Chris Kirubi, Brand Kenya Chairman, during the Kenya Trade Week, warned that the retailers not paying their suppliers who are mostly small-scale, is posing a major threat to entrepreneurship growth in the country.
It also leads to unemployment, collapse of the small-scale suppliers’ businesses and a threat to innovation for the growing country.
The recently launched National Trade Policy by the Trade Principal Secretary Chris Kiptoo will enable the government to deal with retailers who don’t conform to their payment contracts with the suppliers. The policy will have access to trade information unfair competition in a bid to regulate the retail sector.
“Supermarkets have abused their power of distribution by exploiting small scale suppliers who don’t have enormous amounts of money to stay in business in the face of debts,” Kirubi said.
Infact supermarkets have been against the policy. The supermarkets have been operating on credit terms of approximately six months, which ends up affecting productivity of small-scale suppliers.
“This only benefits a few people but is a hindrance to farmers who grow cotton, hence stopping creation of employment for the local textile sector,” Kirubi said.
Kimani Rugendo, Chairman of , Association of Suppliers of Kenya, said that the retailers expand their businesses using money owed to suppliers instead of doing payments first for sold products hence, breaching the supplier-buyer contract.
Rugendo expressed faith in the new policy, with expectations that it will restore sanity in the retail sector as it seeks to maintain a level playing field for suppliers, farmers, manufacturers, service providers and innovators.
The policy involves a 15 days’ payout on fresh produce and a 30 to 45 days payout on other goods of which will help stabilize suppliers’ operations.
According to Kiptoo, a national trade facilitation committee has already been formed to implement the trade facilitation measures specified in the trade policy and in line with the WTO Trade Facilitation Agreement.
Additionally, a trade remedies law will be enacted to support the application of safeguarding, countervailing as well as antidumping measures in protection of Kenya’s domestic trade from unfair global trade practices.
Some of the supermarkets that are facing the wrath of the suppliers include Nakumatt and Uchumi, which have led to closing to some of their branches, and one being auctioned by TRM Mall along Thika Road.
Chris also called for a ban on secondhand clothing on claims that it’s a threat to the textile industry and does not grow the economy.
The ban on Mitumba clothing is still on a limbo, discussions are still going on.