Kenya’s retail sector is experiencing a turbulent period that is almost pushing some players over the cliff. Since last year two of the retailers have closed shop in Uganda and Tanzania while others are struggling with heavy debt. The risk of the distressed retailers collapsing has prompted a wide range of suggestions, including calls on the government to step in with rescue packages. But the government is taking a more guarded approach to the threat. Trade Principal Secretary Chris Kiptoo spoke to the Business Daily about the government’s plan for the retail sector. Here are the excerpts.
What is the state of the retail sector and how did we get there?
I am sorry to say that this is one sector that remains largely unregulated. The reality is that as long as one is able to register a company and convince suppliers to give them goods, nobody is there to police what such a person is doing or how they are doing it. We have learnt a bit too late that the government should have been more practical in its handling of the sector that is now heavily indebted. Sometime last year I set up a taskforce with all stakeholders and got a consultant to help us look into the state of affairs in this sector. That is when we came to realise that the retailers are carrying a total debt of Sh48 billion, which in my estimation must be higher than that. This is money owed to suppliers some of who are struggling with the payment of loans.