The Kenya Association of Manufacturers (KAM) in partnership with Suppliers Association of Kenya and Retail Trade Association of Kenya (Retrak) presented a report to Dr Chris Kiptoo, PS Trade, highlighting current challenges and solutions of the retail sector. The report, dubbed the Prompt Payment report, documents supplier payment challenges the sector is facing.
Manufacturers and suppliers had previously communicated their unease about the setback in payments by retailers, and with about 40 billion unpaid to them, they were seeking assistance to manage the issue.
KAM Chairperson Flora Mutahi said that manufacturers contribute about 20% to Kenya’s GDP, and with the current state of delayed payments, manufactures are asking “why should I manufacture when I am not getting paid?”
The CEO of Suppliers Association of Kenya, Ishmael Bett added that, “The challenge for suppliers has been in trying to understand why there are cash flow issues, whereas goods in the supermarket are bought in cash.”
Dr Kiptoo emphasized the position of a government as a regulator to ensure that all involved in the sector are on a level playing field. The idea of having a strong regulator such as the government to enforce prompt payment within the retail sector was welcomed with open arms.
The Ministry of Industry, Trade & Cooperatives has promised to apply International Best Practice to the development of the code to guide the sector and constitute a tribunal to handle disputes within the sector. The task force will further select a board to ensure that the code is adhered to. The report will be presented to the Cabinet Secretary for further consultation and approval.