Supermarket chain yet to settle Sh8.6bn debt to suppliers

10Sep 2017
James Kandoya
Guardian On Sunday
Supermarket chain yet to settle Sh8.6bn debt to suppliers

THE Kenyan supermarket chain, Uchumi, has yet to settle Sh8.6 bn it owes its 283 suppliers, Permanent Secretary in the Ministry of Industries, Trade and Investment Prof Adolf Mkenda said yesterday.

He was speaking to reporters in Dar es Salaam on the sidelines of a bilateral meeting to lift trade restrictions between Tanzania and Kenya.

The PS said closure of the retail chain supermarket had affected not only the suppliers but the country’s economy as well.

According to him, an agreement before the closure of the supermarket was to settle outstanding debts the firm owed customers.
“Since the closure of Uchumi supermarket in Tanzania it has left a significant number of suppliers unpaid to date,” he said.

The PS said his ministry had made several follow-ups through the Tanzania High Commission in Kenya, adding however that the Uchumi supermarket CEO provided no tangible commitment and remained unresponsive.

Kenyan Principal Secretary in the Ministry of Industry, Trade and Cooperatives Dr Chris Kiptoo said his government would ensure that all the suppliers owed by the supermarket would be paid.

“We take the matter as very urgent and ask Uchumi supermarket to expedite settlement of its long overdue debts,” he said, adding that it was the right of the suppliers to be paid.

Commenting on wheat flour, Dr Kiptoo said Kenya would not allow Tanzanian wheat if a 25 per cent Common External Tariff (CET) was not paid.

“We import our wheat under duty remission at 10 per cent instead of 35 per cent. Our neighbours were granted a stay of application on the Common External Tariff (CET) rate and therefore import theirs too at the same percentage as ours.

The reason they got a stay was to allow them to plug their deficit, but we are seeing their traders trying to sell the same to us at no duty cost. That’s against the EAC rules,” Dr Kiptoo said.

He said Kenya would only allow wheat flour and other products milled from grain produced in Tanzania or whose full Common External Tariff rate had been applied.

Currently, Kenya has a demand for 1.5 million metric tonnes of wheat flour while it only produces 300,000 tonnes per annum.
Tanzanian gas companies export to Kenya about 40,000 tonnes of cooking gas annually.

Gas from Tanzania is cheaper because the cost of offloading at the ports of Tanga and Dar es Salaam is lesser than that at Mombasa port.