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The government owes cereal millers an outstanding balance of Sh2.6 billion in the maize subsidy introduced last year to stabilise commodity prices of maize flour which had increased to historic highs amid a severe drought. Cereal Millers Association (CMA) Chief executive Paloma Fernandes, said the government has only paid Sh1.8 billion from sales of flour worth Sh4.3 billion. “CMA millers sold flour worth Sh4,340,064,312. Only Sh1,769,822,739 was paid leaving an outstanding balance of Sh2,570,241,572,” she said in a statement to the media.

Paloma urged the government to pay millers the outstanding amounts, to enable them to buy adequate quantities of raw materials to ensure food security during the current difficult climatic and economic times.

A total of 1,027 invoices from CMA were received, audited, and processed, validating their accuracy and completeness, she said.

Cushioning consumers

The subsidy programme was introduced mid-2022 and ran between July 21 to August 17, 2022. It aimed at cushioning consumers from the high price of maize flour that by June 2022 touched a historic high of Sh230 for a 2kg packet.   Under the programme consumers were to purchase a 2kg packet of maize meal at Sh100 instead of the prevailing price of Sh210.

The significant increase in the cost of maize flour was primarily due to the severe drought that impacted the East Africa region.

Adverse weather, coupled with other factors including a global shortage of non-GMO maize resulted in a sharp rise in the price of a 90kg bag of maize grain from Sh3,000 to as much as Sh6,800, which ultimately caused the high price of maize flour.