Lobby moves to court to stop 2025/26 budget over Sh698 million pending bills

Civil society group, Operation Linda Jamii, has moved to court to stop the 2025/26 budget-making process, demanding that the government first pays Sh698.3 million in outstanding bills.

In a petition filed in court, the group accuses the government of fiscal irresponsibility and argues that proceeding with the new budget without addressing the arrears undermines financial accountability.

Through its official representative, Fred Ogolla, the group is seeking to compel the government to settle all unpaid pending bills accrued between June 1, 2005, and June 30, 2022, before proceeding with the national budget for the 2025/26 financial year.

The group argues that the Budget Policy Statement (BPS) dated February 12, 2025, lacks transparency and fails to demonstrate good faith regarding how and when the government plans to clear the outstanding obligations.

“There is a serious contradiction by the 2nd Respondent in the Budget Policy Statement dated February 13, 2025,” the petition reads.

“While the Treasury states that its economic priority is to spur Micro, Small and Medium Enterprises (MSMEs) by allocating Sh60 billion through the Hustler Fund—as outlined in Section 1.2.2, page 5 of the statement—it has not addressed the issue of pending bills that continue to cripple SMEs financially.”

In addition, the petition highlights the alarming scale of unpaid bills across both national and county governments.

According to the petition, the national government owes suppliers a total of Sh516.27 billion. Of this amount, State corporations are responsible for Sh379.8 billion, while ministries, departments, and other agencies account for Sh136.5 billion.

County governments are also reported to have outstanding debts amounting to Sh182 billion. The petition states that county executives owe Sh179.87 billion to suppliers, while county assemblies owe Sh2.11 billion.

Ogolla further alleges that the National Treasury is using the planned shift from cash-based to accrual-based accounting as a strategy to mask the true scale of the pending bills and avoid immediate payment.

He also dismissed the government’s efforts to support MSMEs under the Bottom-Up Economic Transformation Agenda, calling them insincere.

“According to a circular issued by the National Assembly on June 16, 2020, the biggest victims of the government’s failure to pay pending bills remain SMEs, which contradicts the stated goal of empowering them through new borrowing schemes,” read the court papers.

The petition also cites Gazette Notice No. 13355 dated September 29, 2023, in which the President appointed a committee to verify pending bills. Operation Linda Jamii claims the move is yet another delay tactic, pointing to a history of similar committees, both at national and county levels, that have failed to yield meaningful outcomes.

The group has asked the court to supervise the entire verification and payment process to ensure accountability and safeguard public interest.

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