Sh825m lost in maize fraud as hunger bites

The unfolding maize scandal could cost the taxpayer a whopping Sh825 million.

Highly-placed Government sources told the Nation on Wednesday that the Sh150 million quoted in the press could be just a tip of the iceberg and that a cartel of sophisticated individuals was involved in the scheme to defraud the public.

“The actual amount of money involved in the maize scandal is more than what has been stated. It is more than Sh825 million and could even rise to much more when proper investigations are carried out,” said the source who did not want to be named because of the sensitive nature of the investigations.

Price of maize

The latest information on the scandal that was unearthed in November involved 400,000 bags of maize that was released by the Government to millers last month in an attempt to reduce the price of maize flour that had reached Sh120 for a 2-kg packet.

The maize, worth Sh700 million, was distributed to eight millers with one of them receiving 171,729 bags.

It was not clear how the Government appointed the eight millers because there were more than 25 millers who were interested in the contract.

Government sources revealed that in addition to buying the maize at Sh1,750 a bag, the millers were also paid Sh200 per bag as the cost of milling.

The Sh200 Government subsidy was meant to cushion the millers from costs of packaging and milling so that the retail prices would fall to Sh52 for a 2-kg packet. The total cost of the Government subsidy was Sh80 million.

Experts in the milling industry revealed that out of each bag, 16 per cent of the contents are lost as husks and bran which is used for livestock feeding. The total estimate of the waste (husks and bran) was placed at Sh45 million.

This brings to Sh825 million the loss that the Government incurred as it released its own maize to millers in its attempt to reduce the cost of maize flour, which is used to make Kenya’s staple food, ugali.

Government sources also indicated that there were no clear records which could trace how the maize moved from Government stores to the millers and then to the market.

“Where are the records to show how the 400,000 bags were released to millers? Do we have records to show the exact number of kilogrammes of unga (flour) that was milled and have they reached people in rural areas?” asked the source.

Release to millers

The 400,000 bags of maize was part of the 1.2 million bags that Prime Minister Raila Odinga ordered the National Cereals Produce Board to release to millers at Sh1,750 a bag at the beginning of last month.

This has generated new fears that the five million bags of maize that was being imported to feed the more than 10 million starving Kenyans could also be stolen by the cartel.

“If this is repeated with the new maize that we are importing, are we going to get enough food to feed thousands of our people who are starving?” the source asked.

In December, Mr Odinga said the Government was to authorise millers to import five million bags of maize.

Last week, it was revealed that out of another set of 140,000 bags of maize that were to be released to the millers, only 40,000 could be traced. The 100,000 bags that could not be traced were estimated to cost Sh150 million and were said to have been secretly moved out of the country.

Cabinet minister Martha Karua, John Michuki and members of the Parliamentary Committee on Agriculture condemned the loss of the maize and pointed to a cartel in the sub-sector that could complicate efforts to contain famine.