Nairobi — The National Government's pending bills rose by Sh29 billion to Sh516.3 billion as of June 30, 2024, highlighting financial constraints the state is facing to clear the debts.
The rise came at a time when the Pending Bills Verification Committee was mapping out all of the state's outstanding debt to expedite clearance.
Treasury, in its quarterly economic and budgetary review, disclosed that state corporations are responsible for the bulk of these pending bills, accounting for Sh379.8 billion (73.6 percent) of the total.
The remaining Sh136.5 billion is attributed to ministries, state departments, and other government entities.
"The SCs pending bills include payment to contractors/projects, suppliers, unremitted statutory and other deductions, pension arrears for Local Authorities Pension Trust, and others. The highest percentage of the SCs pending bills (71.5 percent) belong to Contractor/Development Projects and Suppliers," read the report in part.
The pending bills within state corporations primarily consist of payments owed to contractors and suppliers, unremitted statutory and other deductions, and pension arrears for the Local Authorities Pension Trust.
Notably, payments to contractors and suppliers make up the largest share, representing 71.5 percent of the SCs' outstanding debts.
For Ministries and State Departments, the pending bills are largely historical, indicating longstanding financial obligations that have yet to be settled.
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Treasury, however, says it is keen on addressing this issue, with plans to roll out a comprehensive strategy aimed at clearing the outstanding stock of verified pending bills over the medium term.
This strategy will focus on identifying and rectifying the deficiencies and lapses that have led to the accumulation of these bills.
As part of the new policy, all Ministries, Departments, and Agencies (MDAs) are mandated to clear any expenditure carryovers from the 2023/24 financial year before making payments on new commitments in the current fiscal year.
However, with the surge in pending bills and the slow pace of reform implementation, concerns are growing over the government's ability to manage its financial obligations effectively.
The continued increase in outstanding debts could have serious implications for the country's economy, particularly in sectors reliant on timely government payments.
As the situation evolves, stakeholders will be watching closely to see if the government's renewed efforts will yield the desired results or if the pending bills will continue to climb, further straining the nation's finances.
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