting material.

The House in March approved an allocation of Sh15 billion in the Supplementary Budget for 2022/23 to the Ministry of Agriculture for the purchase of subsidised fertiliser.

“As PAC, we have resolved unanimously to sanction a forensic audit into the procurement and distribution of fertiliser subsidy after emerging cases of possible corruption, embezzlement and fraudulent activities in the procurement of the fertiliser,” said nominated MP John Mbadi, who chairs the committee.

“Within 30 days, the auditor-general should table its findings before we commence a public inquiry into a possible fertiliser scandal. We will thereafter conduct an open inquiry starting with the Ministry of Lands that received the money. If the funds were channelled to other agencies such as NCPB and the KNTC, all officers involved will be invited to shed light on this procurement.”

Services rendered

The subsidised fertiliser is being sold at a maximum price of Sh3,500 per 50-kilogramme bag, with the government looking to lower the high cost of production that was incurred by farmers last year when the planting material fetched Sh6,000 per 50-kilogramme bag.

The government settled on the KNTC to procure and sell fertiliser to farmers, a role that was previously played by NCPB, which would then bill the Treasury for services rendered.

Under the scheme, KNTC will pay the NCPB Sh50 for the distribution of a single bag, well below the Sh150 that the grain handler normally earns for the same quantity when supplying for other agencies, including the government.

The government is mainly supplying Nitrogen Potassium Calcium (NPK) fertiliser under the subsidy programme, forcing farmers who prefer Diammonium Phosphate (DAP)to buy it from agro vets.

The Ministry of Agriculture said it had cut on the distribution of DAP as it seeks to cut acidity levels on soils attributed to continuous use of this type of input.

A survey done by the Central Bank ahead of its monetary policy committee meeting late last month had found that only 29 percent of farmers had purchased subsidised fertiliser as the planting season began in mid-March, citing a lag between the date of receipt of notification and redemption of the voucher.

Some of those who had not registered for the plan also cited poor quality of the fertiliser, limited stocks, delayed delivery and lack of money.

The Kenya Agriculture and Livestock Research Organisation (Kalro) subsequently urged the government to include DAP fertiliser in the subsidy to increase the absorption rate by farmers and enhance productivity on farms.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.