Uganda seeks talks with Kenya over Uchumi debt to suppliers

An attendant at an Uchumi Supermarket branch in Kampala: Uganda's Trade ministry organised a meeting with the aggrieved suppliers last week. PHOTO | FILE  

By TEA CORRESPONDENT

In Summary

• Uganda's Trade minister says plans are underway for a bilateral meeting that will also discus unpaid taxes.

Uganda is planning talks with Kenya over aggrieved Uchumi Supermarket suppliers who are seeking payment and failure by the retailer to pay taxes.

Permanent secretary Julius Onen said the Ministry of Trade is looking to discuss the matter at a bilateral meeting early next month.

“We have requested for a special session with Kenya to talk about [Uchumi’s] non-payment of suppliers,” he said, adding that Uganda made the request through the High Commissioner in Kenya.

This comes after the ministry organised a meeting with the aggrieved suppliers last week.

READ: Uchumi calls on Kampala suppliers to lodge claims

In the closed-door meeting, it emerged that the Kenyan retail chain did not only fail to pay its suppliers an estimated USh8.8 billion, according to the Private Sector Foundation Uganda (PSFU), but it also defaulted on taxes.

The Ugandan private sector apex body has started compiling a list of creditors which the government will table in the upcoming bilateral talks.

Sarah Nakibuuka, the PSFU communication and public relation manager said so far they had received receipts and invoices valued at nearly USh8.8 billion.

She said more suppliers were yet to submit their

Last year, Uchumi closed shop in Uganda after four years in business, rendering about 400 people jobless.

Uchumi’s chief executive Julius Kipng’etich said the company’s board had decided to close down regional units to speed up the process of stabilising its Kenyan operations.

“Outlets in Uganda and Tanzania make up only 4.75 per cent of our operations yet they account for over 25 per cent of our operating costs. The two subsidiaries have not made any profit over the last five years, which means they have been draining the parent operations,” said Mr Kipng’etich in an earlier interview.

The bid to have the suppliers paid come two years after 16 Ugandan and Rwandese firms and businessmen were allowed to revive a Sh4.2 billion ($47.5 million) compensation claim against the Kenyan government for goods and vehicles destroyed during the 2007-2008 post-election violence.

The firms sued the Inspector-General of Police and the Attorney- General, accusing them of negligence that led to the destruction of their trucks ferrying goods to Uganda and Rwanda by protesters.

Uganda traders lost about $14 million according to government estimates. Ugandan traders who also supplied South Sudan with grains are yet to be paid more than USh120 billion by the Salva Kiir-government.