- 15 Counties have paid their pending bills
- 9 Counties still lagging
The Kenyan government through the National Treasury has disbursed Ksh 14.5 billion to 24 counties to clear pending bills.
Acting Treasury Cabinet Secretary Ukur Yatani on the Status of Payment of pending Bill’s by county Governments, said 15 counties had fully paid their pending bills: Baringo, Elegeyo Marakwet, Embu, Homabay, Kajiado, Kericho, Kilifi, Kitui, Kwale, Laikipia, Makeni, Nyamira, Nyandarua, Nyeri and Uasin Gishu.
“With regard to payment of pending bills, the following nine counties have presented clear, acceptable eligible pending bills payment plans and have adhered to them: Wajir, Kakamega, Nandi, Murang’a, Nairobi City, Mombasa, Tharaka Nithi, Kisii and Taita Taveta.”
According to the Public Finance Management Act, 2012, the National Treasury should disburse funds to counties at the beginning of every month, but not later than the 15th day from the start of the quarter.
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Yatani said he would invoke the provisions of Article 97 of the Public Finance Management Act to block additional allocations to county governments that were showing no progress in clearing pending bills.
“These delayed payments for goods and services procured by National Government MDAs and County Governments has led to deterioration of financial positions of businesses and in particular the SMEs, including businesses owned by women, youth and persons with disabilities. This has had a negative impact on the economy, including less than optimal levels of employment and escalation of poverty levels,” said Yattani on 23RD December 2019.
liquidity has improved
Currently, liquidity has improved in recent months, but slow as the government and private sector compete for available funds.
“This may be worsened by reduced debt redemption by Treasury in the period. For now, government payments amid slow recovery in private sector lending may keep overnight rates in single digits,” says NCBA Analysts.
As at Jan.6 2020, Treasury had paid out Ksh 10.23 billion of the Ksh 15 billion cleared bills.
“However, this may not be sufficient to keep markets liquid in view of the aforementioned borrowing needs, unless the government’s budget efficiency improves markedly,” said the analysts.