Retailers including major supermarkets in Kenya are complying with the rules of the newly introduced Sifted Maize Flour Subsidy Programme, with 2Kg packets going for Ksh100 down from Ksh230. They are, however, also dealing with the matter of unsold stock they purchased at much higher rates before the subsidy officially took effect on July 20.
The Retail Trade Association of Kenya (RETRAK), the umbrella body representing all formal retailers in Kenya, noted that it was engaging maize meal suppliers to recover over Ksh175 million – the value of the unsold stock based on their analysis.
“While the new price tags are affixed, our analysis indicates that as of the close of business on July 20, 2022, retailers affiliated with RETRAK were holding unsold stocks amounting to more than 750 tonnes. Consequently, we have commenced engagements with the respective maize meal suppliers to recover more than Ksh175 million, which is a cumulative estimate of the higher price earlier paid to them to facilitate deliveries,” RETRAK CEO Wambui Mbarire noted in a statement.
She observed that for fast-moving goods such as unga, retailers pay in advance or on short-term credit not exceeding 14 days.
The body has pledged compliance with the directives under the subsidy intended to cushion Kenyans from the high cost of living. The subsidy program includes provisions for market surveillance officers to monitor retail prices of maize flour and stiff penalties for non-compliant retailers.
“Already, our membership has been duly advised on the particulars of the directive, and compliance efforts to ensure the sale of maize meal (Unga) at Ksh100 with immediate effect are now underway,” Mbarire stated.
The subsidy programme is set to be in place for a four-week period. By the time it lapses, President Uhuru Kenyatta’s second term will also be done.
The cost of living has been a key political talking point ahead of the polls in August. Both DP William Ruto and former PM Raila Odinga, the main contenders for President, have vowed to bring down the cost of living if elected.
Annual inflation accelerated to 7.9% in June, the highest level since August 2017, from 7.1% in April.