Taxpayers to lose billions as gov’t set to sell maize at a loss


Taxpayers to lose billions as gov't set to sell maize at a loss
File image of maize. PHOTO| COURTESY

In Summary

  • Acting NCPB MD told a Senate Committee that they need cabinet approval to sell the maize at a lower price and thus escape further losses should the maize go bad.
  • By April 2018, NCPB had procured 3.6 million bags of maize, each 90 kilograms.
  • Each bag was valued at a government premium price of Ksh.3,200. The total cost was Ksh.11.5 billion, even though Ksh.3.5 billion is yet to be paid for.

Even before investigative agencies unravel the Ksh.11.5 billion maize procurement scandal, the country could lose at least Ksh.3.2 billion shillings from the maize that was purchased.

The Acting Managing Director of the National Cereals and Produce Board (NCPB), Albin Sang on Wednesday told a Senate Committee that they need cabinet approval to sell the maize at a lower price and thus escape further losses should the maize go bad.

By April 2018, NCPB had procured 3.6 million bags of maize, each 90 kilograms. Each bag was valued at a government premium price of Ksh.3,200. The total cost was Ksh.11.5 billion, even though Ksh.3.5 billion is yet to be paid for.

NCPB’s responsibility is to stock food produce for the country’s food safety but, as per its procedures, maize stored in silos should be emptied after six months as it begins to yellow and lose value.  The board now finds itself in a position that it has to dispose the maize and replenish with fresh white maize.

With the current market price of a bag of maize at Ksh.2,300, if NCPB were to dispose the maize at the current price before it drops further, then the tax payer would lose at least Ksh.3.2 billion. But to make this sale, NCPB awaits a cabinet approval.

“We are considering selling in it. We are seeking possibility of selling maize at less than Ksh.3,200; it would require cabinet approval… we need guidance on where the maize should go,” said Mr. Sang.

Uasin Gishu Senator Prof. Margaret Kamar, on her part, said; “It’s sad that we might lose 60% of the crop because it’s yellowing.”

The imminent loss is a disturbing reality for a country that spent Ksh.11.5 billion to procure maize from farmers, only that opportunist traders denied genuine farmers a chance to reap from the premium price.

Senators are also disturbed by the reality that, in 2017, the country imported 10.5 million bags of maize duty free. In fact, a 45-day extension was granted on October 30, 2017 during a season of bumper harvest by Kenyan farmers. Hundreds of farmers still hold maize in their stores 8 months since harvesting.

NCPB now reports, from the imported maize, it still has 300,000 bags in its stock that need to be disposed before they get spoilt.

The senate ad hoc committee on maize now wants Agriculture CS Mwangi Kiunjuri to supply it with responses on the issues within seven days.

For Citizen TV updates
Join @citizentvke Telegram channel



Video Of The Day: On Viusasa, now you can download your videos and play them back later

Story By Sam Gituku
More by this author