Consumer Price Index (CPI) data from the Kenya National Bureau of Statistics (KNBS) released on Wednesday showed that the government-sponsored maize flour subsidy had failed as the price of unga increased in the month of August.Â
According to the statistics that serves as the foundation for the announcement of the inflation print, the average price of loose maize flour in August was Ksh. 78.40, which represents a 4.7% increase from Ksh. 74.84 in July.
This is in opposition to the government’s recently announced unga subsidy scheme, which would have set the price of a one kilogram packet of unga at Ksh. 52 for the duration of the month until at least August 20.
The CPI data’s revelation of a higher price for unga reflects the chaotic results of the subsidy, which was initially disclosed in mid-July.
For instance, most Kenyans could hardly find the subsidised unga on the shelves as big supermarkets and shopkeepers both experienced serious supply shortages.
Since the majority of millers only provided premium brands to merchants, many customers bought unga at the previously unsubsidized prices.
Despite the fact that more than 70 millers, or 80% of the retail market for maize flour, signed up for the program, there were supply restrictions due to the unga.
On August 13, the Ministry of Agriculture announced the suspension of the subsidy program in an internal memo by Cabinet Secretary Peter Munya attributing the pause to inadequate funding from the National Treasury.
Despite the majority of Kenyans missing supplies of cheaper unga, the ministry said it had exhausted the entire Ksh.8 billion sum set aside for the program which had been expected to run until August 20.
The subsidy was expected to cover the difference from retailers selling unga at Ksh.100 for a two-kilogram packet and the previous prevailing market rate of over Ksh.200.
Retailers have since the suspension of the unga subsidy reverted to the previously higher maize flour costs.
