The Government should stop extending subsidy on maize flour as it does not benefit the targeted tens of millions of poor people. Its objectives have hardly been met since inception.
An additional Sh3.7 bn released by Treasury confirms our fears that government is keen to address symptoms rather than real causes of the current maize shortage crisis.
We hold that the government move is unsustainable and an expensive experiment doomed to fail. This is because the subsidy is benefitting cartels within and outside government.
Supermarkets are reluctant to sell the subsidized maize flour as it takes more shelf space and yet it offers them comparatively low margins.
On the other hand, unscrupulous business people are re-packaging the subsidized flour to rake in whooping margins of over Sh30 per 2kg packet. This is perhaps one of the major threats to the program and for which no effective enforcement mechanism is feasible.
This situation is complicated by the fact that the government has not been generous with informing on tracking the disbursement of the maize flour by retailers, regions as well as respective quantities.
Hoarding and or repackaging the subsidized flour has occasioned artificial shortages making the commodity to be reliably accessed only via black markets.
Government must now admit that its’ expensive subsidy program on maize flour has flopped. Consequently, it must step back and allow for market forces of supply and demand to help lower the cost of the staple food.
There is no need putting more good money after bad money when the subsidized flour is either consistently unavailable and or yet to be sighted in many rural places.
What is most unconvincing is last week’s move by Agriculture Secretary Mr Willy Bett to set up a taskforce to reportedly advise him on the failed subsidy program. Mr Bett should disband the taskforce to avoid duplicity and potential waste of public resources.
The government must get the basics right on maize flour. It must stop treating the program as a political campaign tool. It should instead enhance the price offering in order to mop up maize from the local market.
Further, there is need for transparency and accountability around the stocks within the strategic grain reserves as well as disbursements. The public need to track the movements – in and out of the reserves.
Major millers should not be allowed to dictate terms for government on expensive imports. Smaller millers ought to get their rightful shares of the commodity.
Government ought to stop the price fixing and then enhance supply of maize to all millers.
Until then, not even hefty fines and or attempts to stem panic purchases will succeed.