Intrigues behind the Sh6billion maize subsidy programme

Some of the government branded packets of maize flour. /COURTESY
Some of the government branded packets of maize flour. /COURTESY

When maize flour prices surged to a record Sh150 per one kilogramme packet last year, the government through the Agriculture ministry sprang into action by promising to subsidise the grain to millers.

The effect was a drop in prices to Sh90 per kg.

What was not disclosed — and still remains a closely guarded secret among high ranking officials —was the exact source of the maize.

Agriculture CS Willy Bett announced in January last year that Kenya would import maize from Mexico to relieve the devastating grain shortage. But his announcement raised several questions and pressure mounted on the government over the months leading up to May.

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On May 4, the Kenya Revenue Authority published a gazette notice sanctioning the importation of maize and the 29,900 tonne consignment arrived six days later aboard the bulk carrier IVS Pinehurst.

This swift delivery raised questions whether the maize really came from distant Mexico.

Parliament was the first to pile on the pressure. The Committee on Agriculture questioned the speed at which the maize arrived at the Port of Mombasa.

Transport Permanent Secretary Paul Mwangi was quick to respond to queries, insisting the maize had been purchased from South Africa, which in 2016 had bought it from Mexico and stored.

It later emerged that the maize had been imported by UK-based Holbud (UK) Limited, which is owned by billionaires Hasnain Roshanali Merali, David George Rowe, Mahmood Gulamhusein Khaku and Shaukat Akberali Merali.

Unknown to Kenyans, as the maize from South Africa was being distributed to millers, the government was just wrapping up another deal with Ethiopian billionaire businessman Belayneh Kindie to import another 70,000 tonnes of maize for $15 million (Sh1.5 billion).

Kindie would partner with UK-based Cypriot national Philippos Philippas for the deal, which has now emerged to be 25 per cent or a quarter of the total Sh6 billion grain imported during the maize subsidy programme.

Buried even deeper in the chamber of secrets was the fact that some of the grain was to arrive from Addis Ababa where Kindie had ready stock.

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Details of when and how the consignment arrived in Kenya remain unknown. They may be revealed, however, in the suit involving Philippas’ three firms and Kindie, depending on the course of the dispute.

The government has since signed another deal with the Mexican government for more maize imports this year, in case of another shortage due to delayed rains, which caused last year’s shortage.

The showdown between Kindie and Philippas has also revealed how fortune smiled on the Ethiopian businessman in May last year.

Just days before landing the Kenya maize import deal, signed on May 16, the businessman's firm had been confirmed as the only Ethiopian company authorised to export maize to East and Southern Africa.

What remains a mystery is how much more of the subsidised maize worth Sh6 billion was sourced from other countries, who imported it and on what terms.

Kindie’s claims of over-invoicing by Philippas’ Huyton Inc, if proven to be true, could raise questions about how much taxpayers' may have paid in inflated debt to other suppliers that brought in grain during the shortage.

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