3 reasons why Kenyans think the government's cheap Unga is too good to be true

Retailing at Sh90 for a 2kg packet of maize flour and Sh47 for 1kg is a huge relief for Kenyans who until recently had to folk out Sh150 for a 2kg packet of maize flour.

Kenyans have however poked holes at the whole maize importation process and even the price, some even arguing it is the next maize scandal.

“The point is simple. How do subsidies work? What's changed the manufacturing process for the flour to cost 90? It means GOK is also paying for them.” Market researcher who goes by the name soko analyst in his twitter handle argues.

Also read: You can only buy 2 packets of cheap Unga - Government

Let’s examine some huge gaping holes in the whole maize from Mexico saga which is expected to run (premier) for 5 months at a cost of Sh6 billion.

The whole process stinks to high heavens…Imeoza

Subsidies sole aim is to make prices of goods and services affordable so that the ordinary Wananchi can afford it. The government achieves this by paying for part of the cost of the production by offering tax credits or reimbursements or by either paying for part of the cost a consumer would pay to purchase a good or service.

Holbud Limited associated with billionaire Naushad Merali is the firm mentioned which imported the maize, and therefore must have received major tax breaks from the government.

Also read: 5 unique things Kenya has in common with Mexico

In 2014, the same company was adversely mentioned in the maize scandal after it controversy won a tender worth Sh6billion to supply fertilizer on behalf of the ministry of Agriculture.

Members of the agriculture committee sought audience with Mr. Merali to no avail.

Earlier in 2002, the same firm had also been allowed to import more than 16,000 tonnes of maize from South Africa, when the Kenya faced a crisis similar to the one we are in today.

Could it be the firm simply bought the maize from its reserves in South Africa?

It is not helpful either that there are two versions of the story, Agricuture CS, Willy bett claims that the government did not import the maize rather Holbud Limited imported the maize, this analogy is backed by the deputy president, William Ruto.

Transport Principal Secretary Paul Mwangi on the other hand insists that it is the government of Kenya which imported the maize last year.

Date Disparity

This is has especially got Kenyans talking, the cheap Unga has a clear date of manufacture which is March and is expected to expire on August.

That is not news if it was an ordinary case however parliament was recalled on May to pass a subsidiary budget to allow the government to allegedly import maize from Mexico, never mind Mexico later denied selling the same to Kenya.

Also read: Hungry Kenyans Invade Uganda

If indeed the maize was only recently ordered why then does the packet indicate it was manufactured in March?

Kenyans would remember that March was when most supermarkets shelves were empty and prices of goods like milk was at an all-time high, could it be that well connected scrupulous business men/women instigated the shortage by hounding the maize until the government announced it was importing the same?

The cheap maize is all but a mirage

To implement subsidies, governments need to raise taxes or reallocate taxes from existing budgets.

Where does government gets its funds? From taxes of course and as far as we know the government did not print any money to cater for this.

So Holbud Limited was given its tax holiday but for ordinary Kenyans we have to pay for it eventually.

Kenya is a capitalistic system and most prices of goods and services are determined by market forces, only on rare cases as the government stepped in and control the prices like the bank capping rate.

Nothing major has happened on the global market to initiate sharp drop of prices, the manufacturing costs is still the same which begs the question, what lead to the sharp drop of a 2kg maize from Sh150 to Sh90?

Unless the Unga is of cheap quality which is not the case so what does the government do, postpone the bill until later when prices of ordinary commodities would be inflated to cater for the ‘cheap’ Ugali.

For now enjoy your Ugali but wait for your inflated bill later, after elections.