Sup­pli­ers of gen­eral goods push for 30-day pay pe­riod

KAM chief ex­ec­u­tive says de­layed pay­ments are crip­pling the sec­tor, dis­rupt­ing sup­ply chains due to cash flow chal­lenges

The Star (Kenya) - - Front Page - WEITERE MWITA @MwitaMartin

Sup­pli­ers are push­ing for a 30-day credit pe­riod for de­liv­er­ies in the new trade pol­icy be­ing de­vel­oped by the Min­istry of In­dus­try and Trade in a bid to reg­u­late the re­tail and whole­sale sec­tor.

About Sh400 bil­lion is owed to the sup­pli­ers in de­layed and dis­puted pay­ments by the gov­ern­ment and pri­vate sec­tor, the re­tail­ers’ lobby es­ti­mates.

The As­so­ci­a­tion of Kenya Sup­pli­ers chair­man Kimani Ru­gendo says un­pro­fes­sion­al­ism and cor­rup­tion in gov­ern­ment and pri­vate sec­tor have partly con­trib­uted to ac­cu­mu­la­tion of the ar­rears. “We are owed a lot but you (re­tail­ers) need to put your house in or­der,” Ru­gendo said.

The Kenya As­so­ci­a­tion of Man­u­fac­tur­ers chief ex­ec­u­tive Phyl­lis Waki­aga said de­layed pay­ments are crip­pling the sec­tor, dis­rupt­ing sup­ply chains due to cash flow chal­lenges. She said there is need to de­velop codes of con­duct for the play­ers in the re­tail and whole­sale trade to en­hance ac­count­abil­ity, fair trade prac­tices and rea­son­able pay­ment terms to sup­port growth within the in­dus­try.

“Chang­ing the cul­ture of late pay­ment will ben­e­fit the whole econ­omy, (while) in­creased cash flow will cause busi­ness growth, en­hance com­pet­i­tive­ness, main­tain and in­crease em­ploy­ment op­por­tu­ni­ties and ef­fi­ciency through the sup­ply chains,” she said dur­ing a work­shop by the state depart­ment of trade last week.

“We want a sit­u­a­tion where sup­pli­ers can be paid within 30 days. This cash flow is im­por­tant for con­ti­nu­ity, busi­ness growth and de­vel­op­ment.”

Trade PS Chris Kip­too dur­ing the same event said the gov­ern­ment is fi­nal­is­ing the Na­tional Trade Pol­icy which will ad­dress chal­lenges fac­ing the coun­try’s busi­ness com­mu­nity.

“This is the mo­ment for us to fix trade. I will do all within my pow­ers to fix trade,” Kip­too said. Among rec­om­men­da­tions made by KAM to ad­dress de­layed pay­ments in­clude fast-track­ing and fi­nal­is­ing the pol­icy and le­gal frame­works within which the whole­sale and re­tail sec­tor will op­er­ate to pro­vide the much needed di­rec­tion.

The lobby also wants a Na­tional Ad­vi­sory Com­mit­tee on prompt pay­ment to be formed.

“We pro­pose that the task force’s man­date fo­cuses on iden­ti­fy­ing valid con­cerns within the whole­sale and re­tail sec­tor on late pay­ments and for­mu­late pro­pos­als based on the Buy Kenya Build Kenya pol­icy to pro­mote lo­cal con­tent sourc­ing in the sec­tor,” Waki­aga said.

The task force will de­velop pro­pos­als on the struc­tures for whole­sale and re­tail to guide the sec­tor re­forms en­vis­aged in the draft Na­tional Trade Pol­icy.

In May this year, the Kenya Pri­vate Sec­tor Al­liance pre­sented a mem­o­ran­dum on late set­tle­ments to Pres­i­dent Uhuru Keny­atta, ask­ing the gov­ern­ment to pay in­ter­est for de­layed pay­ments for de­liv­ery of goods and ser­vices.

/ FILE

The As­so­ci­a­tion of Kenya Sup­pli­ers chair­man Kimani Ru­gendo at a past press con­fer­ence

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