Top state agency officials grilled in Sh16.5bn food importation fiasco

Some top officials at the Kenya National Trading Corporation (KNTC) were on Tuesday grilled in a Sh16.5 billion food importation fiasco.

The officials who are directors at the KNTC were picked from their offices and taken to the Directorate of Criminal Investigation headquarters for grilling sessions.

Also grilled were managers of a bank that is said to have guaranteed the business. This followed reports taxpayers lost the money in the importation of maize, rice and sugar.

Officials said those grilled were also asked questions on the importation of Sh6 billion edible oil. The oil is stuck in government stores after being imported.

Sources at the DCI said the investigation team plans to escalate the probe up and further than KNTC.

They will later send their probe file to the Office of the Director of Public Prosecutions with recommendations on the same, officials said.

Ethics and Anti-Corruption Commission is also investigating the same saga and has asked for various documents on the importation process.

Already Members of Parliament are investigating the fiasco. The MPs have poked holes in the importation of sugar, maize and rice, even as it emerged that the country lost Sh16.5 billion due to tax waivers on the imports.

Lawmakers sitting in the Agriculture committee raised concerns with the duty-free import and the manner in which the suppliers were identified.

This was even as it emerged that the government lost more than Sh16.5 billion in revenue resulting from the importation of tax-free maize and rice.

Agriculture Cabinet Secretary Mithika Linturi, however, did not disclose the forgone revenue as a result of sugar importation into the country.

The amount could thus be higher factoring in the amount forgone as a result of duty-free on sugar imports.

Linturi told MPs that maize importation cost the state Sh3.3 billion, while rice was Sh13.2 billion.

“It is worth noting that there was revenue lost but it was foregone to safeguard Kenyans,” he said.

“Therefore, the revenue forgone resulting from maize importation was Sh3.296 billion, while [for] rice it was Sh13.166 billion totalling to Sh16.462 billion.”

The government last year approved the importation of duty-free sugar, rice and maize into the country to plug the food deficit and stabilise the high prices of food commodities.

Linturi attributed the deficit to the prolonged drought that led to poor harvests across the country.

The government also allowed a six-month duty-free importation window for traders to ship in 1.1 million metric tonnes of maize and 1.1 million metric tonnes of rice.

Linturi said a total of 156,957 metric tonnes of maize valued at Sh6.6 billion was imported between January and September while 707,107 metric tonnes of rice worth Sh37.6 billion was shipped into the country.

He further said that only 163,827 metric tonnes of sugar have been imported into the country since the duty-free importation window was opened.

Linturi was also at pains to explain how the suppliers were identified in the importation of the basic commodities.

MPs questioned the criteria the government applied to identify the suppliers who were engaged in the multibillion-shilling transactions.

Linturi admitted there was no procurement of the suppliers and that the ministry only invited interested bidders who were vetted and allowed to import.

“The ministry issued a public notice dated December 2022 inviting eligible millers and traders interested in importing the food commodities to submit their details for pre-qualification,” Linturi told the committee.

“A total of 461 applications were received out of which 186 did not meet the criteria for pre-qualification. 275 applicants were responsive and allowed to participate in the importation of food commodities.”

Nyando MP Jared Okelo further questioned why the sugar prices in the market did not fall despite the government bringing sugar into the country.

“The main reason why the government was involved in the waiver was to reduce the cost of the commodities, how much was sugar retailing before and after the imports?” the lawmaker said.

Linturi told the committee that the country has an annual sugar deficit of about 600,000 metric tonnes and relies on the Comesa region.