Government pledges reforms to strengthen Kenya’s retail sector

CATHERINE ODOYO-KNA

The Government has reaffirmed its commitment to strengthening Kenya’s retail sector through policy reforms aimed at boosting purchasing power, stabilizing the economy, and promoting local sourcing.

Speaking in Nairobi during the RETRAK 2nd Retail Summit, Cabinet Secretary for Investment, Trade and Industry Lee Kinyanjui said the sector remains a key pillar of economic growth due to its role in linking producers to consumers.

“The government recognizes the big role played by the retail sector because it does the last mile connection,” said Kinyanjui, noting that the expansion of retail outlets into smaller towns reflects the sector’s growing footprint.

The Summit that was held at Sarit Expo Centre and sponsored by NCBA Bank, Lop Biz, Equity Bank and Network International, convened key industry players, policymakers and development partners to discuss challenges and explore opportunities in the retail sector.

Kinyanjui attributed the growth of the retail sector to Kenya’s expanding middle class and increasing urbanization, which continue to drive consumer demand. 

However, he acknowledged that reduced purchasing power has slowed consumption.

“When the purchasing power of the citizens is compromised, the baskets from the supermarket become smaller,” he said.

To address this, Kinyanjui said the government has implemented measures, including lowering interest rates to encourage borrowing and increase liquidity in the economy.

“When there is more circulation in the economy, people get that money, they finally come and buy something from the retail outlets,” he explained.

The Cabinet Secretary revealed plans to ease the tax burden on low-income earners, allowing households to retain more disposable income.

Additionally, he said the government is accelerating the settlement of pending bills owed to suppliers, having allocated about Sh80 billion in the previous financial year and more in the current budget.

“When they are paid, the first place they rush to is to buy something to take home. Again, it affects the economy,” he said, urging county governments to also clear outstanding payments.

On financial markets, Kinyanjui noted that declining Treasury Bill and Bond rates have increased liquidity within banks, creating an opportunity for enhanced lending to the private sector.

He also cited the stability and availability of the Kenyan shilling as a major boost for retailers.