Garissa and Turkana topped counties with the fastest-growing unpaid bills to contractors between June and September this year, accounting for a combined Sh9.71 billion as private sector players continued to choke from unserviced bills.
Data from the Controller of Budget (CoB) shows the two northern frontier counties grew their pending bills by Sh5.69 billion and Sh4.02 billion respectively as the combined unpaid bills by the 47 devolved units jumped by Sh12.03 billion in the three months.
Accumulation of the unpaid bills has turned into a crisis for the private sector, with businesses being forced to close shop, lay off employees, and suspend expansion plans due to the mounting cashflow woes.
“The accumulation of pending bills negatively impacts public service delivery and disrupts business operations,” said CoB Margaret Nyakang’o in her latest review of the budget performance of the counties.
“We request the County Governments to adhere to the Senate resolution communicated through their May 9, 2024, letter, mandating that all verified pending bills be cleared by the end of the financial year 2024-25.”
Nairobi County had the third biggest jump at Sh2.6 billion, which pushed its pending bills to Sh121.05 billion at the end of September followed by Kilifi with a rise of Sh832.41 million, bringing its unpaid bills to Sh2.05 billion.
Unpaid bills by the 47 counties grew six percent to Sh194.01 billion in September from Sh181.98 billion three months earlier.
This (jump in pending bills) comes despite continued directives from the National Treasury and the Senate for counties to prioritise settling the bills in a bid to boost the private sector.
Senators had in May directed all counties to ensure that they clear all unpaid bills of less than Sh1 billion by June this year.
The directive was, however, ignored, leaving scores of contractors and businesses to grapple with the deepening cash flow hitches.
Private sector lobbies have severally warned that the ballooning bills are posing an existential threat to businesses, calling on the government to force counties to clear the dues.
Besides the unpaid bills, the private sector is struggling to get credit from banks, compounding the cashflow distress.
