In Summary

  • Cheap maize is unlikely to last more than a few weeks and certainly not beyond the August General Election.

  • It will also create a secondary market where politicians, their families and business associates buy up the bulk of subsidised flour and hold to unleash for superprofits when the prices go up, or re-export to neighbouring countries where the wholesale and retail price are still much higher than the subsidised product in Kenya.

he government’s response to public anger over the skyrocketing price of basic food will no doubt offer much-needed respite in an election season.

With the Opposition just about to push its “Unga Revolution” campaign over the scarcity and rising cost of maize flour, the government moved speedily to unveil a subsidy programme that in one day reduced the price of a 2kg packet of flour to Sh90 from a record high of Sh140.

The Sh6 billion subsidy announced by Agriculture Cabinet Secretary Willy Bett should be a big relief to increasingly restive citizens buffeted from all sides by empty market shelves and sudden and drastic increases in the prices of basics such as maize flour, milk, rice and sugar.

It was also a big relief for the Jubilee administration of President Uhuru Kenyatta, who was looking at the prospects of going into a re-election campaign while his main opponent, Raila Odinga of the National Super Alliance, was licking his lips at the opportunity presented to exploit growing voter disenchantment over the rising cost of living.

The sudden arrival of cheap flour should assuage public discontent, while taking the wind out of opposition sails.

It should also divert attention from a growing public debate on whether incompetence and corruption in government had created an artificial shortage while politically connected commodity traders were waiting in the wings to reap a windfall the moment tax-free imports landed.

FIVE DAYS

Indeed, before the announcement on subsidised flour, the big debate everywhere was how a ship carrying maize imported from Mexico docked at the port of Mombasa just five days after a Kenya Gazette notice lifted import duty on the commodity.

The general assumption was that powerful people in government with advance knowledge of a coming tax waiver already had shipments in the high seas.

The government was running around in circles, with a series of contradictory explanations from different Cabinet secretaries, serving only to muddy the waters further.

Then came the big announcement from Mr Bett, posing with packets of the maize flour with government branding and price tags.

SLOW INTERVENTION

Citizens who had borne the brunt of the shortages and rising prices of Kenya’s staple food no doubt welcomed the availability of affordable flour, and couldn’t care less about the politics and the economics of it all.

However, the intervention masked a much more serious problem.

Page 1 of 2