State yet to pay millers Sh4bn in maize plan – Business Daily
A young man carries bales of Maize flour from a lorry making a delivery to a shop in Mukuru Kwa Njenga slums on June 23, 2022. PHOTO | FRANCIS NDERITU | NMG
The amount of money that the State owes millers has grown to Sh4 billion after it emerged that the government has only paid half of what was supplied under the maize subsidy programme.
The subsidy ended a fortnight ago and the command centre closed on Friday, leaving millers with a Sh4 billion hole.
Millers say the budget as per the earlier agreement with the government was Sh8 billion but was cut by half.
“Nearly Sh4 billion is still outstanding, total funding required for the subsidy was Sh8 billion but only Sh4 billion was funded in the account,” said Rajan Shah, the chief executive of Capwell Industries.
The outstanding balance has left millers with a deficit in their working capital at a time when processors are grappling with the high cost of procuring maize.
Atin Aggarwal, chief executive of Trident millers said they are still having a couple of invoices that are yet to be paid.
“We have been paid partly and we are still waiting for more payment on the pending invoices,” said Mr Aggarwal.
Some millers have pointed out that the slow processing of payment had an impact on the production of flour, which occasioned a reduction in the production of flour.
“When our capital is tied up, then we cannot produce flour at full capacity because we needed that money to replenish the stocks of raw material,” said a miller.
The government opened an Escrow account to give millers assurance that they will be paid their money on time after supplies are made, to avoid the recurrence of what happened in 2017 when the government failed to pay processors on time during a similar programme.
Agriculture PS Francis Owino had in July confirmed that Sh4 billion had been deposited to the Escrow account days after the subsidy programme had been rolled out.
At least 190 millers out of 320 in the country were enrolled in the subsidy programme that runs for one month.
The subsidy programme was started to ease the price of flour which had shot to a historic high of Sh210 in July on the back of a shortage of maize in the country.
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