Suppliers of both the county and national governments in Kenya on Tuesday got a reprieve following formation of a committee to speed up payment of Sh640.9 billion owed to them. The Cabinet Pending Bills Verification Committee is tasked with the auditing of liabilities for the period between 2005 and 2022.
In a meeting chaired by President William Ruto at State House, the Cabinet noted that pending bills remains a sticky issue. The National Government pending bills since June 2005 to June 2022 stand at Sh481 billion while counties owe Sh159.9 billion.
The Committee will consist the Attorney General, the State Department of Roads, the State Department of Public Works, the State Department of Housing and Urban Development and the Public Procurement Regulatory Authority. The Ethics and Anti-Corruption Commission, the Law Society of Kenya, the Institute of Engineers of Kenya and the Institute of Certified Public Accountants of Kenya will also be part of it.
The Committee will examine and submit interim reports to the Treasury Cabinet Secretary upon verification. The Government will honour the obligation in question.
The move is aimed at establishing the integrity of all bills and cushioning small enterprises against liquidity inadequacies. Crucially, the committee will propose a mechanism to stop future pending bills.
The Tuesday Cabinet meeting agreed that the Committee will present its final report within a year.
Meanwhile, the Cabinet has approved the establishment of decentralised offices of the Attorney General and the Department of Justice. This will ensure that services are accessible to the people at the grassroots at a minimal cost.
It also consented to the transmission and introduction of Tribunals Bill, 2023, to Parliament. If enacted, the Bill will rationalise and regulate the administration and functions of Tribunals, establish the Tribunals Registry and ensure independence and impartiality in their operations.
According to the Kenya Institute for Public Policy Research and Analysis (KIPPRA), the private sector contributes about 80 per cent of Gross Domestic Product (GDP), provides 70 per cent of total employment and is a key source of the country.
Pending Bills
Business transactions between the Government and private sector firms in Kenya is characterized by prevalence in pending bills. Data from the 2018 World Bank Enterprise Survey shows the existence of pending bills by the Government, with about 12 per cent of the firms surveyed reporting that they had contracts with the Government which were late for payment.
The World Bank Report on the state of Kenya’s Economy indicates that the total value of pending bills had increased from 0.9 per cent of GDP in the 2015/16 financial year to 1.6 per cent in the 2017/18 financial year. This means there has been a buildup in pending bills in the economy over time as a result of delayed payment by the Government. The build up affects the overall liquidity of the private sector, hence the overall economic growth.
A special audit was done by the Office of the Auditor General (OAG) on the status of pending bills in Kenya as at 30th June 2018. The results of the audit are in line with findings from the World Bank Report, and World Bank Enterprise Survey for Kenya. More specifically, the audit revealed that there had been an accumulation of pending bills both by counties and by the National Government. At the time, the total value of pending bills reported at county level was Sh88.98 billion, while the National Government had pending bills worth Sh58.2 billion.
Pending Bills More than Tripled in 2020 to KSh322.5 Billion – Kenyan Wallstreet
