Battles rages for control of maize importation

The stakes around maize importation have always been high, but they could have just gone a notch higher.

Government agencies are now engaged in a fierce behind-the-scenes battle over which one of them should be in charge.

Meanwhile, the High Court early this month temporarily halted a government plan to import four million bags of maize over a dispute as to who should bring in the cereals, and reports that what the National Treasury ordered is substandard and poisonous.

At the centre of the high-stakes game is the speed with which National Treasury Cabinet Secretary Ukur Yatani moved to disband the Strategic Food Reserve Trust Fund (SFRTF) without reference to the National Assembly. The matter is before court.

Who will take over the Sh10 billion the Fund has in its bank accounts, as well as its functions, assets and liabilities is another point of contention.

In March, Cabinet directed that SFRTF be wound up within six months. To do this, Section 24(8) of the Public Finance Management Act, 2012 requires that the Treasury Cabinet Secretary must get the approval of the National Assembly.

However, on April 14, Mr Yatani published in the Kenya Gazette the notice of revocation of the Public Finance Management (Strategic Food Reserve Trust Fund) Regulations, 2015. The Fund was set up by these regulations, the revocation meant the Fund ceased to exist.

The Fund would have been the one to take charge of the emergency importation of maize to avert a possible food crisis in the wake of the Covid-19 pandemic.

DUTY-FREE

On April 20, with the Fund out of the way, Mr Yatani published another gazette notice on the importation of maize at a concessional rate “in consequence of the declaration of coronavirus as a formidable epidemic disease in Kenya”.

The maize was to be imported by 44 private millers at a concessional import duty rate of 14 percent for white maize and 10 percent for yellow maize.

Since intended importation was for an emergency, Section 114(2) of the East African Community Customs Management Act (EACCM) that the CS used to authorise importation provides that no duty should be charged on relief goods.

The importation also needs to be done by a government agency or a charitable organisation duly appointed by the government, not commercial entities.

In challenging the government’s plan to import maize, activist Okiya Omtatah argues the CS authorised importation of dry maize that does not meet the EAC's standards.

For instance, the East African Standard, which has been adopted by the Kenya Bureau of Standards (Kebs), provides that maximum permissible levels of aflatoxin are 10 parts per billion, but the gazette notice indicated 10 parts per million, which would be 1,000 times higher.

MISCHIEF TO REIGN

The activist said that unless the specifications are tailored for maize already at the port of Mombasa or on the high seas, the 41-day importation period (April 20 and May 30) is too short if the logistics of sourcing, buying, inspecting and transporting the maize from Mexico are considered.

Following Mr Omtatah’s petition, Mr Yatani on May 15 issued another notice revoking the April 20 notice. In the new notice, the aflatoxin and moisture content requirements now meet the East African Standard.

Curiously though, instead of the start and end date for importation, the new gazette notice only gives the deadline of July 31 and no start date, which could open the way for mischief as any maize in the country could be considered to have been imported under the concessional rates.

Meanwhile, despite Mr Yatani having gazetted the disbandment of SFRTF, the National Assembly recently set aside Sh7.8 billion for acquisition of strategic stocks.

The Sh7.8 billion is part of Sh10.47 billion Parliament passed in the Supplementary budget for job evaluation for staff of Bukura Agricultural College, and funds for combating the desert locust infestation.

PENDING BILLS

Before the disbandment of the Fund, there were ongoing, behind-the-scenes efforts to return the functions to the National Cereals and Produce Board (NCPB), a move that reportedly has the support of the Ministry of Agriculture.

A source at SFRTF told Sunday Nation that the genesis of their problems with the Agriculture ministry was when they turned down a request to use part of the Sh10 billion cash to pay off NCPB’s pending bills. “As a board, we refused because we would be breaking the law,” the source said.

NCPB and SFRTF have been engaged in claims and counter claims, with each accusing the other of owing it billions in fees.

Before the recent directive to disband the Fund, a Cabinet memorandum of November 20, 2019 had recommended that it be turned into a corporate body.