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Kenya Meat Commission loses Sh1.2 billion as State shies away from ‘sacred cows’

BUSINESS
By Juma Kwayera | August 18th 2013

By Juma Kwayera

Kenya: Senior managers at the Kenya Meat Commission (KMC) are on the spot following a new Government audit team’s revelations that the multi-billion shilling facility has been seriously crippled through financial mismanagement.

The report by the Inspectorate of State Corporations was tabled at a Cabinet meeting last week upon which the contents of the report revealed KMC was operating at a huge loss and was heavily indebted.

The collapse of KMC, ten years after it was revived has far-reaching implications for the economic wellbeing of nearly 15 million people in arid and semi arid land who depend on pastoralism and livestock in arguably the country’s most marginalised regions.

Leaders from the pastoralist communities occupy strategic positions in the Jubilee Government, a fact that is expected to have a bearing on how the executive will handle the matter. Already, the Ethics and Anti-Corruption Commission and cabinet secretaries for Agriculture, Devolution, National Treasury and Office of the Deputy President are reportedly acting on the issue that is potentially politically explosive.

As at March 9, when the probe was ordered by former President Mwai Kibaki, the report says, the commission had made losses in excess of Sh1.2 billion, inclusive of Sh600 million the Government injected in the firm that was revived to resuscitate the economic potential of erstwhile marginalised Kenya’s arid and semi arid lands.

To hoist KMC back into business from insolvency, Kibaki administration ploughed nearly Sh3 billion into the plant and created more than 800 jobs, besides establishing a market from livestock.

The audit led by Acting Director-General of the Inspectorate of State Corporations Edward M Ngigi, the report accuses the KMC Managing Director Ibrahim Haji Isaak of serious financial impropriety and breaches of procurement of raw material. “This is attributable to acute liquidity problems that the commission experiencing thereby making it unable to procure enough livestock for the slaughter,” the report now with the president and deputy president says.

Revive industries

When it took power in 2002 the National Rainbow Coalition Government undertook to revive industries that had been rundown by its predecessor, Kanu. The Kenya Meat Commission and Kenya Cooperative Creameries (KCC) were flagship projects of target the pastoralist communities in northern and northeastern Kenya. 

Like KMC, KCC, which received Sh800 million capitalisation to jumpstart iiswww operations after the 2002 polls, is also technically insolvent teetering on the brink of collapse. The arid and semi arid regions account for 78 per cent of the meat consumed in the country and nearly 100 of per cent of what is exported in addition to the livestock that feeds the meat market in Saudi Arabia and other Middle East countries.

More significantly, President Kibaki sought to mitigate the perennial drought and acute food shortages in a region that host slight over 25 per cent of the population and about 60 per cent the landmass. The Government even created two ministries – Northern Kenya and Livestock – specifically for arid regions and appointed Dr Mohammed Kuti Livestock Minister and Dr Ibrahim Elmi Mohamed Northern Kenya Minister.

 The oversight of KMC was handed to pastoralist communities, from which Dr Kuti, Dr Elmi and Dr Isaak. The report demonstrates that rather than be the fulcrum of economic development in arid regions, KMC whetted the financial appetites of those bestowed the mandate to turn around the lucrative livestock industry.

It was alleged that on several such instances, Dr Isaak transferred Sh15.6 million from KMC account held at Kenya Commercial Bank, Kitengela to his personal account 1125008695 held at the same bank’s Garissa branch to pay for livestock at a market in Garissa.

The Sh15.6 million was besides another Sh11.5 million he withdrew from KMC account (0999241802) at First Community Bank without a cheque, but was authorised by the bank with remarks in the bank statement which indicating ‘cheque forgotten’. 

Another withdrawal of Sh3 million was allegedly made by another KMC officer who used her identity card to withdraw the money for the Dr Isaak to go and pay for livestock because he had forgotten his identification card. The report further takes a swipe at the chief executive for behaving like a hawker, which it says: “relegated him to low level of an operative, but whose sole scheme was to defraud KMC”.

 


 

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