Customers shopping at Nakumatt Lifestyle, Nairobi, on December 23, 2015. Nakumatt retail stores are closing branches because of heavy losses and inability to pay suppliers. [Photo/ nation.co.ke]Difficult times in the retail sector have paralysed job creation in the manufacturing sector and leading to a loss of existing jobs, a new World Bank report shows.The report dubbed, Kenya Economic Update, shows that spillover effects from challenges in the troubled retail market have contributed to the manufacturing sector's sluggish growth.The report says Nakumatt Holdings, which runs the largest supermarket chains, has contributed to the shutting down of some manufacturers after it could not honour payments to many suppliers.Nakumatt is facing a financial crisis running into billions of shillings leading to closure of some of its branches,latest being Garden city branch.This, according to the Star, led to the closing down of a number of small scale outfits that could not continue operating due to cash flow problems."Output in the manufacturing sector has also been curtailed by tightening credit conditions, insufficient raw materials for certain agroprocessing industries due to the drought (sugar, and maize meal) and spillover effects from the challenges facing Nakumatt, one of the largest retailers in Kenya,since many local manufacturing firms are suppliers," the World Bank report reads as quoted by Star newspaper.Some of the affected firms that have eventually closed due to lack of operating cash as a result of the debt owed to them include Tharaka honey, which stopped production in March 2017. Others are Kapari Limited that is at risks of being auctioned, Seal Diamond Limited which is unable to pay loans and Acinon Limited that reported a shrink in working capital.“Given the importance of the manufacturing sector in job creation, this weak performance is at a level too low to make a dent to unemployment or absorb the yearly increase in the labor market,” reads sections of the report.The update echoes a recent study by Ministry of Trade, Industry and Cooperatives, 'Kenya Retail Sector Prompt Payment' which indicated that the future of retail sector in the country is at a cross-roads due to a culture of late payment.

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