KISERO: On maize, the biggest scandal was the role of major millers - Daily Nation

On maize, the biggest scandal was the role of major millers

Wednesday November 14 2018

maize scandal

Suspects accused of being involved in the maize scandal are arraigned in a Nairobi court on August 31, 2018. PHOTO | FILE | NATION MEDIA GROUP 

By JAINDI KISERO
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On the maize scandal, we are still at the stage of allegations and indictments, rather than proof and convictions. I think that in the rush to judgment, we risk covering up for the real culprits while giving too much play to peripheral players in the scam.

Me thinks that the almost obsessive focus we have given to the issue of traders who we accuse of having delivered too much maize to the National Cereals and Produce Board (NCPB) at the expense of genuine farmers, has only served to deflect attention from the real perpetrators of the maize scandal.

Make no mistake. I am not saying that the traders who colluded with NCPB officials to fill warehouses by jumping queues and denying genuine farmers access to the most important marketing outlet should not be punished.

DETECTIVES

Action must be taken. But when I hear that detectives have pitched camp in Eldoret and Kisumu where cheap grain suspected to have been imported from Uganda was delivered and prompt payment made even as genuine farmers were kept on the waiting list for months on end, I get the distinct feeling that the investigators are putting the bigger spotlight on a peripheral side of the scandal.

The biggest maize scandal was the decision by Kilimo House to give contracts to politically influential millers to import maize on behalf of the government. The importers brought 11.9 million 90kg bags of maize into the country through Mombasa Port.

HYDERY P LTD

I see from records that the first ship docked on May 10, 2017 and the last on December 27, 2017. The big names in the game were entities such as Hydery P Ltd, Holbud, Mombasa Maize Millers, Pembe Flours and Kitui Flour and Export Trading Company Ltd.

Mark you, the imported maize belonged to the government. The NCPB only handled and sold it at prices determined and fixed by Kilimo House. If the detectives are truly serious about getting to the bottom of the maize scandal, their first port of call must be Kilimo House.

Who decided on the quantities of maize to be imported and the formula used to determine the price at which millers were buying imported maize from NCPB? Why was the maize not sold directly to consumers?

IMPORTED MAIZE

Consider the following: In the first stage, the millers imported the maize at an administratively set cost of Sh3,600 per bag, which after adding transport costs, came to a price of Sh4000 per bag.

In the second stage, the maize was sold to the very same millers and traders at a price of Sh2,300 per bag, a margin of Sh1, 700.

We must not forget that within the same period, the NCPB was buying maize from farmers for the 2017/2018 season at Sh3,200 per bag.

It was a perfect environment for arbitrage and corruption. Me thinks that if the detectives do a thorough job, they will find that some of the maize imported by the government ended up being smuggled back into NCPB stores.

PROCUREMENT

I have before advocated the dismantling of the NCPB and the introduction of a warehousing receipt system. But even before we get there, let us remove Kilimo House from procurement of maize and fertiliser.

Today, Kilimo House operates more or less like a broker, clinging on the responsibility of managing maize and fertiliser procurement and issuing letters of allocations to politically connected traders and millers just to allow them access them from NCPB on the cheap. The case of fertiliser is even more illustrative. Kilimo House is the one that invites tenders and contracts international fertiliser traders.

DEBTS

Kilimo House then assigns the fertiliser import contract to the NCPB to perform and process, including having to seek the financing from the KCB as reimbursement is awaited from the government.

The impact has been total disaster. The fertiliser subsidy programme has left the NCPB carrying huge sticky debts in its books.

The last time I checked, the figure of debts owed to NCPB by the government in the fertiliser subsidy programme had by September this year accumulated to Sh5.5 billion.

Debts owed to the fertiliser contractor, the entity known as Export Trading Ltd, were at Sh691 million.

POOR QUALITY

The investigation will only get to the bottom of the maize scandal if it targets the nexus of powerful politicians, millers, and international trading firms that has maintained a stranglehold over the grain marketing sector for donkey years.

My parting shot is that I am very sceptical about the loud campaign around allegations and reports of maize unfit for human consumption in NCPB stores.

Do not be surprised to hear that powerful millers have negotiated with Kilimo House to have the so-called poor quality maize sold to them at Sh1,600 per bag. We may be on the brink of another maize scandal.

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