President William Ruto has inaugurated a pending bills committee to verify bills owed to suppliers by counties, national government and state agencies amounting to Sh640 billion for payments.
The committee chaired by former auditor general Edward Ouko will work to restore trust between the government and private sector.
The president noted that delayed payments is not only increasing the government’s debt but complicating the budget making process. The committee is expected to complete the verification process by June next year.
“Most of the pending bills are from the small and medium enterprises, they are actually collapsing the private sector as assets are being auctioned. The SMEs are saying that the government actions are very important for their survival,” noted Njuguna Ndung’u, Cabinet Secretary Treasury and National Planning.
The recent statistics, according to the quarterly budget economic review, is showing that the total outstanding national government pending bills as of June 30, 2023 amounted to Sh567 billion comprising of Sh443.6b for state corporations and semi-autonomous government agencies and sh123.8b from ministries, departments and agencies. During the same period counties reported Sh164.8billion.
According to the Office of The Controller of Budget, Nairobi City County had the highest pending bills as of 30th June 2023 which represented 65.1 per cent of the total county governments pending bills at Kshs. 107.33 billion. Other county governments with a high level of pending bills are; Kiambu at Kshs.5.96 billion, Wajir at Kshs.5.51 billion, Mombasa at Kshs. 4.29 billion, Murangá at Kshs. 3.65 billion, and Mandera at Kshs. 3.10 billion.
The high level of pending bills may be attributed to delays in disbursing the equitable share by the National Treasury; the change of county administrations and the requirement to undertake a verification process of pending bills has taken time, untimely approval of supplementary budget estimates to adopt prior-year pending bills in the current budget, leading to payment delays, and political interference and refusal by successive governments to honour obligations.
The committee will scrutinize and analyse all the existing stock of government pending bills, advise on reforms and measures to ensure future accumulation of bills is avoided, make recommendations to national treasury for payment or actions considered necessary for satisfactory disposal of bills and claims, and give directions on what will happen in future.