750,000 bags of maize valued at Sh1.8 billion went bad at the National Cereals and Produce Board (NCPB).
This has once again put the board on spot.
Details have it that the maize was ruined after the board ignored warnings from store managers that the insecticide they were using was ineffective because the pests were resistant to it.
A report from Auditor-general Edward Ouko says this is a case where better management would have spared taxpayers the loss. In the report, Mr Ouko also shows that Sh4.5 billion said to have been used to import the maize last year cannot be verified as the management could not provide payment vouchers.
This brings to Sh10 billion the money that cannot be properly accounted for at NCPB. Before the weevils, Sh1.9 billion that was meant to pay farmers had ended up in the pockets of brokers. Another Sh2.1 billion worth of fertiliser that was to be distributed to farmers cannot also be accounted for.
Mr Ouko in the report for the year ended June, 2017 pointed out that NCPB failed to produce payment vouchers of five suppliers who brought in maize during the importation period.
The suppliers are M/s Exporting, Hydery Limited, Kitui Mills Limited, Mombasa Maize millers and Pembe Flour Mills.
M/s Export suppliers won three tenders, Hydery Limited four, while Kitui Mills, Mombasa maize millers and Pembe Mills each won one.
“Consequently, the propriety of the expenditure totalling Sh4.49 billion cannot be ascertained,” Mr Ouko says in the report tabled in the National Assembly on Wednesday.
NCPB is now stuck with maize that it cannot sell to processors, explaining why more stocks might go to waste.
Appearing before a committee of the Senate that is probing the crisis in the maize sector on Wednesday, Agriculture CS Mwangi Kiunjuri said the State procured the maize at a high cost.
“We are unable to sell the maize because nobody wants to buy it,” Mr Kiunjuri said.
According to him, NCPB is selling the maize at Sh2,300 per 90kg bag after importing it at Sh3,600 per bag, a loss of more than 36 per cent. Farmers, in the meantime, are selling fresh stock at between Sh1,500 and Sh1,800.
The board of the Strategic Food Reserve (SFR) will make a decision on the price and take it to the Cabinet for approval.
Bungoma senator Moses Wetangula questioned the decision to open up the importation of maize where millers and traders sold maize to NCPB at astronomical price.
“It does not make economic sense for NCPB to buy maize at Sh3,600 and sell it at almost half the buying price. Why should the government incur loses?” he posed.
NCPB Acting Managing Director Alvin Sang told one of the local dailies that most of the allegations levelled against the board do not relate to them directly, saying the SFR is responsible for everything.
“All the decisions of buying or importing maize and even payment is done by SFR. NCPB is just being instructed to do this and that and when we pay, we do so on behalf of SFR. We only store maize and release when instructed by SFR,” Mr Sang said.
Mr Sang, who is only three months old in office, said most of the rot at NCPB happened before he was hired.
He noted that even at the moment, the country is set to dispose of 1.2 million bags of maize, which have begun to yellow at the silos. “I have written so many letters to SFR so that I can be given money to release the maize from the stores but up-to-date, I have not received a single cent,” Mr Sang said.
He said the current board is also new with the chairman having been appointed in January and other board members joining two months ago.