government

Kenya’s new government faces huge task of paying $4.2bln pending bills

August 23, 2022

Cash-strapped parastatals account for the largest share of the unpaid payments

Kenya’s new president will inherit more than 500 billion Kenyan Shillings ($4.17 billion) owed to suppliers and contractors by ministries and state agencies, the Business Daily newspaper reported.

Pending bills rose to 504.7 billion Kenyan Shillings at the end of the last financial year in June, a 40.39 percent jump over 359.5 billion Kenyan Shillings the previous year, latest Treasury statistics showed. This is the biggest annual jump on record.

Cash-strapped parastatals, including public universities, account for the largest share of the unpaid bills, the report said, adding that several Kenyan small and medium-sized businesses bid for government contracts as the state is the biggest spender in the country.

Elsewhere, the late payments are hitting the financial sector, the report said. Lenders are saddled with non-performing loans, which have jumped to new highs due to Covid-19.

The Association of Public Sector General Suppliers (APSGS) is collecting signatures from members to seek legal opinions on how the new government will pay the mounting pending bills.

APSGS Secretary-General Simon Gichuki said it received documents on arrears amounting to 38.4 billion Kenyan Shillings ahead of September 1, when the class-action lawsuit is expected to be filed.

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