The heavily indebted Kenyan retailer ceased its operations in Tanzania in 2015 without settling its payments to some 300 suppliers.
Dar es Salaam. The government of Kenya - which holds a 14.6 per cent stake in Uchumi Supermarket – has approved a total of Ksh350 million (about Tsh6.2 billion) for payment of the company’s suppliers in Tanzania who were left stranded when the retail chain closed its operations in the country.
The heavily indebted Kenyan retailer ceased its operations in Tanzania in 2015 without settling its payments to some 300 suppliers.
But yesterday, the chairman of the suppliers’ union, Mr Joseph Mlay, said in Dar es Salaam that they have been duly informed that the Kenyan Parliament has approved the payment of the money.
“The Uchumi chief executive officer, Julius Kipng’etich invited us to Kenya where we met with government leaders who assured us that the money will be paid as soon as official technicalities are completed between Tanzania and Kenya governments,” Mr Mlay said.
Of the 300 suppliers, 178 are women. Uchumi owed them a total of Sh6.2 billion.
In Kenya, the government has already effected payments to suppliers while further procedures are being done to do the same to suppliers in Tanzania and Uganda.
According to him, the Kenyan Parliament approved Ksh350 million for Tanzania and Ksh250million for Uganda.
Meanwhile, a legal officer with Quality Centre, Mr Pius Mero said that the supermarket was a tenant in their building and it had left a debt of Sh3.05 billion when it closed its operations in the country.
“This brought a huge set back to our business, he said.
which has been struggling to stay afloat,’ he said.
In August 2015, a new CEO was hired and in October 2015, the store chain closed down all its stores in Uganda and Tanzania, citing unprofitability. In the process, 900 former employees were laid off in both counties of whom 400 were in Uganda.
