The National Treasury has officially commenced the process of settling pending bills by the national government amounting to Ksh145.5 billion.
In a statement on Wednesday, January 31, National Treasury Principal Secretary Chris Kiptoo said that the announcement comes as part of the government’s commitment to transparency, openness, and accountability in public finance matters, as outlined in Article 201 of the Constitution.
“Accordingly, to-date as at close of business on Tuesday 30th January 2024, the Committee has received 1,537 claims from 38 MDAs amounting to Ksh. 145.5 billion out of which claims for goods is-309, services-945, works-1,195 and employee/labor related-2 claims,” read the statement in part.
The Pending Bills Verification Committee is set to receive submissions by respective Accounting Officers on all Pending bills relating to Works, Goods, Services and Employee/Labor related pending bills from 2005 to 30th June 2022.
According to the PS, the move to address long-standing debts is part of the government’s commitment to supporting and revitalizing the business sector, which has been grappling with financial challenges exacerbated by the economic downturn.
Also Read: Questions After Treasury Cuts Hustler Fund Budget by Half
Pending Bills Verification Committee
In recognizing the urgency to address the issue, the government took a decisive step by forming the Pending Bills Verification Committee (PBVC)
“The Cabinet under the leadership of His Excellency the President, approved a resolution for the verification of all pending bills from 1 July 2005 to 30th June 2022 and make recommendations to the Government on settlement of the same,” the PS said.
Additionally, the PBVC is required to identify any cases where there may have been corrupt, fraudulent, and false claims against the Government and propose reforms or measures that will ensure future accumulation of pending bills is avoided.
Also, the committee will, when necessary, engage the respective Accounting Officers in the process of analyzing the submitted pending bills for any clarification they may need.
The pending bills predicament, spanning over two decades, has had far-reaching consequences on the economy, businesses, and individuals.
Also Read: Treasury CS Issues Directive on Govt Pending Bills
Impact of the Debt on Businesses
“This menace, running over the last two decades, has resulted into lost opportunities for the people, businesses and the entire economy has missed huge multiplier effect that would have been created had the Government Obligations on businesses been timely paid,” read the notice.
PS Kiptoo stated that the ripple effect of the pending bills has led to reducing the profitability of enterprises by negatively impacting on the value of payments due to time value for money.
“The pending bills have reduced liquidity to the firms trading with the Government, which has drove others bankrupt and family assets being auctioned, increase in cost of capital due to higher risk premium, withheld circulation of cash in the economy and disrupted operations of suppliers and Micro, Small, and Medium Enterprises (MSMEs),” he said.
Furthermore, the accumulated bills have exerted pressure on scarce resources, with some of these bills attracting penalties, thereby putting more strain on the available resources.
PS Kiptoo reiterated the Government’s commitment to address the issue adding that going forward there shall be no tolerance or acceptance of accumulation of unpaid bills.
The Ministry, however, stated that once the pending bills are verified and confirmed, the public shall be informed of the quantum of the eligible pending bills and the policy recommendations to Government in clearing of the Bills.
