President William Ruto’s administration says a mechanism of settling the more than Sh700 billion pending bills is ready for implementation.
Ministries, state departments and agencies owe suppliers Sh49 billion whereas counties are yet to pay debts in excess of Sh153 billion.
Treasury reports show that pending bills owed by state owned enterprises amounted to Sh448.6 billion as of June 30, 2022, bringing the total debt to Sh718 billion.
Deputy President Rigathi Gachagua said the pending bills payment plan would be rolled out once the transition process is complete.
“A mechanism has already been worked on and it can only be effected by a Kenya Kwanza Treasury appointee,” Rigathi said.
The DP indicated that they would form a team to review the bills for speedy payment in order to “release the money to the economy.”
In an interview with Citizen TV, Sunday, the DP said action would follow immediately after nominated Treasury Cabinet Secretary Ndungu Wainaina assumes office.
Rigathi further promised that the new team would “do away with the bureaucracies of the previous administration” in the verification.
“We want our own person who believes in what we want. We don’t want the Uhuru people to do it because they don’t believe in it,” he said.
“I want to assure suppliers of government and contractors, both in the county and national government, that as soon as the CS is sworn into office, we will start paying the bills.”
In their manifesto, Kenya Kwanza said they aimed to engage a transaction adviser “to advise on the securitisation of the outstanding bills subject to verification.”
The team said this was to remove the pressure of settling pending bills from the annual budget allocation.
Rigathi blamed the huge bills on the policies adopted by the previous administration which insisted on a multi-agency verification before the bills are paid.
“We want to make sure civil servants are given the leeway to make decisions. We want Principal Secretaries to pay pending bills without looking behind their shoulder that they’d be arrested,” he said.
These included payments to contractors, and suppliers, unremitted statutory and other deductions, and pension arrears.
For counties, Sh151 billion are owed by county executives while Sh1.3 billion is owed by county assemblies.
Governors who inherited the bills are gripped by the fear they may end up failing to meet poll pledges.
Regarding vote heads, Sh131 billion is for development projects while Sh22 billion is for unpaid suppliers of goods and services.
For bills brought forward from President Uhuru Kenyatta's administration, Sh14.6 billion is owed to National Youth Service contractors and suppliers and another Sh10 billion to the Crops department.
The Nairobi Metropolitan Services was yet to pay Sh3.2 billion at the time of the review, amid revelations a number of ministries, State Departments, and agencies owed suppliers more than Sh1 billion.
The Transport department owed suppliers and contractors Sh6.1 billion, whereas the Defence ministry was yet to pay its vendors Sh1.8 billion.
The Broadcasting department is yet to pay Sh1.3 billion, the Sports department (Sh1.14 billion) and the Northern Corridor Development department(Sh2.2 billion).
The State Department for Wildlife has pending bills of Sh2.06 billion with the Independent Electoral and Boundaries Commission yet to pay Sh1.81 billion.
The Office of the President owed suppliers Sh403 million, Interior (Sh552 million), Devolution (Sh754 million), Lands ministry (Sh567 million), Judiciary (Sh287 million) and the Petroleum ministry (Sh285 million).
Controller of Budget Margaret Nyakang'o, in her annual report for the said year, said it was the government that is negatively impacted by low revenue due to delays in tax submission and trust by the suppliers.
“The country’s overall economic growth is negatively impacted,” Nyakang'o said.
She recommended that MDAs prioritise payment of pending bills as the first charge before starting new development projects.
For counties’ pending bills, Nairobi has the highest at Sh99 billion, accounting for 64.7 per cent of the total stock.
Kiambu owes suppliers Sh5.3 billion, Mombasa (Sh5.2 billion), Wajir (Sh3.4 billion), Trans Nzoia (Sh2.8 billion), Kwale (Sh2.6 billion), Turkana (Sh2.3 billion), Embu (Sh2.2 billion) and Murang'a (Sh2 billion).
Gachagua said a situation where suppliers are owed more than Sh500 billion cannot be obtained, pledging to end the woes of contractors who are always at the mercy of auctioneers.
“If you look at newspaper adverts, you find several pages of houses being auctioned…80 per cent are people who had supplied to government and people who had done contracts,” Rigathi said.
Without giving timelines within which the payments would begin, Rigathi reported that the President was seized of the matter.
“He says that if we get Sh500 billion and pay the contractors and suppliers, we will inject the money into the economy. It will trickle to everybody. All projects will start and will create jobs,” he said.
(Edited by Tabnacha O)