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Suppliers were relieved after President Uhuru Kenyatta signed into law a bill compelling faster payment to tame rogue buyers.

The law is aimed at addressing pending bills, the bane of the economy, which saw some retailers collapse, with drastic knock-on effects on other sectors.

In the retail sector, supermarkets take advantage of the fact that most suppliers do not have agreements with buyers in the first place. But with a code of conduct things will change.

With the Competition (Amendment) Bill, 2019, which is now an Act of Parliament submitted to the National Assembly, the Competitions Authority of Kenya (CAK) is empowered to compel sectors with potential for abuse of buyer power to develop a binding code of practice.

The law also targets buyers accused of unilateral termination of commercial agreements without notice; transfer of costs; and buyer’s refusal to receive or return goods without justifiable reasons and in breach of contractual terms, among others.

It is aimed at separating the legal provisions on abuse of buyer power from those on abuse of dominant power and makes the case for various sectors, including national and county governments, the kings of pending bills.

It would also invigorate the national and county government’s payment schedules and tame acute cashflow challenges given that both levels of government owe suppliers Sh227 billion, equivalent to 2.5 per cent of the country’s gross domestic product in pending bills.

Unpaid cash from the national government amounted to Sh96.1 billion as at the end of the 2018/19 financial year, with other unpaid bills relating to prior years amounting to Sh42.7 billion for ministries, departments and agencies. Counties owed suppliers Sh64.2 billion as of October 28.

Hopefully this will give the economy a new lease of life at a time when SMEs had not only been cut out of the financial systems by capping of interest rates, but also denied cash by delayed payments.

If money payment is enhanced with this law, it would not only boost the ease of doing business but also spur growth across the board.

However, a lot of political goodwill and persuasion is needed to ensure the new regulation bears fruits and that these cascade to SMMEs and entrepreneurs, now hanging by a thread.