Treasury to cut funding for govt agencies that fail to pay suppliers

Treasury will stop releasing funds to some government ministries and parastatals until they start paying their suppliers who they reportedly owe billions.

In recent days, entities that have done business with the both the National and County government have decried over the delayed payment for services they delivered.

The delays, Treasury Cabinet Secretary Ukur Yattani has said have ”led to deterioration of financial positions of businesses and in particular the SMEs (small and medium enterprises).”

At this moment, the government owes an estimated Ksh 150 billion whose non payment the suppliers attribute ”mismanagement and corruption,” Reuters reports.

Yattani on his part said that he released funds in June for the specific purpose of paying the firms however, 15 counties and 53 ministries and departments of government are yet to make payments.

This announcement comes days after it was reported that President Kenyatta, in a meeting with his cabinet and parastatal heads wondered why Kenyans were broke.

This question, whether the President asked it genuinely or rhetorically angered many Kenyans who felt that the President was insensitive and oblivious about the affairs of the country that he is supposed to be in charge of.

These events it appears could have caused the move by treasury to cut funding with the minister announcing that from 1st December, the government could close the tap on any government entities that will not have paid suppliers.