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Murang’a Dairy Farmers To Get Sh5 Subsidy For Every Litre Of Milk

by Radarr Africa
written by Radarr Africa

Murang’a County will give farmers Sh5 per liter of milk as an incentive meant to increase the county’s production of milk from the current 600,000 liters per day to 1 million liters in the new electronic voucher based subsidy policy.

 The county director of livestock production, Peter Nyamora, speaking at a public participation forum on County Integrated Development Projects, stated that the dairy farmers will be required to sell their milk through a cooperative in order to benefit from this policy.

“The registered cooperatives must be professionally managed and will be subjected to regular audits by the county in order to avoid cases of fraud,” he said.

The director said that the county statistics put the cost of production per liter of milk at between Sh27 and Sh.32 while the farmers sell the milk at between Sh33- 42. “The subsidy policy will ensure that every farmer gets a minimum of five shillings in profits per liter of milk,” Nyamora said.

The money is meant to go into purchasing farm inputs and reduce the strain on the farmers as the current prices of various inputs have been eating into most of their profits.

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The county initiative, meant to motivate farmers by making dairy farming more lucrative and protect them from incurring any losses is part of Murang’a governor Irungu Kang’ata’s campaign promises.

The county will start by conducting a baseline survey or registration, where all the eligible farmers will be factored into the database. All farmers selling milk through cooperatives will be eligible for this subsidy programme

The initiative, which also targets to give a similar amount for every kilogram of mangoes, will be separated into different funds for milk and another for mangoes.

The new policy targets milk and mangoes in a bid to equalise the much wetter dairy farming zones, with the dryer regions of the county.

Quality control officers from the county will be required to assess the quality of the produce so that farmers do not take advantage of the programme and deliver substandard products.

Meanwhile, the department of health also presented to the public a policy known as the Social Health Security Fund which aims to register vulnerable families in the county into the National Health Insurance Fund (NHIF) so as to improve access to healthcare.

According to the county department of health, there are 93,161 households paying for their NHIF contribution and another 20000 households under the National Government’s Universal Health Coverage. This accounts for 29 percent of the 385000 households in the county and the proposed Social Health Security Fund will increase coverage.

 The health fund will also offer cash stipends to pregnant women and new mothers in a bid to improve maternal and child health by encouraging mothers to visit health facilities for prenatal care.

SOURCE: Capital business

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Eastern AfricaEconomyEnergyOil & Gas

Fuel subsidy hits Sh71bn in six month in Kenya

by Radarr Africa
written by Radarr Africa

Kenya has spent Sh71.17 billion to subsidize diesel, super and kerosene in the six months to June, highlighting the burden of the fuel stabilization scheme on the national budget.

Consumption data from Energy and Petroleum Regulatory Authority (Epra) shows Kenya has spent an average of Sh11.86 billion monthly to keep fuel prices low for six months to June. While Kenya collects Sh5.40 a litre from motorists for the subsidy fund, the sharp rally in crude oil prices has forced the government to dip into taxes to ease public outrage over the high cost of living.

The World Bank says the monthly expenditure on the programme that started in April continues to hurt the budget and planning, signalling its intention to push for the scrapping of the subsidy.

The International Monetary Fund (IMF) has set a fresh loan condition requiring Kenya to drop the fuel subsidy programme by October, exposing motorists to a sharp rise in pump prices. Without the subsidy, motorists would have paid a historic high of Sh214.03 per litre of petrol and Sh206.17 for diesel in what could have stoked pressure on inflation.

The subsidy has, however, failed to stem inflation now at 8.3 percent outside the government’s preferred band of 2.5-7.5 percent on soaring food prices. The government has promised to keep the subsidy to the end of the year despite pressure from the Bretton Woods institution. “In terms of the subsidy programme, there was a commitment given by His Excellency the President and the CS that the government will look at continuing to offer a safety net to Kenyans,” said Epra director-general Daniel Kiptoo last month.

Diesel accounted for the largest share of the subsidy at Sh45.7 billion, followed by super petrol (Sh23.3 billion) and Sh1.9 billion for kerosene in the six months.

The costs of energy and transport have a significant weighting in the basket of goods and services, which measures inflation in the country. Producers of services such as electricity and manufactured goods are also expected to factor in the higher cost of petroleum.

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The economy also uses diesel for transportation, power generation and running of agricultural machinery such as tractors, with a direct impact on the cost of farm produce. Kenya’s inflation climbed to a 61-month high in July at 8.3 percent from 7.9 percent, squeezing household budgets and demand for goods and services.

The World Bank and the IMF have gained a bigger say in government policy after Kenya turned to the multilateral institutions for concessional loans in the wake of the Covid-19 pandemic ravaging the revenues and limiting the country’s access to the commercial loans market. A jump in the current pump prices would have stoked public anger in the first month in office for President Uhuru Kenyatta’s successor.

After a fiercely fought presidential election race, Deputy President William Ruto won 50.5 per cent of the vote against opposition leader Raila Odinga’s 48.8 percent, according to results declared by the electoral commission’s chairman, Wafula Chebukati.

Mr Odinga rejected the results, signalling another Supreme Court battle starting Monday. Whoever takes office will have to steer a pandemic-battered economy, rising food and fuel prices spurred by the war in Ukraine, the worst drought in four decades and soaring public debt.

He also needs to decide on whether to maintain the fuel subsidy. Kenya last week dropped a maize flour subsidy that had halved the cost of the staple food.

SOURCE: BUSINESS DAILY

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EconomyWestern Africa

President Buhari speaks on Nigeria’ fuel subsidy

by Radarr Africa
written by Radarr Africa

President Muhammadu Buhari has risen to the defense of the Central Bank of Nigeria’s monetary policy actions despite the inflation rate at 17.7% and the Naira continuing to plunge in the black market.

The president disclosed this in an interview with Bloomberg, where he expressed confidence in the apex bank’s ability to tackle Nigeria’s economic problems and also gave a reason for not removing fuel subsidy as earlier planned.

This comes after the World Bank released a report stating that the multiple exchange rates, trade restrictions, and the financing of the public deficit continue to damage the business environment. The Bank also, stated that the CBN’s low-interest loans undermines commercial banks that lend on a risk-adjusted pricing basis and needs to be dialled down

What President Buhari is saying

When asked why he refused to heeded the call by the World Bank and IMF to remove the fuel subsidy and to unify the exchange rate. President Muhammadu Buhari said “most western countries are today implementing fuel subsidies. Why would we remove ours now? What is good for the goose is good for the gander!”

“What our western allies are learning the hard way is what looks good on paper and the human consequences are two different things. My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable. Boosting internal production for refined products shall also help,” he added

The president showed optimism around forthcoming projects and stated that Nigeria’s exchange rate was able to handle shocks.

He said “Capacity is due to step up markedly later this year and next, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) come on board. The exchange rate is still susceptible to external shocks that can suddenly and severely affect Nigerian citizens. As we step up domestic production – both in fuel (enabled by PIA) and food (agricultural policies) – the inflationary threat shall diminish, and we can move toward unification.”

When asked if he was concerned about the debate around the central bank’s independence following the governor showing interest in running for president. he said, “The CBN governor is appointed by the President. But this appointment is subject to confirmation by the Nigerian Senate. Ultimately, it will be for the CBN’s board of directors to determine whether a CBN governor’s actions have fallen foul of the laws in place to ensure he can most effectively carry out his duties.

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“But there is a subtext to the accusations. Because the governor follows a model outside of the economic orthodoxy, he is labelled political. But the orthodoxy has proved wrong time and again.”

The president said Emefiele is following an alternative economic model, which Nigeria should be free to adopt.

He said, “Instead, the governor is following an alternative economic model that puts people at the heart of policy. Nigeria should be free to choose its development model and how to construct our economy, so it functions for Nigerians.”

What you should know

  • Nigeria’s inflation rose to its highest level in 11 months, rising from 16.82% recorded in April 2022 to 17.71%. This is according to the recently released Consumer Price Index report, released by the National Bureau of Statistics (NBS).
  • The food index rose by 19.5% year-on-year in May 2022, representing a 1.13% points uptick compared to 18.37% recorded in the previous month and 2.78% decline compared to the corresponding period of 2021 (22.28%).
  • The exchange rate at the parallel market remained stable on Monday growing slightly stronger, having closed at N606/$1, from N607/$1 recorded as of the close of trading activities last week on Friday. This is according to information from BDC operators.
  • The World Bank has stated that the CBN’s multiple exchange rates, trade restrictions, and the financing of the public deficit continue to damage the business environment
  • The World Bank also  stated that the CBN’s low-interest loans undermines commercial banks that lend on a risk-adjusted pricing basis and needs to be dialled down
  • Further, Nigeria’s external reserves are expected to decline as the Central Bank of Nigeria (CBN) is expected to clear $1.7 billion worth of FX backlog and FX forward contracts to foreigners by the end-October 2022.

Source: Nairametrics

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