Govt Blunder Costs Taxpayers Ksh2.7 Billion

  • Kenyan Currency notes.
    Kenyan Currency notes.
  • Kenyans will bear the burden of paying Ksh2.7 billion as a result of the State turning to the National Treasury for funds in order to facilitate payment for maize millers under the 2017 maize subsidy programme.

    This is after the government failed to settle the outstanding debt owed to the millers. Initially, the State owed the millers Ksh2.3 billion at the end of 2017 when the contract came to an end.

    However, the amount has accumulated over the years to Ksh5 billion due to interest.

    An image of Hamadi Boga
    Agriculture Principal Secretary Hamadi Boga smiling while seated in a lounge
    Business Daily

    Out of the amount, only Ksh3 billion has been settled by the State, leaving a substantial balance of Ksh2.7 billion.

    Agriculture Principal Secretary Hamadi Boga noted that the Ministry had issued a request to the National Treasury to settle the debt.

    "We are waiting for the exchequer to release the funds as the request was made last week," Boga noted.

    The government had initially introduced the 2017 maize subsidy programme in order to boost market supplies and ease the prices of flour which had escalated. The price of a 2 kilogramme packet of unga at the time was sold for Ksh150 minimum price.

    The government contracted local millers to import and sell maize to the State. 

    Once the contract ended, the millers expected prompt payment from the government. However, two years later the millers had not received their due.

    They decried their situation stating that they had taken loans from banks to ship in the produce and thus were unable to pay the accrued bank interest.

    "We are facing serious financial challenges," one miller noted.

    This compelled them to go to court in 2019 to press the State to fulfill the contractual obligations. The court ruled in the millers' favor and ordered the State to settle the debt and pay the interest amount as well.

    An image of maize flour
    A file photo of maize flour on display at a supermarket in Nairobi.