Shocking details emerged yesterday of how the government lost Sh4.5 billion in a bizarre maize scandal styled as a pro-poor programme to cushion Kenyans against the high cost of maize flour in 2017.
Members of Parliament were shocked to learn that the government bought maize worth Sh4.5 billion from five local companies at Sh3,600 a bag, and later sold the maize to the same companies at Sh2,300 a bag. Agitated MPs described the whole transaction as a government stealing from itself.
“The same government bought the maize from the five companies at Sh3,600 and sold the same maize to the same five milling companies at Sh2,300 per bag; is this not the same as the government stealing from itself?” angry Kiharu MP Ndindi Nyoro summed up the whole issue.
The details tabled before MPs showed the government bought the maize from five local companies yet it was supposed to import the grain from foreign countries. MPs who sit on the Public Accounts Committee (PAC) chaired by Opiyo Wandayi were shocked to learn that despite the said imports, crucial documents to support the expenditure had gone missing and could not be traced by the Ministry of Agriculture. By selling the maize to the government at Sh3,600 a bag and later buying the same maize from the government at Sh2,300 a bag, the government made a clean loss of Sh1,300 from each bag in the transaction while the companies made an equivalent amount in profits.
According to a document tabled before the committee, the five companies included Export Trading, which sold the maize to the government on three different occasions and was paid Sh3.5 million and Hydrey P Limited that sold its maize on five different occasions and was paid Sh3.1 billion. Others are Kitui Maize Millers Ltd that was paid Sh400 million, Mombasa Maize Millers which received Sh 609 million and Pembe Flour Millers, Sh400 million.
Principal Secretary in the ministry of Agriculture Hamadi Boga and National Cereals and Produce Board (NCPB) operations manager Jones Kanyaa, confirmed to the committee that Kitui Maize Millers, Mombasa Maize Millers and Pembe Maize Millers actually bought the same maize it sold to the government at a lower price.
In particular, Boga told MPs the decision by the government to buy maize from millers was made by the Cabinet, which mandated an inter-ministerial committee to spearhead the whole process. The PS said the decision to buy the maize at the time was based on the fact that the government was determined to lower the price of maize flour to Sh90 for a two-kilogram packet after millers had increased the prices to Sh130.
“If I was the one at the helm. I would have done things differently. I would have allowed millers to import the maize and then give them tax remissions,” he said.
The PS, who expressed concern over how the whole matter was handled, explained that maize importation had been liberalized, a move that saw the government buying maize from any person who imported the commodity.
“The circumstances around this subject are very controversial. This was the time we had unga issue and that is why this maize was basically liberalized and those who had the maize were compelled to sell it to the government. Whoever had maize even in the high seas and the ship docked the government purchased the maize immediately.”
The NCPB official, Kanyaa, who took part in the distribution of the maize to the millers, said the said companies that sold the maize bought the same commodity from the government at the discounted price.
“I can confirm that the same millers that usually import maize such as Kitui Millers and Mombasa Maize Millers were also the beneficiaries of the subsidized maize,” the official said.
The revelations emerged at a meeting between the committee, the PS and top officials from the Agriculture ministry who had been invited to shed light on the importation of maize that saw the government spend Sh 11.6 billion in the 2016/2017 financial year. Following the revelations MPs present including Wandayi, Tom Kajwang’ (Ruraka), Nyoro (Kiharu), Daniel Rono (Keiyo South) and James Gichuhi (Tetu) threatened to order for fresh investigations into the matter.
Wandayi said it was evident there was no importation as the whole issue was a gimmick crafted to enrich a few individuals.
“Are you telling us that the government bought maize from Kitui Millers and purported to have imported it? It is clear that this is a case where we had fake importation of maize. This is very serious,” Wandayi said.
Kajwang’ likened the issue to the Goldenberg scandal where people played with papers to enrich themselves. Nyoro said it was outrageous that the government ended up spending more money to buy its own maize from local millers yet all along Kenyans had been made to believe the said maize had been imported.
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