Nairobi, Garissa among top 30 counties with huge amounts of pending bills
With billions still owed and time running out, it's unclear how county governments will manage this escalating financial crisis.
A new report from the Office of the Controller of Budget (OCoB) reveals that the financial strain on counties in Kenya is deepening, with 30 out of 47 counties carrying pending bills over Sh1 billion for the Financial Year 2023-2024.
This is an increase from 22 counties in the previous year.
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As of September 30, 2024, the counties owe a staggering Sh185.46 billion in unpaid bills, which represents 95.6 per cent of the entire counties' pending bills.
Among the counties, Nairobi, under Governor Johnson Sakaja stands out, accounting for a whopping 62 per cent of the total pending bills.
Nairobi alone owes Sh121.06 billion, a massive burden that continues to grow. Other counties struggling with high levels of unpaid bills include Garissa (Sh6.07 billion), Kiambu (Sh5.9 billion), Turkana (Sh4.78 billion), Machakos (Sh4.42 billion), and Mombasa (Sh3.93 billion).
The mounting arrears have caused significant frustration among businesses and individuals who had relied on these payments for operational costs.
Suppliers in distress
Many suppliers and contractors— some of whom took loans to fulfil their obligations — are now in distress.
The backlog of unpaid bills is also creating roadblocks in the delivery of essential services in counties, threatening to disrupt day-to-day business operations and hindering development.
In response, the Senate has stepped in, calling for urgent action.
On May 9, 2024, the Senate passed a resolution requiring counties to settle all verified pending bills under Sh1 billion by the end of FY 2023-2024.
For those exceeding Sh1 billion, the deadline has been extended to the end of FY 2024-2025.
The Office of the Controller of Budget has further advised county governments to prioritise the settlement of these bills in their upcoming budgets, highlighting the need to clear debts as a first charge under the Public Finance Management (County Governments) Regulations, 2015.
According to OCOB, "The county governments should adhere to the Senate resolution communicated through their 9 May 2024 letter, mandating that all verified pending bills be cleared by FY 2024/25."
As of now, counties' outstanding pending bills consist of Sh149.50 billion in recurrent expenditures and Sh44.51 billion in development expenses.
With billions still owed and time running out, it's unclear how county governments will manage this escalating financial crisis.
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