State Agencies Now Owe Contractors And Suppliers A Burgeoning Sh200bn

The Executive is now taking drastic measures against parastatal bosses with huge debts  as debts owed by public entities to contractors and suppliers skyrocketed to Sh200 billion.

Last week, acting Treasury Secretary Ukur Yatani said that the 47 counties have accumulated debt totalling Sh108.41 billion from the previous financial year, a drastic rise from Sh35.84 billion the year before. The MDAs on the other hand have reported historical pending bills amounting to Sh82.7 billion.

The government is now breathing down heavy on heads of ministries, departments and agencies (MDAs) with huge debts. Just last week, sources say every Cabinet Secretary was summoned and asked to prepare and present a list of all parastatals under their ministries and the pending bills settled so far. The pressure elevated to the Cabinet secretaries is meant to push their parastatals to pay as soon as possible.

The private sector and the Central Bank of Kenya had warned that the huge mountain of pending bills is hurting economic recovery. President Uhuru Kenyatta in his June Madaraka Day address demanded all state agencies make quick settlement of pending bills without audit queries by end of the financial year (June 30), and urged the 47 counties to follow suit.

Mr Yatani says the Treasury had released Sh65 billion to county governments by June 30, 2019 as part of the final disbursement on the understanding that the devolved units would utilise the funds to pay off pending bills. “Fifteen county governments have not made any efforts to clear their pending bills in the 2019/2020 financial year. Their reported eligible pending bills have remained static between July 1 and October 31, 2019 and are sadly holding a huge proportion of the pending bills,” CS Yatani told parliamentarians.

The 15 counties are Machakos, Narok, Tana River, Migori, Tharaka-Nithi, Nandi, Kirinyaga, Bomet, Mombasa, Kiambu, Garissa, Isiolo, Nairobi, Vihiga and Baringo.