NAIROBI, Kenya – The government’s financial burden is worsening as penalties for delayed payments to suppliers and contractors surged to Sh24.8 billion by December 2024, up from Sh21.5 billion six months earlier.
The latest report by Controller of Budget (CoB) Margaret Nyakang’o exposes the alarming rise in unpaid bills across state agencies, with key institutions such as road authorities and research institutions accumulating billions in overdue payments.
The Kenya Rural Roads Authority (KeRRA) has been hit hardest, with penalties reaching Sh12 billion, followed by the Kenya National Highways Authority (KeNHA) at Sh7 billion.
Other heavily fined agencies include:
- Kenya Medical Research Institute – Sh1.45 billion
- Pyrethrum Processing Company of Kenya – Sh777 million
- Chemelil Sugar Company – Sh134.29 million
- National Oil Corporation of Kenya – Sh966 million
- Kenya Urban Roads Authority – Sh448 million
- Tanathi Water Works Development Agency – Sh1.22 billion
- Nairobi Metropolitan Area Transport Authority – Sh754.5 million
The surge in penalties adds to an already dire situation, with the government’s total pending bills reaching Sh524 billion by the end of 2024, compared to Sh516 billion in mid-year.
According to the CoB report, state corporations and semi-autonomous government agencies account for the bulk of the pending bills, owing Sh426.25 billion (81%), while ministries, departments, and agencies (MDAs) owe Sh97.81 billion (19%).
Among the worst offenders in unpaid bills are KeNHA (Sh89.9 billion), KeRRA (Sh66.3 billion), Kenya Electricity Transmission Company (Sh22.7 billion), and Kenya Power (Sh20.5 billion).
Development project contractors remain the hardest hit, with Sh243.19 billion in outstanding payments, making up 46.4% of the total pending bills.
Other unpaid obligations include Sh44.7 billion owed to suppliers of consumables, Sh38.19 billion in pension arrears, and Sh20.8 billion in unremitted pay-as-you-earn deductions.
Additionally, deductions meant for institutions such as the National Police Security Fund (Sh506 million), the National Health Insurance Fund (Sh114.6 million), and various Saccos (Sh2.8 billion) remain unpaid, raising concerns over financial mismanagement.
Nyakang’o has urged the National Treasury to streamline fund disbursements and align them with approved cash flow projections to curb the rising backlog.
“The National Treasury should release funds to MDAs per the cash flow projections and approved plans for seamless implementation. This will curb the accumulation of pending bills and additional costs related to delays in project completion on both the demand and supply sides,” she said.
With many of these bills categorized as historical, the government faces mounting pressure to clear outstanding payments or risk further economic strain.
Analysts warn that continued delays could severely impact service delivery, stall infrastructure projects, and undermine economic growth.
