Edible oil importation added little flavour to cost of living
The Kenyan government’s Ksh 14.4 billion edible oil program failed to impact prices, according to Auditor General Nancy Gathungu. The Kenya National Trading Corporation (KNTC), tasked with procuring and selling the oil, is accused of mismanagement, resulting in a loss of up to Ksh 1 billion. Despite procuring 2.8 million 20-litre jerrycans, only 2.5 million were delivered, with 808,000 still uncleared. The program’s intervention didn’t notably reduce oil prices, which fluctuated rather than decreasing consistently. The KNTC’s poor execution led to only Ksh 2.4 billion in sales, against the program’s total cost.
The edible oil programme initiated by the government to bring down the cost of the commodities in the country did not have any impact on the prices despite the government pumping Ksh 14.4 billion into the programme.
Auditor General Nancy Gathungu has accused the Kenya National Trading Corporation (KNTC), which procured the oils alongside other products to subsequently sell to Kenyans at cheaper prices, of bungling the entire deal despite spending billion shillings in the project.
The report which has recommended that the investigating agencies conclude their investigations and persons and entities found culpable for the loss of the public funds be prosecuted has also indicted the corporation for making losses of up to 1 billion.
In the deal the government was to procure 7.5 million of 20 litre jerrycans of edible oil but ended up procuring 2,807,806 of 20-litre jerry cans of cooking oil despite the quantities being approved under the programme.
Out of the 2,807,806 20 litre jerry cans only 2,518,434 of 20 litre jerry cans were delivered at both the Port of Mombasa and the Internal Container Depot (ICD) depot by the various contracted suppliers.
The report notes that at the moment, 603 containers said to comprise 807, 864 20-litre jerry cans were still uncleared at the Container Freight Service (CFS) in Mombasa and Auto Port CFS in Nairobi.
“From the analysis, the sale of the cooking oil by the corporation might not have significantly achieved the intended goal of price reduction of the cooking oil in the market,” reads the report in part.
In a special audit report tabled in the National Assembly, Gathungu noted that despite KNTC being approved by the National Treasury Cabinet Secretary to procure cooking oil and other essential commodities, being exempted from paying duty in cooking oil with effect from January 20, 2023, data from the Kenya National Bureau of Statistics (KNBS) indicated that as at November 2022 when the corporation’s mandate was expanded to allow the importation of bulk commodities oil into the country, cooking edible oil retailed at Sh 344.51 per litre while in December 2023 the prices were Sh 32837 a litre which was a decrease of about Sh 16.14.
The report notes that an analysis of the data indicated that there was fluctuation in prices during the period under review, an indication that the oil did not have any impact on the prices.
For instance, the report says that the process went down from Sh 344.51 in November 2022 to Sh 319.85 in April 2023, then in May 2023 the price increased to Sh 321.60 and thereafter reduced to Sh 315.01 which indicated that the KNTC intervention did not work.
“From the analysis above, the reduction of prices of cooking oil in the market during the period of November 2022 to December 2023 could not be directly attributed to the sale of the imported duty-free cooking oil by the corporation. This was due to the fact that the market prices for cooking oil were recorded to have reduced from Ksh 344.51 in November 2022 to Ksh 319.85 in April 2023, prior to the receipts and sales of the first consignment of cooking oil which occurred in the month of May 2023,” the report observes.
The report further claims that the program was not viable as a review of cooking oil receipts and sales data obtained from the corporation indicated that the first consignment of cooking oil was cleared and received in the warehouses in May 2023.
Further data on cooking oil shows that sales of the commodity began in May 2023 and by December 2023, out of the 1. 710,269,20-litre jerry cans that had been received in the ten warehouses, the corporation had sold 653, 174 20-litre jerrycans.
This clearly shows that the government only made a paltry Sh 2.4 billion despite the entire cost having been Sh 14.4 billion
The corporation, the report says made the highest sales of imported cooking oil in September 2023 and November 2023 amounting to Sh 156, 803 and Sh 261, 912 of 20-litre jerrycans respectively which clearly shows that the price of oils in August 2023 which is the month before the sales were Sh 315.01.
In September and November 2023, the report shows that the oil prices increased to Sh 316.94 and Sh 326.54 respectively.
Despite the low sales, Gathungu further raised concerns over the total sales banked as they amounted to Sh 2.6 billion as opposed to the initial sales of Sh 2.4 billion resulting to unexplained excess sales de .
Source Link : https://peopledaily.digital/edible-oil-importation-added-little-flavour-to-cost-of-living/
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