Henry Rotich Government to stop subsidising Sh90 Unga packet in two weeks' time

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The government is set to make major changes on the cost of Unga after...

play Agriculture CS Willy Bett [C], PS Richard Lesiyampe and Cereal Millers Association Nick (Courtesy)

The government is set to discontinue the Sh90 maize flour in two weeks’ time.

The move comes after the Treasury announced an allocation of an additional Sh3 billion to cover maize import costs from August to bridge the looming shortage.

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Treasury cabinet secretary Henry Rotich, on Wednesday told MPs while reviewing the supplementary budget that the subsidy plan will end in weeks with expectations that millers will have access to latest harvests from farmers.

“We have extended subsidy programme to mid-October, therefore, requiring additional resources to continue the subsidy that was expected to have ended in August,” Mr Rotich stated.

In May, the government allocated Sh6 billion to lower the price of a 90 kg bag of maize to Sh2,300 from above Sh4,000, offering importers a rebate of about Sh1,700. Earlier, a 2kg-packet of flour had swollen to over Sh150 in April.

play National Treasury CS Henry Rotich. (Courtesy)

 

The subsidised flour price was backed by a Kenya Gazette notice that criminalised the sale of the product above Sh90. The retail price, however, has remained high despite the notice.

The new announcement by the government to discontinue the subsidised commodity comes in the wake of claims that the army worms may have destroyed crops in Kenya, a move that is set to spell hunger in the nation.

This was expected to keep the cost of the 2-kg packet of flour at Sh90 from a high of Sh153 in April, turning it into a political headache for President Uhuru Kenyatta as he seeks a second term in office.

Meanwhile, on Wednesday, Kenyatta said the government will use another Sh6 billion to buy maize from farmers and replenish the strategic reserves.

“To boost our food security and sustain affordable price for maize flour, the Government will buy under the Strategic Food Reserve, all the maize offered for sale by our farmers during this 2017/18 season,” the President told the Nairobi International Trade Fair attendants.

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