by Christine Lagat
NAIROBI, July 6 (Xinhua) -- Kenya will speed up implementating recommendations from a government appointed task-force to rescue retail chains that are struggling with debts and management hiccups, an official said on Thursday.
Kenya has the second most vibrant retail sector in sub-Saharan Africa after South Africa which contributes 8 percent to the GDP.
Principal Secretary in the State Department of Trade Chris Kiptoo said a raft of interventions that include capital injection, management overhaul and partnership with strategic investors are in the pipeline to prevent collapse of major retail outlets in the country.
"As a government, we are concerned about crisis that has bedeviled the retail sector in the country. We are proposing stringent regulations and cash bail-out to retail chains that are struggling with debts," Kiptoo told journalists in Nairobi.
He added that a government appointed taskforce comprising manufacturers lobby, suppliers and creditors has recommended a radical overhaul of key operations in the retail chains to avert their imminent collapse.
Kenya's leading retail outlets, including Uchumi Supermarket that is partly owned by the state and Nakumatt Supermarket have been grappling with under-performance linked to poor management and flawed expansion strategies.
Kiptoo regretted that Uchumi has been unable to pay workers and suppliers despite injection of capital by the national treasury.
"We have worked hard to keep Uchumi afloat. Both the creditors and suppliers agreed to be part of the rescue package to avert total closure of this strategic investment," said Kiptoo.
He revealed the Cabinet has approved a rescue package amounting to 100 million dollars to enable Uchumi to clear part of its outstanding debts.
The official however said the government will not inject capital to the privately owned Nakumatt that has also been experiencing operational hiccups linked to over-borrowing and poorly executed expansion strategy.
"Nakumatt is a big entity and we would like it to remain afloat but the government will not provide cash bailout and will only support other stakeholders exploring ways to rescue this retail giant," said Kiptoo.
Kiptoo said the government has borrowed international best practices in its bid to rescue the struggling retail chains that are a major source of employment and taxes.
