Maize millers fault House team for rejecting Sh2.9bn flour subsidy bill


The Budget and Appropriations Committee chairperson Ndindi Nyoro. FILE PHOTO | JARED NYATAYA | NMG

Maize millers have faulted the move by a parliamentary committee to reject disbursement of their pending Sh2.9 billion arising from the subsidy programme last year, even as the payment now becomes subject to audit query.

The Budget and Appropriations Committee chairperson Ndindi Nyoro said the payment is being rejected on the account of non-disclosure of the quantity of maize supplied and the areas in which the subsidised flour was supplied.

Read: State yet to pay millers Sh4bn in maize plan

The move will now see the Auditor-General open an audit query on the subsidy programmes to dig into the truth in an exercise that millers say was executed within the set framework of the previous government.

The processors said on Thursday they should not be punished when they supplied the flour to consumers in a process that was audited by Agriculture and the Kenya Revenue Authority (KRA) officials.

“The subsidy was clearly audited by KRA and officials from the ministry, we followed all the contractual requirements set by the government under the subsidy programme, why would we be punished then?" asked Capwell Industries CEO Rajan Shah.

Cereal Millers Association (CMA) said the government owes them Sh2.7 billion as Kilimo House and the Treasury claims the initial payment that was done by the previous government could not be tracked.

The CMA said its members have so far been paid Sh1.7 billion out of Sh4.3 billion worth of flour they supplied by the time the subsidy programme was ending.

Small-scale millers under their umbrella body — United Grain Millers Association — say the government owes them Sh290 million from the flour they sold under the subsidy programme.

The association’s chairperson Ken Nyagah said the move by the Parliament would impact their members negatively.

The latest directive by Parliament comes as a major blow to millers, who have faulted the move arguing that it is hampering them financially.

Mr Shah said processors are at the moment facing financial cash flow that is almost grounding their operations at a time when the cost of acquiring raw materials has shot sharply amid slow-moving stocks on the shelves.

The subsidy programme was started by former President Uhuru Kenyatta in July last year as the government moved to stem high-cost flour that had hit Sh230 for two-kilogramme packets.

The questions on the subsidy programme were first raised by Treasury Cabinet Secretary Njuguna Ndun’gu in parliament last month after he pointed out that they cannot trace how much and who had been paid.

Read: Millers lose maize import licence in fallout with State over prices

The Ministry of Agriculture weighed in on the matter last week saying that the audit report that they did recently showed glaring gaps in payments.

[email protected]