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Kenya, Uganda told to resolve Uchumi pay standoff with suppliers

Uchumi supermarket in Uganda before it was shut. FILE PHOTO | NMG
Uchumi supermarket in Uganda before it was shut. FILE PHOTO | NMG 

Kenya and Uganda have been directed by the East African Community (EAC) to resume talks in a dispute arising from Uchumi Supermarkets’ #ticker:UCHM failure to pay suppliers.

Uchumi exited Uganda in October 2015, closing five branches, and leaving 800 employees and suppliers demanding payments.

Uganda subsequently initiated bilateral talks with Kenya to resolve the issue but Kenya, last year, pulled out saying that the issue was of commercial rather than national importance.

An EAC sectoral council on Trade, Industry, Finance and Investment has, however, directed the two countries to resume talks after Uganda broached the matter at the regional bloc.

“The sectoral council…urged Partner States to undertake bilateral consultations to deal with the said case by 30th June 2017 and report back to the next meeting,” a report from the council states.

Uganda holds that Uchumi’s exit had adverse effects on small businesses and asked the EAC to develop mechanisms to deal with the risks associated with cross-border investment.

Uchumi’s chief executive, Julius Kipng’etich, declined to comment on the directive rather saying that are still “discussions going on behind the scenes”, and that he wants to resolve the dispute amicably.

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