Garissa, Turkana's unpaid bills to contractors hit Sh9.7 billion in three months
By Lucy Mumbi |
The rising debts have placed immense pressure on the private sector, with businesses struggling to cope with unserviced bills.
Garissa and Turkana counties have emerged as the top regions with the fastest-growing unpaid bills to contractors between June and September this year, contributing to a combined Sh9.71 billion in outstanding payments.
The rising debts have placed immense pressure on the private sector, with businesses struggling to cope with unserviced bills.
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According to data from the Controller of Budget (CoB), the two counties saw their pending bills increase by Sh5.69 billion and Sh4.02 billion respectively, contributing to a total rise in unpaid bills of Sh12.03 billion across all 47 counties during the three months.
This accumulation of debts has led to severe challenges for private companies, forcing some to close, lay off staff, and halt expansion due to cash flow difficulties.
"The accumulation of pending bills negatively impacts public service delivery and disrupts business operations," CoB Margaret Nyakang'o said in her latest budget performance review of the counties.
Clear verified pending bills
She urged county governments to adhere to a Senate resolution from May 9, 2024, which mandates that all verified pending bills be cleared by the end of the 2024-25 financial year.
Nairobi County recorded the third-largest increase, with unpaid bills rising by Sh2.6 billion to Sh121.05 billion by the end of September.
Kilifi followed with a Sh832.41 million increase, bringing its outstanding bills to Sh2.05 billion.
In total, the unpaid bills across all counties rose by six per cent, from Sh181.98 billion in June to Sh194.01 billion by September.
This increase in pending bills comes despite ongoing directives from the National Treasury and Senate for counties to prioritise settling their debts, aiming to relieve the burden on the private sector.
In May, Senators instructed counties to clear all unpaid bills under Sh1 billion by June, but the directive was largely ignored, exacerbating the financial distress faced by contractors and businesses.
Private sector associations have repeatedly warned that the growing unpaid bills pose a serious threat to business viability and have called on the government to take more stringent action to ensure counties pay their debts.
In addition to unpaid bills, businesses are also struggling to secure credit from banks, further compounding their cash flow problems.
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