- Milers said the amount has attracted Sh269 million interest.
- This translates to Sh44.83 million that taxpayers will have to shoulder in interest every month the payment delays.
Image: EZEKIEL AMING'A
Millers who supplied subsidised maize flour during the sunset days of retired President Uhuru Kenyatta have given the government 30 days to settle Sh2.5 billion owed to them.
The private millers under their umbrella agency, Cereal Millers Association, also cautioned the government risks paying more as a result of the incessant delays, revealing that the amount has so far attracted Sh269 million interests for the six months that the payment has been due.
This translates to Sh44.83 million that taxpayers will have to shoulder in interest every month the payment delays.
CMA chief executive Paloma Fernandes told MPs that the agency has already served a demand letter to the Attorney General Justin Muturi.
“We wish to state that each miller has in place a duly executed and enforceable contract with the government. The millers performed their part of their obligations, but the government has breached terms of the contract, ” Paloma said.
“Due to the foregoing and the negative impact, it has on them (millers), the millers have invoked the Dispute Resolution clause under Article 10 of each miller’s contract and have issued the Attorney General with the 30 days statutory demand notice to settle the above mentioned debt.”
Paloma spoke when CMA appeared before the National Assembly Agriculture and Livestock Committee chaired by Tigania West MP John Mutunga, which is probing the maize flour subsidy programme.
The millers called on the committee to intervene, saying most the delay is causing extreme suffering to millers, disclosing some of them have been auctioned after failing to pay for their loan obligations.
“Kindly note that any delayed payments attract interest which will ultimately be borne by the Kenyan taxpayers. We therefore humbly implore the Departmental Committee to relook at this issue and advise the Ministry of Agriculture to settle the pending bills as per the agreed terms of the contract,” Paloma said.
According to CMA, they supplied Sh4.49 billion worth of subsidised maize flour to the market and only received Sh1.95 billion as payment leaving a balance of Sh2.58 billion as outstanding to date.
The millers were however pushed to prove that they actually supplied the subsidised maize, with lawmakers saying the impact of the subsidy was never felt.
Soy MP David Kiplagat accused the millers of allowing themselves to be used to play politics in 2022, stating that instead of the maize prices dropping during the subsidy period, it only ended up creating shortage in the market.
“Your association was being used to achieve a political end, how can we prove that the consumer consumed those maize flour?” the Soy MP said.
“What taxpayers’ want to know is whether there was value for money?” added Gatundu South MP Kagombe Gathuka.
Committee vice chairman Brighton Yegon put CMA to prove that they were not just mere conduit to siphon taxpayers’s millions.
“The amount of maize was supposed to be felt and we didn’t see it anywhere, it is clear that was political subsidy and a way to siphon to finance 2022 campigns,” the Konoin MP said.
But Paloma told the committee that their deal was above board, revealing that they supplied 5,264,073 (24kg) bales of flour totalling to 126,337,752 kgs into the market during the maize subsidy programme by all millers.
“Each miller entered into a binding and enforceable contract with the government through the Ministry of Agriculture. Article 3 of each individual miller’s contract specifically provided for pricing and calculation of the subsidy,” the CMA chief executive said.