Brace for high Unga prices as over 10 maize millers shutdown
3 min read
Maize millers warn of high Unga prices after President Ruto's government fails to pay subsidy balance
Maize millers warn of high Unga prices after President Ruto’s government fails to pay subsidy balance.
Due to the government’s delays in reimbursing KSh 3 billion under the subsidy program put in place between July 23 and August 4, 2022, more than ten small and medium-sized mills have closed.
After taking the oath of office, President William Ruto canceled the subsidy program as he termed it unsustainable.
Maize millers have been left in limbo over cash-flow problems since the previous government failed to settle all their dues.
United Grain Millers Association (UGMA) chairman Ken Nyaga accused the government of failing to honour the part of the bargain after millers reduced the price of a 2kg packet to KSh 100.
“The sector has been shaken by delay in payment…it is a big impact and if it continues it will further be felt by the consumer,” Nyaga said.
Unga prices have since increased to surpass the KSh 200 mark again.
Ken Nyaga, warned that Kenyans could be forced to pay more for Unga as the millers were contemplating increasing prices in their recovery plan.
“Some have shut down, while some have slowed down on operations because they cannot afford to buy maize,” the Chairperson lamented.
“We are looking at a very hard time when we do not have money because this money is owned by the government expecting us to buy and bring the cost of flour down,” he added.
Nyaga noted that most millers were operating through loans and were now exposed to the risk of being auctioned by banks and other lenders.
In addition, the millers noted that the high prices of maize further complicated the situation in the Kenyan market as the country continued to grapple with acute prices.
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The millers cautioned that efforts to reduce the Unga prices would have to wait longer if the government did not de-escalate the situation.
In early March 2023, the National Assembly declined to approve payment of over Ksh2.9 billion arrears owed to the millers who took part in the subsidy programme, citing non-disclosure of the exact quantity of maize flour supplied.
However, a section of millers criticized the move and maintained that the supply records were audited by the Kenya Revenue Authority (KRA) to ascertain the quantity of Unga supplied in the three months.
The Members of Parliament, through the National Assembly Budget Appropriation Committee also questioned the non-disclosure of the retail stores used to supply the subsidized Unga to Kenyan consumers for the duration.
Consequently, the MPs asked the Auditor General to audit the records of the subsidy programme to shed more light on obscure records.
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