Senators want Treasury to use part of shareable revenue to pay county debts
The committee recommended immediate payment of all valid pending bills after the auditor general had reviewed them.
County governments may soon have a percentage of their equitable shareable revenue withheld by the National Treasury to clear outstanding debts, under a proposal gaining traction in the Senate.
The Senate County Public Accounts and Investments Committee, led by Homa Bay Senator Moses Kajwang, is pushing for legislation that would allow the Treasury to retain part of the funds to pay off the huge debts that have accumulated in various counties.
More To Read
- Kiptoo: Pensioners not on new portal by February deadline to be suspended from payroll
- Treasury forms expert team to mobilise local capital for development, reduce reliance on loans
- Treasury boosts Immigration Department’s budget to tackle delays in issuance of crucial documents
- State to introduce standardised rules for leasing public assets to boost revenue
This move could trigger strong reactions from governors, who have come under increasing pressure for the growing unpaid bills.
"The committee will seek to reintroduce the Prompt Payment Bill with amendments aimed at ring-fencing a certain percentage of the equitable shareable revenue for pending bills and retaining money at source to pay pending bills," the committee said in its report.
The proposal follows an investigation into the growing issue of unpaid bills in county governments.
The committee found that many counties have outstanding debts that have remained unpaid for years, with some failing to prioritise paying verified bills as required by law.
Accumulated bills
According to the committee's report, many county entities continue to accumulate new bills without clearing old ones.
"The committee observed that the county entities had pending bills that had been outstanding for several years," it stated.
The committee recommended immediate payment of all valid pending bills after the auditor general had reviewed them.
Furthermore, each county government should submit a payment plan for approval by their respective county assemblies.
As of September 2023, the total amount of pending bills for counties stood at Sh168.62 billion, according to the latest budget implementation review report.
This backlog has a serious impact on businesses, with many contractors and suppliers complaining of non-payment for services rendered.
"The accumulation of pending bills negatively impacts public service delivery and disrupts business operations," said Margaret Nyakang'o, the Controller of Budget.
Highest pending bills
Among the counties with the highest pending bills is Nairobi, with Sh121.06 billion, followed by Garissa (Sh6.07 billion), Kiambu (Sh5.90 billion), Turkana (Sh4.78 billion), Machakos (Sh4.42 billion), and Mombasa (Sh3.93 billion). The most worrying aspect, however, is the rapid rise in unpaid obligations. Between July and September 2023, the pending bills in 20 counties increased by more than Sh15 billion.
Nairobi and Turkana, in particular, have come under scrutiny for the sharp rise in their debts. In just three months, Nairobi's pending bills increased by Sh2.61 billion, while Turkana's debts surged by Sh4.02 billion. The two counties have emerged as the biggest contributors to the mounting debt crisis, with Nairobi's pending obligations now at Sh121.05 billion, up from Sh118.44 billion in June.
Other counties such as Nyandarua, Migori, and Narok have also seen their debts balloon, with each accumulating nearly Sh1 billion in unpaid bills in just three months.
This rising debt crisis is casting a shadow over Kenya's devolved system, with the Senate committee's proposal for the Treasury to intervene seen as a potential solution to clear the growing backlog.
Top Stories Today
