Counties under pressure to clear Sh168 billion pending bills, Nairobi leads defaulters

County governments are grappling with mounting financial obligations, with pending bills totalling Sh168.62 billion as of September 30, 2024.

This figure includes Sh129.15 billion for recurrent expenditure and Sh34.47 billion for development projects, according to the County Government's Budget Implementation Review Report for the first quarter of 2024-2025.

Johnson Sakaja-led county accounts for the lion's share of the debt, reporting pending bills amounting to Sh121.06 billion, representing a staggering 62 per cent of the total pending bills across all counties.

This places Nairobi far ahead of other counties with massive outstanding bills, including Garissa at Sh6.07 billion, Kiambu at Sh5.90 billion, Turkana at Sh4.78 billion, Machakos at Sh4.42 billion, and Mombasa at Sh3.93 billion.

Lamu leads counties with the least pending bills at Sh49.12 million, followed by Elgeyo Marakwet at Sh67.08 million, Nyeri (Sh215.75 million ), Kericho (Sh327.61 million) and Tharaka Nithi at Sh415.37 million.

The Controller of Budget (CoB) Margaret Nyakang'o has raised concerns over the ballooning debts and urged counties to prioritise the settlement of pending bills.

"We recommend that county governments prioritise all eligible pending bills in the budget as a first charge according to Regulation 55(2)(b) of the Public Finance Management (County Governments) Regulations, 2015," the report stated.

Counties have also been reminded to adhere to their pending bill payment plans for the Financial Year 2024- 2025.

In a letter dated May 9, 2024, the Senate resolved that counties should clear all verified pending bills below Sh1 billion by the end of the FY 2023-2024 while those exceeding Sh1 billion should be fully settled by the close of the current financial year.

"The Controller of Budget reminds county governments to adhere to the Senate resolution timelines," the report read.

The rising pending bills have drawn criticism from stakeholders who argue that delayed payments hurt local businesses and hinder the completion of development projects.

The CoB has warned that failure to address these obligations could further strain the counties' financial systems and delay essential services.

Nairobi's pending bills headache

In January, 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 NMS 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 downed 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.