Kenyans have for the third month in a row bought a packet of maize flour above the Sh90 set by the government under the subsidy plan, a pointer that retailers are making huge profits selling the partially taxpayer-funded product.
Data collected by the Kenya National Bureau of Statistics (KNBS) reveals that on average retailers sold a packet of flour at Sh116.56 in July, down from Sh119.08 in June and Sh129.64 in May.
This is in breach of the law that set sifted maize flour prices at Sh90 between May and August.
Kenya on May 16 announced Sh6 billion subsidy on maize imports to help lower the cost of flour which had shot up due to a regional drought and poor planning.
But the subsidised maize flour has been in short supply, prompting retailers to ration the commodity and sell the staple at above the set Sh90 per two-kilo packet.
The publication of a gazette notice in May criminalising the sale of maize flour above the subsidy price seems not to have stopped greedy retailers keen to cash in on the shortage.
The subsidy cut the price of a 90-kg bag of maize to Sh2,300 from more than Sh4,000, allowing the two-kg packet of flour to be sold for Sh90 from May 17 against the market price of Sh140.
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The flour sold from mid-May was milled from the subsidised cheap maize, which arrived in the country on May 9 from Mexico via South Africa.
The Treasury published a gazette notice on May 26 giving legal backing to State control of sifted maize flour prices. This marked the first time the order was issued under a law passed in 2011 allowing price control of essential goods.
This means that those found selling the two-kilo packet of subsidised maize flour above Sh90 risk a fine of Sh1 million or a five-year jail term.
“A person who contravenes the provisions of this Act commits an offence and is liable on conviction to a fine not exceeding Sh1 million or to imprisonment for a term not exceeding five years or both,” states the law.
President Mwai Kibaki signed the Bill into law in September 2011.
The law allows the Finance minister to set maximum prices of essential commodities upon consultation with the relevant industry.