Members of Parliament have taken a firm stance against New Kenya Co-operatives Creameries (New KCC), urging the dairy processor to halt milk supplies to government agencies that have failed to settle their outstanding debts. The move comes as New KCC faces significant financial strain due to unpaid bills, with State House prominently listed among the debtors.
On Thursday, New KCC’s Managing Director Samuel Ichura and Cooperatives Principal Secretary Patrick Kilemi appeared before the National Assembly Committee on Trade, Industry, and Cooperatives. Their appearance aimed to address concerns about delayed payments to dairy and coffee farmers, a situation exacerbated by the debts owed by various government entities.
James Gakuya, Chairperson of the Committee and MP for Embakasi North, highlighted the gravity of the situation. According to Gakuya, New KCC is currently owed a staggering Ksh.184.3 million by several government agencies. Notably, State House owes the company Ksh.14.62 million, while the Office of the First Lady has an outstanding debt of Ksh.3.07 million.
The Ministry of Defence and the Administration Police Service have accumulated the largest debts, with the Ministry owing Ksh.49.49 million and the Administration Police Service Ksh.32.38 million. Other notable debtors include Kenyatta National Hospital (KNH), which owes Ksh.10.53 million, and the private wing of the facility with a debt of Ksh.4.45 million. Additionally, the National Security Intelligence Service has a Ksh.4 million debt, and the Nairobi Water and Sewerage Company owes Ksh.2.27 million.
In light of these figures, MP Gakuya has strongly criticized New KCC for continuing to supply milk to these entities. “New KCC is in business, and no one compels you to keep supplying milk to government agencies that still owe you money,” Gakuya stated. He added, “You cannot tell farmers that you can’t pay them because government bodies owe you.”
The financial predicament faced by New KCC has significant implications for the dairy sector and the farmers who depend on timely payments for their livelihood. The company’s struggle to meet its obligations to farmers is directly linked to the unpaid debts from these government agencies. The MPs’ call for New KCC to halt supplies to debtors underscores the urgency of resolving these financial discrepancies.
In response, Principal Secretary Kilemi acknowledged the difficulties faced by New KCC. He explained that the processor’s operational challenges are largely due to the debts owed by government agencies. “New KCC is failing to meet its obligations because of supporting government agencies. We need the help of this committee for the outstanding debt to be paid,” Kilemi said.
Despite the dire situation, Kilemi offered a glimmer of hope, assuring the committee that the situation is gradually improving. He committed to ensuring that the remaining payments are settled by the end of the month, signaling a potential resolution to the financial strain.
The MPs’ intervention reflects a growing concern about the financial health of key players in Kenya’s agricultural sector and the need for accountability in government transactions. As New KCC continues to navigate these challenges, the call for prompt settlement of debts highlights the broader issue of financial responsibility within government agencies and its impact on essential services.
This situation serves as a critical reminder of the importance of timely payments and financial management in sustaining vital sectors like agriculture, which is integral to the livelihoods of many Kenyans. The resolution of these debts will not only relieve New KCC but also restore confidence in the financial practices of government bodies.
