The subsidised Sh90 maize flour will be discontinued mid this month after Treasury allocated an additional Sh3 billion to cover maize import costs from August.
The new allocation brings the total amount so far spent to cushion consumers from high flour prices to Sh6.7 billion.
The government had earlier allocated Sh3 billion to lower the price of a 90 kg bag of maize to Sh2,300 from above Sh4,000, offering importers a rebate of about Sh1,700.
Treasury secretary Henry Rotich Wednesday told MPs while reviewing the supplementary budget that the subsidy plan will end in weeks with expectations that millers will have access to fresh maize harvests.
“We have extended subsidy programme to mid-October, therefore, requiring additional resources to continue the subsidy that was expected to have ended in August,” Mr Rotich told the ad hoc committee on supplementary budget.
The additional cash in the mini-budget will cover imports brought into the country between August and mid-October.
READ: Maize farmers say flour subsidy to destabilise market
Drought and poor planning
Kenya on May 16 announced Sh6 billion subsidy on maize imports to help lower the cost of flour which had shot up due to a regional drought and poor planning.
This was expected to keep the cost of the 2-kg packet of flour at Sh90 from a high of Sh153 in April, turning it into a political headache for President Uhuru Kenyatta as he sought a second term in the nullified August elections.
The subsidised flour price was backed by a Kenya Gazette notice that criminalised the sale of product above Sh90.
Those found selling the two-kilo packet of subsidised maize flour above Sh90 risk a fine of Sh1 million or a five-year jail term.
http://www.nation.co.ke/business/Sh90-maize-flour-ends-mid-October/996-4126078-tlsp8sz/index.html