Agriculture PS on the spot over Sh1.8bn maize cash withdrawal

Agriculture Principal Secretary Hamadi Boga is on the spot following accusations of irregular withdrawal of Sh1.8 billion from the Central Bank of Kenya’s Strategic Food Reserve Trust Fund (SFR) account.

Prof Hamadi is accused of approving payment to a maize merchant, trading as Commodity House, without the approval of the SFR board. Prof Hamadi is the administrator of the SFR Fund.

Noah Wekesa, the SFR board chairman, has written a protest letter to the PS and another one to the Ethics and Anti-Corruption Commission (EACC) seeking an investigation into the withdrawal.

In a sharp response however, Agriculture Secretary Mwangi Kiunjuri Wednesday defended the PS over the payment to Commodity House. Mr Kiunjuri told Parliament’s Agriculture Committee that the payments are part of the Sh3.6 billion pending bills that the ministry owes Commodity House for its importation of maize in 2017.

He said a further Sh400 million out of Sh488 million owed to a maize importer, RTG and Sh61 million owed to Dolphins were yet to be paid. "We know we have pending bills which should be paid.

The President directed that all verified pending bills be paid by the end of the financial year in June. "What was decided is that the SFR fund manager pays Commodity House Sh1.8 billion out of Sh3.6 billion. It is the responsibility of accounting officers to make the payments after receiving the necessary approvals from the Treasury," Mr Kiunjuri told the Adan Haji-led committee.

Dr Wekesa on Tuesday wrote to EACC chief executive officer Twalib Mbarak asking him to probe the transactions.

The SFR maintains that the withdrawal of Sh1.8 billion from its CBK account and payment to Commodity House without the board’s approval was against the law. "This is to officially report to your office that Sh1.8 billion has been unlawfully withdrawn from SFR account at the CBK at the closure of 2018/19 contrary to sections 4(3), 5(1)(c), 14(1) and (2) of the Public Finance Management (Strategic Food Reserve Trust Fund) Regulations 2015.

"The purpose of this letter is to request your office to investigate the matter in view of taking necessary action," Dr Wekesa wrote to the EACC.

EACC spokesperson Yasin Amaro yesterday confirmed that the commission had received the letter. At a press conference in Parliament yesterday, MPs Joshua Kutuny (Cherangany), Caleb Amisi (Saboti), Silas Tiren (Moiben), Alfred Keter (Nandi Hills), Robert Purkose (Endebes) and Marwa Maisori (Kuria East) tabled documents from the SFR indicating that payments of pending bills to traders and merchants featured in a board meeting held in June 2019, but did not receive approval.

The documents show that the board’s priority was to clear the maize farmers’ pending bills, pay part of National Cereals and Produce Board (NCPB) debt to cater for requisite reserves and budget for the purchase of maize in the current financial year.

Mr Kiunjuri accused Dr Wekesa of insubordination, saying he had decided to contradict his boss over the maize importation.

"If Dr Wekesa has taken it upon himself to challenge the minister that is insubordination. There are agencies within government that should have by now taken action on this," Mr Kiunjuri said.

He said the country has a deficit of six million bags of maize, which will come in from the East African Community (EAC) member States.

"The position of the ministry is that there will be no importation from Mexico. We are, however, negotiating with Tanzania, Uganda and Ethiopia which have maize stocks to increase maize that is crossing into Kenya," Mr Kiunjuri said.

He said the planned importation of 12.5 million bags of duty-free maize would have been done by traders and millers from May at no cost to the government.