Ministries and all government agencies have been directed to pay pending bills to local suppliers, service providers and contractors before any new services.
The unpaid bills by the national government amount to Sh29.3 billion for the 2017/18 financial year, Treasury statistics show.
“The government has prioritized clearance of all the pending bills. In this respect, ministries, departments and agencies have been directed to settle pending bills as a first charge in the 2018/19 financial year budget," the quarterly economic and budgetary review report stated.
Spending by the ministries, departments and agencies (MDAs) for the three months to September 2018 missed target by 60 per cent to spend Sh262.4 billion against Sh437.6 billion.
The amount spent on salaries, pension and interest by the MDAs was Sh194.3 billion against a target of Sh268.2 billion, while development expenditure amounted to Sh68.1 billion against a target of Sh169.3 billion.
However, treasury attributed the difference in the figures to under reporting by MDAs.
The carried forward bills compound Sh108.4 billion indebted by country governments, according to a recent report released last month by Controller of Budget.
The report attributed counties failure to poor alignment of procurement plans, cash flow plans and delay by the National Treasury to disburse national transfers to the county governments in a timely manner.
In July this year, Central Bank’s Governor Patrick Njoroge said commercial banks’ gross loans stood at Sh2.39 trillion as at the end of March with non-performing loans taking up Sh302.8 billion or 12.66 per cent of the loans in the period.
He further said a large proportion of the stock of bad loans was attributable to delayed payments from government.
