Kenya has once again learnt a painful lesson on how to handle subsidies especially if they are motivated by political goals rather than specific economic outcomes.
Millers have revealed that middlemen bought the cheap stocks and kept them to make a killing after the end of the subsidy.
This has forced some millers to cut down on processing after the flour that had been hoarded by traders resurfaced, making it difficult to compete with the cheap product on the market.
Middlemen are selling the flour to retail outlets at Sh1,800 per bale while they are trading the same at Sh2,200 based on the current price of maize.
This means that taxpayers have handed billions of shillings to a few stockists who hoarded flour after the subsidy programme was rolled out last month, creating a shortage.
Authorities should investigate these reports and seal the gaps that were exploited to punish consumers through shortages of the staple, which led to a jump in alternatives such as rice and other cereals, at a time when consumers were battling with inflation that rose to a 61-month high in July.
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