• MPs have rejected payment of Sh2.5 billion to millers for last year's maize subsidy
• Azimio wants the Finance Bill to be scrapped and replaced with tax cuts and restored subsidies
The Agriculture committee of the National Assembly has just blocked payment of Sh2.5 billion for subsidy incurred by the Cereal Millers Association last year.
The MPs say that there is a variance in the amounts of money declared and that it is not clear whether the maize subsidy delivered value for money.
This is further proof that subsidies are inefficient and undesirable. Now large maize millers have sold maize at a subsidised price without ever receiving the subsidy – primarily because government cannot afford it.
At the same time, Azimio leader Raila Odinga is demanding the withdrawal of the Finance Bill and its replacement with economic measures including tax cuts and restoration of subsidies. This impossible demand would only increase the already huge budget deficit.
Raila points out that debt has risen somewhat since President Ruto took over last September but total debt rose massively from $12 billion to $70 billion (Sh9 trillion) between 2013 and 2023. We have to accept there was a huge spending spree under President Uhuru Kenyatta.
There is a fair claim to restrict tax rises in the Finance Bill. But it is neither feasible nor affordable to restore subsidies on food and fuel at this time.
Quote of the day: "If all mankind were to disappear, the world would regenerate back to the rich state of equilibrium that existed ten thousand years ago. If insects were to vanish, the environment would collapse into chaos."
E O Wilson
The American biologist was born on June 10, 1929