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The National Government has paid more than 75 per cent of debts owed to the National Cereals and Produce Board (NCPB) by various agencies clearing the way for purchase of more maize.

By the end of 2020, NCPB was owed Sh18.1 billion by various State agencies, a sum incurred over the years for grain handling services and other services.

“This is a good gesture as the same will go towards recapitalising the institution to enable it undertake maize commercial trading as stipulated under the new reforms,” said Agriculture Principal secretary Hamadi Boga.

Outstanding debts include Sh6.7 billion for fertiliser subsidy programme, defunct Strategic Food Reserve (SFR) Sh3.2 billion, Sh2.6 billion for handling of the maize importation in 2017, Sh3.5 billion as old debts and Sh1 billion which was supposed to be paid by the Devolution Ministry as services offered for storage and handling of relief supplies.

NCPB board

Consequently, the same agency owe Kenya Commercial Bank (KCB) Sh7 billion which is inclusive of principal and interest.

The NCPB board borrowed Sh4.2 billion from the KCB in 2016/17 and 2017/18 financial years to purchase subsidised fertiliser to be sold to the farmers.

Speaking to the media at a Nairobi hotel during the launch of NCPB ISO certification yesterday, Boga said the debt is what the agency had been owed for services it offered on grain handling. 

“The financial position has improved compared to a few years ago. The debt repayment is contributing to financial strength of the institution and thus will empower it to purchase more maize from the farmers in the next season starting at the end of October. 

Recapitalising the agency is part of the reform agenda Government is aggressively implementing in the food sub-sector,” he siad.

Purchase of maize

NCPB managing director Joseph Kimote said debt repayment has strengthened the financial position ahead of the next season purchase.

So far from the debts paid, the institution has managed to buy 712, 000 bags of maize from farmers at Sh2, 500 per bag in depots across the country.