All gov’t agencies, counties ordered to clear pending bills in the next three weeks

National Treasury Cabinet Secretary Ukur Yatani has directed all government ministries, departments and agencies and the county governments to clear all their pending bills by June 30, 2021.

Yatani says the delay in payment of pending bills has dealt a blow to businesses and the economy at large, adding that strict measures would be taken against government entities that will fail to head the deadline.

The CS singled out County Governments as the main culprits in the delay to offset the pending bills.

“Delays in payment of pending bills to businesses who provide services to both National and County Governments has affected liquidity and
operations of these entities. In a number of cases, this has led to closure of businesses and affected livelihoods of the suppliers. Though progress was made in settlement of these bills by the National Government, we still have challenges with the County Governments that still owe various suppliers huge amounts,” said the CS.

“In this regard, I direct Government Ministries, Departments and Agencies and the County Governments to clear all their pending bills by 30th June, 2021.”

Yatani was speaking on Thursday while delivering the highlights of the budget policy and the revenue raising measures for the financial year 2021/22 in Parliament.

He called on the National Assembly to pass legislation that would see disbursement of funds stopped for counties that fail to clear pending bills.

“Mr. Speaker, I urge this House to support our efforts towards enforcing compliance in payment of all verified pending bills by County Governments by backing our proposal under Article 225 of the Constitution of Kenya to temporarily stop transfers to County Governments that persistently fail to comply with the directive to clear pending bills,” said the CS.

While this directive may bring hope to business persons who are yet to be paid by the government, a similar order was issued by President Uhuru Kenyatta two years ago and is yet to be fully complied with.

Speaking during Madaraka celebration in 2019, the Head of State had also directed the National Treasury to secure full compliance of the directive on clearing of pending payments.

While the actual total figure of pending bills is not clear, at least Ksh.300 billion are owed to local suppliers by the national government, with more billions owed by county governments to their suppliers. A report of the budget and appropriations committee showing some of the ministries notorious of pending bills.

The Transport and Infrastructure ministry leads the pack with Ksh.99 billion owed to suppliers under the infrastructure department. Of this, Ksh.31 billion are due to land owners who surrendered their parcels for construction of public infrastructure.

With no clear roadmap proposed in the fiscal budget presented Thursday, the Budget committee is proposing establishment of a Pending Bills Fund by the 1st of October this year, and finance it through a long-term bond, to clear all verified bills and court awards.