National Assembly’s calls for a dedicated fund backed by a long-term bond to settle verified overdue invoices, has been turned down by the National Treasury
As of June 2021, the national government’s outstanding bills totalled Ksh 359 billion, while county debts totalled Ksh.89 billion, of which Ksh.51 billion had been validated
The national treasury Cabinet Secretary Ukur Yatani said that the payment of pending bills via long term bonds may not be feasible at the moment
“This is given the prevailing fiscal environment in view of the magnitude of these bills,” said Treasury Cabinet Secretary Ukur Yatani.
According to the controller of the budget, the national government’s bill was Ksh.376 billion as of September 30, 2021, with state corporations owning a large portion of it.
In the first supplementary estimates before Parliament, Treasury says that the approved debt ceiling has equally provided limited room for setting up the fund.
“This is constrained by the approved debt ceiling as well as the fiscal consolidation programme that the government has committed to ensuring a sustainable fiscal deficit.”
Yatani says Treasury remains committed to settling all verified pending bills and court awards as the same have been prioritized in budget allocations
Pending bills remain a concern in President Uhuru Kenyatta’s administration amid concerns of defiance by the respective accounting officers.
In 2019, the President directed all national and county government agencies to clear their verified pending bills within a month.
Controller of Budget Margaret Nyakango in her report said it was regrettable the bills have continued to pile up despite decrees and warnings to Ministries, Departments and Agencies to settle them as the first charge on the budget.
“All MDAs should ensure settlement of pending bills is prioritized on a First-In-First-Out basis in the FY 2021-22 to avoid further accumulation of debts and enhance liquidity and growth of the economy,” the report said.
The Treasury will formulate a strategy to ensure that all pending bills are gradually settled within a sustainable fiscal framework.
