The new maize flour subsidy programme, though short-term, must be managed well to avoid distorting markets and causing a shortage of the staple. The government says the commodity will retail at a maximum of Sh100 for a two-kilo packet in the next four weeks.
This is more than half the high of more than Sh210 to which the price had rallied over the past few months in what has been attributed to the depletion of the country’s stocks. The Sh100 price is, therefore, less than the cost of production and the government must ensure that millers are compensated promptly to maintain their cash flow and margins.
