No government bail-out for Nakumatt


By O’brien Kimani

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The government is mulling over a proposal to set up a watchdog for Kenya’s fledgling retail sector.

Trade Principal Secretary Dr. Chris Kiptoo has told Channel One Business the regulatory body will be tasked with developing guidelines for players operating in the multi-billion shillings industry.

Dr. Kiptoo further says the state has no plans of offering struggling retailer Nakumatt any bailout since the government is not a shareholder.

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Kenya’s retail sector has become a major economic driver employing thousands of people and generating billions of shillings for the local economy.

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Due to the rising consumer purchasing power and a fledgling middle class, Kenya has also become a magnet for multinational retailers seeking to cash in the under-served retail market.

Formal retail penetration in Kenya is at almost 18 percent, with informal sector serving the rest.

Kenya’s retail sector grew by 13 percent in 2016 lifted by a rising consumer trend of bulk buying according to a survey by Procter & Gamble.

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The sector contributed about 10 percent to total wealth generated in Kenya in the 2016 according to the 2017 annual economic survey.

PS Kiptoo says due to the growth of the sector, the government has held talks with players in the industry with the aim of creating a watchdog to regulate the industry.

Dr. Kiptoo says a report on a taskforce formed last year to look into ways of strengthening the retail sector will be handed over to the government later this week.

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The PS further says the government will not extend a bailout to financially troubled retailer Nakumatt since the state does not own a stake in the retailer.

In the United States which has one of the most developed retail sector globally, the Federal Trade Commission is the state organ tasked with protecting consumers while promoting healthy competition in the industry.


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