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The Trade Ministry plans a more robust legal framework that will institute self-regulation among supermarket chains.
Cabinet Secretary Adan Mohamed said poor corporate governance issues and lack of astute asset management are the main reasons for the financial struggles supermarket chains Uchumi and Nakumatt are experiencing currently.
“For some time now, our retail and wholesale trade sector has been experiencing some challenges. We have had several consultative forums with all stakeholders in the retail sector in particular the supermarkets value chain and we have agreed that the sector needs self-regulation to be supported by a legal framework,” said Mr Mohamed in Nairobi at the weekend.
SECOND BAILOUT
At the same time, the CS revealed that Uchumi had reached a deal with suppliers that would see 80 per cent of the sales the troubled retailers make go towards paying outstanding debt.
The CS further said the Cabinet was also in the process of finalising modalities on how the second phase of the Uchumi bailout would be handled.
“The Capital Markets Authority will help sort out governance issues related to Uchumi,” said Mr Mohamed.
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