Maize worth Sh9.2 billion is at risk of going to waste after the cash-strapped National Cereals and Produce Board (NCPB) ran out of funds to light storage silos and fumigate the grains.
The cash-crunch at NCPB has seen employees go without salaries for two months, paralysing essential services.
Crucial preservation processes such as fumigation have been halted for lack of funds to buy chemicals. Kenya Power has also disconnected electricity over pending bills.
“We are required to fumigate the grain after every two or three months, but lack of funds has seen the exercise halted and this might come at a high cost to taxpayers given that the four million bags in our stores are at risk of infestation,” said NCPB communications manager Titus Maiyo.
Loss of the maize could worsen a looming shortage of the Kenyan staple with the current supply estimated to be enough to last for just one month.
NCPB traces its current financial troubles to a diversion of money that was meant for its recurrent expenditure into buying fertiliser under the Access to Government Procurement Opportunities for special groups.
The boards of the Strategic Food Reserve (SFR) and the NCPB met on Thursday last week to seek a solution to the current crisis.
In an interview, Andrew Tuimor, the Chief Administrative Secretary in the Ministry of Agriculture, said the ministry is aware of the gravity of the situation.
NCPB acting managing director Zakayo Magara said he could not comment on the matter having been in office for only about one week.
“I have just assumed office and I cannot give a comprehensive comment now. However, it is common knowledge that things will go wrong for any business without money to administer,” said Mr Magara.
The Ministry of Agriculture and the SFR owe NCPB Sh16 billion for the services that the board has been rendering on behalf of the two entities, mainly handling of maize, procurement and distribution of subsidised fertiliser.
NCPB normally earns revenue by offering services, mainly for government, after its commercial wing of trading in grain was stopped over a decade ago.
The board has already exhausted its overdraft facility, having overshot the limit of Sh2 billion at its KCB account. It, therefore, cannot access more funds.
NCPB is meant to release three million bags of maize to millers to check the rising cost of flour that has so far hit Sh121 for a two-kilo packet from Sh90 in February.
The government agreed with millers two weeks ago to release at least three million bags of maize from the Strategic Food Reserve (SFR) at Sh2,300 to curb the rising cost of flour.
This is aimed at increasing supply of the grain in the market, which has been dwindling in recent weeks forcing the price up to Sh3,400 for a 90 kilo bag at the moment from Sh2,300 in February.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to email@example.com