Editorials

EDITORIAL: Payments cap welcome

kiptoo

Trade principal secretary Chris Kiptoo. FILE PHOTO | NMG

In the past few years, the war between supermarkets and suppliers has been so fierce that the troubles of some retailers have been tied to non-payment that has now accumulated to billions of shillings.

Indeed, suppliers have been reduced to begging for the millions of shillings that supermarkets owe them even as their businesses struggle to stay afloat. One group of people who have suffered in the ensuing melee are farmers whose produce takes ages to be paid for while the shelf life of such goods is known.

It is safe to estimate that this dark alley of non-payment has significantly contributed to joblessness as it ultimately stifles the growth of both suppliers and the retailers.

This is the reason the Ministry of Trade’s draft rules requiring the retailers to pay within 30 days, down from the current maximum period of 240 days, is spot on. For it is unbelievable that suppliers are being made to wait for up to eight months to be paid.

No supplier can wait that long while they continue to supply the supermarkets. At some point they stop, hence the collapse of some key players in the industry.

It makes a lot of sense to cap payment for the green produce at 15 days and fast moving consumer goods at 30 days. We believe this is the right direction to take for the health of the entire sector. Although there are penalties for non-compliance, there should be tighter checks to rein in rogue retailers who will accumulate debts with abandon, penalties or none.