Taxpayers will bear the burden of footing an extra Sh2.7 billion in accrued interest for failing to pay millers under a 2017 maize subsidy programme.
At the end of 2017, the State owed the processors Sh2.3 billion, an amount that ballooned to Sh5 billion as at this year in principal and interest amount.
The government has so far paid only Sh3 billion to five millers, with Sh2 billion being an outstanding amount for the remaining four.
The Ministry of Agriculture had contracted nine millers to import and sell maize to the State under the subsidy programme three years ago to lower the cost of flour that had hit a high of Sh150 for a two-kilo packet.
Agriculture PS Hamadi Boga said the requisition for the funds to clear the debt has been made with the National Treasury.
“We are waiting for exchequer (to release the funds) as the request was made last week,” said Prof Boga in an interview yesterday.Loading...
Millers argue that the delay in payment has had a huge financial implication on them as they had taken loans from banks to ship in the produce and as such are paying bank interest on that money.
The payments were to be completed at the end of 2017 when the contract with the State came to an end.
Millers were forced to move to court in 2019 to compel the government to pay them the outstanding cash, with the court ruling in their favour and even compelling the State to pay interest on that amount as well.
“We have been negotiating to no avail for the last two years. We are facing a serious financial challenge,” said a representative of the millers.
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