NAIROBI, Kenya – The Controller of Budget (CoB) has given county governments until Friday, August 15, 2025, to submit detailed plans on how they will clear billions of shillings in unpaid bills, amid mounting pressure from the World Bank to settle debts owed to businesses.
In a circular dated July 16, Controller of Budget Margaret Nyakang’o directed county executives and assemblies to present their settlement strategies for the current financial year.
Her office will track compliance throughout the year as part of efforts to address what has become one of devolution’s most persistent financial headaches.
The directive falls under the World Bank-funded Kenya Devolution Support Program (KDSP) II, which has set tough conditions for counties to access development funds, including the progressive reduction of pending bills.
By the end of March 2025, counties had accumulated Sh172.51 billion in unpaid bills, with 98.5 per cent owed by county executive departments.
“The purpose of this circular is to request the county governments to commence implementation on the pending bills’ action plan to progressively reduce the stock of pending bills. This is a mandatory requirement for FY 2025/26,” Nyakang’o said.
Under KDSP II, Kenya secured a Sh25.8 billion ($200 million) loan from the World Bank to support county governments in strengthening financial management.
Part of the funding was used to create standardised templates for pending bills action plans — one capturing a county’s verified debts at the start of the year, another outlining the annual payment schedule, and a third tracking quarterly progress.
The templates were developed by the CoB in consultation with a multi-agency team and approved by the Intergovernmental Budget and Economic Council during its June 23, 2025, meeting.
The World Bank requires counties to meet minimum thresholds before receiving funding, including publishing verified lists of pending bills on their websites.
The move is aimed at ending a cycle of delayed payments that has crippled businesses supplying goods and services to county governments.
Pending bills have been a perennial problem since the advent of devolution, often sparking complaints from contractors and suppliers about stalled projects and financial distress.
