Nairobi allocates Sh1.26 billion to settle pending bills amidst mounting debt
Despite this effort, the allocated amount represents just 1.03 per cent of Nairobi's total pending bills, which stand at Sh121.06 billion, the highest among all counties.
Suppliers and contractors in Nairobi City County are set to receive an additional Sh1.26 billion for pending bill payments following the county assembly's approval of the supplementary budget for the 2024/25 Financial Year.
This allocation aims to reduce the county's outstanding debts to its creditors.
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The finance, budget, and appropriation committee highlighted the importance of this allocation.
"To reduce the County debt, an additional Sh1.26 billion be set aside for payment of other creditors by the debt management department within the finance sector," reads the Supplementary Budget statement.
Despite this effort, the allocated amount represents just 1.03 per cent of Nairobi's total pending bills, which stand at Sh121.06 billion, the highest among all counties.
According to the Controller of Budget's report for the first quarter of the FY 2024-2025, counties collectively owe Sh194.01 billion to suppliers and contractors.
Of this, Sh149.50 billion is for recurrent expenditure, and Sh44.51 billion is for development. Nairobi City County alone accounts for 62 per cent of these pending bills.
Negative impact
The Controller of Budget, Dr. Margaret Nyakang'o, emphasized the negative impact of accumulating pending bills on public service delivery and business operations.
She advised county governments to prioritize settling these bills.
"The accumulation of pending bills negatively affects public service delivery and disrupts business operations. County governments are advised to prioritize the settlement of eligible pending bills as a first charge to their budgets in compliance with the law," Nyakang'o added.
In May 2024, the Senate passed a resolution requiring counties with pending bills under Sh1 billion to settle them by the end of the last financial year.
Counties with pending bills exceeding Sh1 billion have until the end of the current financial year to clear their debts.
"In addition, we request the County Governments to adhere to the Senate resolution communicated through their May 9, 2024 letter, mandating that all verified pending bills be cleared by FY 2024/25," Dr. Nyakang'o said.
The substantial pending bills have led to frustrations among businesses and individuals who rely on timely payments for operational costs.
Essential service delivery in counties is also threatened by these outstanding debts.
Nairobi's pending bills headache
In January 2023, Governor Sakaja said pending bills from the defunct Nairobi Metropolitan Services were to be moved to the Office of the President.
"What we agreed during the summit of the council of governors and the President was that all those pending bills projects are domiciled under the executive order of the presidency, where NMS was domiciled," he said.
There were about eight pending NMS projects which have not been completed.
The county boss noted that the Office of the President will be the one to pay for and complete the projects.
NMS was retired President Uhuru Kenyatta's flagship project to upgrade the capital city after years of neglect by previous regimes.
Initiatives initiated by Uhuru under NMS, including health centres, water, sewer lines, and street lighting, have consumed billions.
In July, For transparency and to lessen the burden of the county's pending bills, Sakaja requested the Senate to probe NMS Sh15 billion pending bills.
The Governor who appeared before the Senate Committee on Finance and Budget said his administration cannot pay the Sh15.4 billion that NMS left behind as the body was a national government entity.
"The accounting officer of NMS is not the Nairobi County government. The best person to account for the pending bills is the NMS leadership," Sakaja said.
This was after it emerged that some garbage collection contractors had down their tools due to delayed payments by the county governments.
According to the Governor, some of the contractors are among those whom NMS owed millions of shillings.
As a result, the Senate committee has directed Governor Sakaja to furnish a written report detailing NMS's outstanding bills and projects totalling Sh15.4 billion.
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