Govt clears Ksh.15 billion pending bills but arrears remain bloated

The National government cleared Ksh.14.7 billion pending bills between January and March this year according to new disclosures by the National Treasury.

This to lower the total outstanding national government pending bills as of March 31 to Ksh.307.8 billion from Ksh.322.5 billion at the end of last year.

The revealed payments represents efforts by government agencies to clear the arrears which have served to severe cash-flows to businesses.

While State agencies have made efforts in clearing balances, the pending bills remain heavily bloated in spite of a directive by Treasury on the prioritization of the payments.

More than three quarters of the arrears or Ksh.262.9 billion are held in State Corporations with the balance accruing to Ministries, State Departments and other government entities.

Nearly two thirds of State Corporation arrears are owed to contractors and suppliers.

Put into context, the sum of pending bills is about 11 and a half times larger than the Ksh.26.6 billion post COVID-19 economic stimulus package which makes part of the 2021-22 budget.

About Ksh.8.6 billion of the funds in the relief program are scheduled for the enhancement of liquidity to business around the country.

However, the Ksh.8.6 billion sum is dwarfed nearly 36 times by the magnitude of arrears owed to business by the national government.

Players from the private sector have consistently cited pending bills by government as a challenge to businesses.