National Treasury CS Ukur Yatani has asked all government agencies to clear their pending bills by the end of June 2021.
While presenting the Budget for the year 2021-2022 before the National Assembly on Thursday, the CS said that the Treasury will stop the transfer of cash to agencies that will not comply with the directive.
“Government ministries, departments, and counties directed to clear pending bills by June 30. To enforce compliance, Treasury will stop cash transfers to counties that don't comply with the directive... MPs urged to support the proposal,” Yatani said.
In April this year, the Treasury issued a warning to ministries, state departments, and agencies over unpaid pending bills running into hundreds of billions of shillings.
Yatani had in a circular to all accounting officers asked MDAs to submit reports on the status of pending bills at the respective entities by April 30.
The CS also said that the government is undertaking targeted reforms to strengthen public institutions, including the digitisation of land records.
On manufacturing, the government has revived textiles and manufacturing which has created jobs for the youth.
Commenting on the pending bills outside the Parliament after delivering the budgets, the CS said that SMEs, private sectors have been affected after delivering services and are yet to be paid.
"Kenyans, private sectors, SMEs have been providing goods and services to governments, whether county or national government and at the end of the day they are not being paid or not paid in time," Yatani said.
He added that delaying their pay will have a negative impact on their businesses as well as the economy.
"In the process, some of them who had borrowed money from banks go through challenges or repayment, some of their businesses are auctioned."
As a way of ensuring settlement of the pending bills, the CS has proposed an amendment to the Public Financial Management (PFM), seeking to hold institutions that fail to pay accountable.
