The Kenyan government is set to begin the payment of Ksh 206 billion in pending bills, offering relief to suppliers and contractors owed by the state. National Treasury Cabinet Secretary John Mbadi announced that the payments would commence following the completion of an ongoing verification process.
According to Mbadi, the Pending Bills Verification Committee has recommended the settlement of Ksh 206 billion out of a total Ksh 660 billion in outstanding payments. The verification process flagged Ksh 268 billion worth of claims due to lack of proper documentation, raising concerns over transparency in public procurement and financial management.
The government has prioritized payments to suppliers owed between Ksh 1 million and Ksh 10 million. This cluster, which represents about 70% of the verified pending bills, largely comprises small and medium-sized enterprises (SMEs). The move is expected to inject much-needed capital into businesses, enabling them to resume normal operations, support service delivery, and retain jobs.
“The settlement of these pending bills is crucial for the survival of SMEs and suppliers who have been struggling due to delayed payments. It will also help reduce the stock of non-performing loans in the banking sector,” Mbadi stated.
The government’s decision to clear the verified bills aligns with efforts to stabilize the economy by easing financial constraints on businesses that rely on state contracts. Stanbic Bank has projected that the move will significantly reduce non-performing loans held by Kenyan banks, which have been under pressure due to delayed payments to businesses.
Key sectors that will benefit from the payments include energy, infrastructure, ICT, health, education, public administration, international relations, agriculture, and national security. These sectors account for the highest share of the outstanding pending bills that have been approved for settlement.
The payment of pending bills has long been a contentious issue in Kenya, with many businesses facing liquidity challenges due to government delays. With the planned disbursements, the government aims to restore confidence in public procurement processes and enhance economic stability.
As payments begin, stakeholders will be keen to monitor the impact on SMEs, job retention, and economic growth. The move is expected to provide a much-needed boost to businesses, helping them recover from financial strain and continue contributing to the country’s development.
