Unpaid bills by the state to its suppliers reach an alarming Sh525 billion, defying assurances of timely payments

The national government's debt to suppliers has reached a record high of Sh524.84 billion, according to recent reports. This accumulation of pending bills is causing a ripple effect, limiting cash flows and affecting the operations of small and medium enterprises (SMEs) across the country.

The Controller of Budget, Margaret Nyakang'o, has directly linked the State's failure to pay its bills to widespread business distress. Treasury Cabinet Secretary, John Mbadi, has previously described clearing pending bills as a "priority". However, the situation with unpaid bills remains a perennial issue that has plagued multiple administrations.

The accumulation of pending bills leads to high government costs due to interest charges and penalties on unpaid invoices. This financial burden is now putting pressure on small businesses, forcing some to scale back operations, lay off workers, or shut down completely.

The National Treasury owes Sh71.34 billion, with the State Department for Roads carrying a staggering Sh103.69 billion in unpaid bills and the State Department for Housing and Urban Development bearing Sh76.11 billion. Infrastructure and agriculture ministries are among the biggest offenders on the list of unpaid bills.

The gap between the government's promises and deliveries has never been wider or more expensive, according to a contractor. The findings present a stark contrast to the government's public commitments to contractors and suppliers. The situation with pending bills is affecting trust between the government and the private sector, and the standoff over unpaid bills has now become a defining test for President Ruto.

The ballooning pending bills highlight a critical failure in public financial management under President William Ruto's administration, according to analysts. The situation is exacerbated by flawed budgetary practices, such as making spending cuts during supplementary budget reviews against items where money has already been spent.

Despite the challenges, the Kenya Kwanza administration has pledged to settle arrears affecting economic growth. However, there are no specific details in the recent search results about which SMEs have been particularly affected by unpaid government invoices or the exact high amounts these unpaid bills have reached.

The debt surge is a concern for the overall health of the Kenyan economy. As the government works to address this issue, small businesses hope for a swift resolution to the standoff over unpaid bills, ensuring the continued growth and stability of their operations.

Unpaid bills by the state to its suppliers reach an alarming Sh525 billion, defying assurances of timely payments