Proposal to dissolve food reserve fund sparks disquiet

Monday May 18 2020
noah wekesa

The chairman of the Strategic Food Reserve Fund Oversight Board Noah Wekesa during a past event. PHOTO | FILE | NATION MEDIA GROUP

By CAROLINE WAFULA

A proposal to dissolve the Strategic Food Reserve Trust Fund (SFRTF) and have its functions transferred to the National Cereals and Produce Board (NCPB) has sparked disquiet with a section of leaders from the Western region now alleging the hand of cartels in the decision.

The decision, set to be implemented in the next six months, is said to have already been approved by the cabinet and results from recurrent conflicts between the two state owned bodies.

But some leaders from the Western region term the proposed dissolution of the body mandated to ensure food security in the country as ill-advised, with a section of MPs now vowing to oppose the decision when it comes up before Parliament.

At its establishment in 2015 under the Public Finance Management Act, SFRTF was mandated to ensure strategic food reserve in the country by ensuring stability of food supplies and prices and mobilizing funds to support related activities.

The fund’s initial capital at establishment was Sh2.2billion, and it has continued to receive budgetary allocations from the government in subsequent financial years.

To oversight the fund, Strategic Food Reserve Oversight Board (SFROB) was established under the same PFM Act (2012) under the SFRTF regulations of 2015 and mandated to provide oversight and policy direction to the fund.

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SFROB is opposed to the proposed dissolution, and instead proposes strengthening of the trust fund into a full corporate body with a Chief Executive Officer to be managed under the National Treasury or Office of the President as a national food security matter.

SFROB chairman Dr Noah Wekesa argues that the board is about food security, hence its mandate goes beyond cereals which NCPB manages.

“SFRTF is about food and this includes dairy, livestock, fish and cereals including rice, which are handled by a cross section of government ministries and departments. All these other foods will remain unattended to if the role of SFRTF is transferred to NCPB whose mandate is cereals only,” the board states.

It argues that dissolving SFRTF will leave the process of strategic food reserve management to ministries without any oversight, taking back the country to the previous status quo where the government lost billions through the Strategic Grain Reserve, which necessitated the establishment of the former.

According to the board, there is a conflict of functions of administration of the fund as the fund administrator who is the Principal Secretary of Crops is also a member of the SFRO board, resulting in an inefficient process and delays in execution of board resolutions and sometimes, a total disregard of the board decisions.

It claims NCPB, which is the fund’s agent for procurement, storage, transportation and sale of strategic food reserve stocks has on several occasions failed to remit full proceeds of sale of its Strategic Food Reserve sales and overtime accumulated debts of unpaid invoices after failing to provide necessary documentation to facilitate settlement of the same.

The fund currently boasts of a balance of Sh10 billion at the Central Bank of Kenya, which it attributes to proper oversighting by the SFROB in purchase and sale of strategic food reserves to millers and institutions and stabilized market prices.

SFROB argues that it has continued to provide advice to the government, including advising against importation of 12.5million bags of maize last year, resulting in stabilised market prices in the period.

It also cites a Sh 1.8billion withdrawal from the SFRT fund currently under investigation by the Ethics and Anti-Corruption Commission, (EACC). The money was paid to a vendor without the approval of the board.

In its many fights with NCPB, it cites what it describes as fraudulent invoice claims filed by the former, including a Sh 200million double claim recently.

A report by a task force appointed by President Uhuru Kenyatta to review the performance of the maize industry with focus on policy, regulation, production volumes and costs and cheap imports presented in March last year recommended an immediate restructuring of NCPB and the SFRTF to make them efficient and autonomous.