Court petition seeks to block budget over Sh600 billion owed to suppliers

A human rights group has moved to court seeking to halt the preparation of the 2025-2026 national budget until the government clears more than Sh600 billion in pending bills.

Operation Linda Jamii filed a petition demanding that the state settle outstanding payments to suppliers and contractors before proceeding with any new budget plans.

The organisation, represented by Frederick Ogola, wants the High Court to compel the government to prioritise payment of bills accumulated from June 2005 to June 2022, citing harm to businesses and a breakdown of public trust.

“Thousands of contractors are still repaying bank loans for work they did years ago. Some have sold off their property or fallen into depression trying to stay afloat,” Ogola told the court.

The case, which came up before Justice Grace Nzioka on Wednesday, seeks to block the budget-making process until the bills are paid.

The national government owes Sh516 billion, while county governments are responsible for Sh182 billion in arrears, according to the petition.

Ogola argued that the unpaid amounts are causing financial strain on micro, small and medium enterprises (MSMEs), which form a large part of the economy and depend on government contracts for survival.

“The country is staring at a serious economic problem. The formation of a committee to audit these bills, without transparency or clear timelines for payment, is a delay tactic. The court must intervene,” he said.

The petition disputes the legality of the audit committee formed by President William Ruto in September 2023.

Operation Linda Jamii says the team, established through Gazette Notice No. 13355, lacked openness and is no different from other failed efforts to address the debt crisis.

In her ruling, Justice Nzioka directed the National Treasury, Attorney General, Auditor General, and the National Assembly to respond to the petition before April 25, when the matter will be mentioned again in court.

The group is also challenging the content of the Budget Policy Statement released on February 13, 2025. The statement pledges to support MSMEs through a Sh60 billion allocation under the Hustler Fund, but the petitioner argues this is misleading, considering the huge sums still unpaid to the same businesses.

“There is a serious contradiction by the 2nd Respondent in the Budget Policy Statement dated 13th February 2025. While the Treasury claims MSMEs are a top priority, it has not shown any commitment to paying what it owes them,” reads the petition.

The group further accuses the Treasury of using accounting changes to avoid responsibility. It says the move from cash-based to accrual-based accounting is being used to mask the scale of the debt problem and delay compensation to affected suppliers.

According to the petitioner, audit committees formed in the past have failed to resolve the issue due to political interference and a lack of funding.

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• 2025-2026 national budget
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• Court petition seeks to block budget over Sh600 billion owed to suppliers
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Ogola told the court that the only way to ensure accountability is through judicial supervision.

“The appointment of the recent audit committee is just another smokescreen,” he said.

“We want the court to supervise the verification and payment process directly to ensure accountability.”