NAIROBI, Kenya – President William Ruto has announced a significant step towards alleviating the financial strain on businesses across Kenya by assuring suppliers owed billions of shillings that the government will clear Sh150 billion of the verified Sh230 billion in outstanding debts by the end of the year.
The announcement, made at State House in Nairobi on Friday, comes after a report by the Pending Bills Verification Committee confirmed that Sh230 billion is owed to businesses, with a substantial portion of the funds allocated to micro, small, and medium enterprises (MSMEs).
Acknowledging the adverse impact of these unpaid debts on businesses, especially smaller enterprises, President Ruto emphasized that settling these bills is essential for fostering a conducive business environment.
“The government is committed to paying off Sh150 billion of the Sh230 billion in verified pending bills. We understand the importance of clearing these debts to ensure businesses can thrive, especially our micro, small, and medium enterprises,” he said.
As part of efforts to prevent future accumulation of pending bills, the government has made a strategic move to digitize procurement processes.
Starting April 1, 2025, all government bidding and awarding of tenders will be conducted online.
Ruto highlighted that this digital transition will improve transparency, streamline procurement, and prevent instances where goods and services are procured without the necessary budgets.
“Going forward, bidding and awarding government tenders will be done online,” Ruto explained.
The President also called for a closer collaboration between the public and private sectors to drive the country’s development.
He urged private sector players, especially local businesses, to partner with the government in enhancing profitability and national progress.
“This partnership will enhance enterprise profitability and the country’s overall development,” Ruto added.
In his speech, the President encouraged the private sector to focus on savings as a viable alternative to high-interest loans, which would help small businesses access capital more easily and promote sustainable growth.
“I want to encourage the private sector to facilitate savings to use it as an alternative when investing,” he said.
Further supporting local businesses, Ruto discussed the government’s commitment to avoiding the burden of borrowing for development projects.
He highlighted that the Sh300 billion invested in affordable housing, fresh produce markets, and institutional housing projects had been funded through alternative mechanisms, not loans.
“It’s encouraging that all the companies working in the Affordable Housing Project are Kenyan-owned companies,” Ruto added.
On the topic of the sugar industry, President Ruto reiterated that the government was in the final stages of leasing public sugar mills to private operators.
“The government has no business running the sugar mills. They can be efficiently managed by the private sector,” he said.
In response to the government’s initiative, Erick Rutto, President of the Kenya National Chamber of Commerce and Industry, praised the introduction of zero-rated VAT on tea packaging materials, which he said would enhance the competitiveness of Kenyan tea packers in the global market.
“I want to thank the government for introducing zero-rated Value Added Tax on tea packaging materials. This will encourage farmers to produce more for export,” Rutto said.
Trade, Investment, and Industry Cabinet Secretary Lee Kinyanjui assured that his ministry is working closely with the National Chamber of Commerce and Industry to attract foreign investment into Kenya, further emphasizing the importance of public-private partnerships in driving economic growth.
