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KNTC MD Pamela Mutua fights Sh17bn edible oil scandal as history repeats itself

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Pamela Mutua has exited the troubled Kenya National Trading Corporation (KNTC) as managing director. FILE PHOTO | DENNIS ONSONGO | NMG

Pamela Nduku Mutua, the embattled managing director of the State-owned Kenya National Trading Corporation (KNTC), did not need to have a crystal ball to see her fate.

A reading of KNTC’s history would have told her that the revival of the outfit, established in 1965 by the government of Mzee Jomo Kenyatta to drive his Africanisation agenda, would soon put her in the spotlight. And, most likely, for the wrong reasons.

A relic of Kenya's 1970s and 1980s through which the State decided what to be imported and distributed and by whom, KNTC, together with its parent Industrial and Commercial Development Corporation (ICDC), was a scandal-ridden entity that controversially catapulted a few well-connected indigenous Kenyans into the billionaire status. Foreigners, especially Asians, were locked out from trading in certain goods and regions.

By the time Ms Mutua, 49, took over the corner office at KNTC in January 2021, she found a nondescript entity. In the year ending June 2022, the corporation managed to make sales of Sh2.7 billion, a 200 percent jump from Sh999 million in the previous year.

Read: Court suspends sacking of ex-KDF officer as KNTC chair

In a liberalised economy, KNTC made most of its money by buying items such as rice directly from farmers for onward selling to government institutions. The parastatal was largely unknown until a few months ago.

Then the Kenya Kwanza Administration rose to power in September last year and quickly crafted a plan to bring down the sky-high consumer prices.

Suddenly, KNTC’s balance sheet was to swell by Sh17 billion as the new government of President William Ruto allowed the company to import edible oil valued at the same amount duty-free.

These billions of taxpayers' cash would precariously cast Ms Mutua, who cut her teeth in the private sector, into the limelight.

She is lucky to have had 20 years of experience in brand marketing and communications working for corporate giants such as Safaricom, Coca-Cola, Standard Chartered Bank and CMC Motors.

If she was not responding to criticism of the scheme in the court of public opinion, she was defending it in the court of law. In April, the Law Society of Kenya (LSK) sued the government over plans to import 125,000 metric tonnes of cooking oil duty-free, claiming that the decision would hurt local manufacturers.

Ms Mutua, an expert in communication, was always giving media interviews, painstakingly explaining the new role of the KNTC and defending the Sh17 billion edible import scheme.

In an interview with a radio station, Ms Mutua said she was not amused that the corporation was being described as moribund.

Read: State maps 500000 shops to sell cheap imported food

“We have re-invented ourselves. We have shown that we are capable of doing something and that has given the government impetus to support us to be able to move to the next level,” she said insisting the importation, not only of edible oil but also of rice, beans, wheat was just a stop-gap measure aimed at bringing down the cost of living.

In the 1970s and ‘80s, the importation and distribution of rice, maize, soap, shampoo, batteries, sweets, insecticides, hardware, cement, wire and tools were restricted to citizen traders and wholesalers. KNTC would import, or buy locally, these items to be distributed to agents selected by the government.

In 1974, for example, the five cement distributors for Nairobi included firms owned by prominent members of the Kenyan bourgeoisie; the chairman of Lonrho, an important MP and the brother of the chairman of KNTC wrote Nicola Swainson, a political scientist in 1980.

But in a liberalised economy free of State controls, the Kenya Kwanza administration adopted a different strategy, though the result of benefiting a few well-connected individuals was similar to the KNTC of yore.

Rather than the tender of importing these items being subjected to a competitive procurement, a few suppliers were chosen to import these items, according to the LSK.

When he was Trade Cabinet Secretary, Moses Kuria, who now heads the public service docket, told the Senate that the Public Procurement and Regulatory Authority had allowed the KNTC to buy these commodities, including cooking oil, from some 11 companies without going through competitive bidding.

These firms, the LSK argued, had an advantage over their competitors as they were getting the same items duty-free.

It also emerged that some of the companies were owned by individuals connected with the Kenya Kwanza administration.

For example, four firms linked to the Communications Authority Board chairperson Mary Wambui Mungai, got the contract to import edible oil, rice, and beans in a deal worth Sh6 billion.

Documents filed in the National Assembly show the KNTC also contracted Multi Commerce FZC for Sh8.12 billion to supply vegetable oil and Indian white rice.

Standard Petroleum won a Sh5.5 billion deal to supply rice, red kidney pinto beans, cooking fat and fertiliser.

Lamar Commodity Trading will pocket Sh2.7 billion to supply NPK fertiliser while Charma Holdings Limited has a Sh2 billion tender to supply edible vegetable oil.

The others were Makram Imports and Export Limited with a Sh1.88 billion tender for the supply of Indian raw white rice, Shehena Company Limited to supply edible oil at Sh1.33 billion and Nutrivine had a Sh187.5 million contract to supply rice.

The government had estimated that the cost of basic food commodities would decrease by at least 30 percent under the duty-free import scheme.

Read: State claims Sh17bn at risk if edible oil cargo not released

After that, in six months, said Ms Mutua, the government would get out of the market and concentrate on improving local production of the same items.

She must have basked in the shadow of his outspoken boss who unapologetically went all out to try and silence the critics of the oil importation.

But weeks after Mr Kuria was moved to a different ministry, it emerged that KNTC was stuck with cooking oil valued at billions of shillings. Most of it, it was alleged, was of poor quality.

Last week, it emerged that Ms Mutua was among the KNTC bosses who were held for questioning for possibly defrauding taxpayers through irregular issuance of import tenders.

Read: Trading agency decries leaking warehouses

She is also wanted by the Senate while the Ethics and Anti-Corruption Authority (EACC) is also waiting to question her.

Ms Mutua's stay at the top of KNTC might end up being short-lived. But a refresher course on the tainted history of the 58-year State corporation would have offered her crucial feelers of her fate.

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