Govt pending bills to suppliers grow five-fold in a year

Bills owed by government to suppliers have grown by over five times in the last year in spite of promises to clear the arrears.

According to an analysis of data from the Budgetary and Economic Review by the National Treasury, pending bills by the national government have grown by 517 percent to Ksh.334.2 billion from Ksh.64.7 billion in June last year.

A majority 86 per cent of the bills are owed by State Corporations with the balance held inside Ministries and State Departments.

The bills in State Corporations are largely owned contractors, suppliers, un-remitted statutory deductions and pension arrears for local authority pension trusts.

Bills by Ministries and State Departments meanwhile cover historical and contested arrears.

The substantive increase in pending bills by government are irrespective of a national government policy to promptly clear the arrears owed largely to local businesses.

The bills recorded in the year have however slightly eased from a record Ksh.368.9 billion in March.

The ease in the burden of payments is largely linked by attempts to force agencies to clear the bills through the National Treasury which has in recent months threatened to hold disbursements for agencies yet to erase the bills.

The push to clear the bills is expected to get further impetus from the recently announced economic stimulus package which features a Ksh.10 billion kitty to pay off the arrears which include VAT refunds to local businesses.

Pending bills have continued to weigh down local enterprises while including frustrating the conduct of business between government and the private sector.