Kenyans to pay Ksh.25B in penalties over pending Gov't bills: CoB Nyakang'o

Controller of Budget (CoB) Margaret Nyakang’o says Kenyans will have to pay up to Ksh.25.3 billion as penalties accrued due to delays in settling pending bills in the national government.

In the full year report, Nyakang’o revealed that the Ksh.25.3 billion interest, on top of the principal pending bills amount, will be shouldered by the taxpayer due to failure by Treasury to clear the bills.

In the 2024–2025 financial year report, the pending bills headache is a key point of focus, with the CoB saying the pending bills increased by Ksh.9 billion in just 12 months.

The Davis Chirchir-led Ministry of Roads and Transport is the most notorious among government ministries and state departments with the highest penalty to settle.

The ministry is to pay penalties amounting to Ksh.21.3 billion on top of its original pending bills of Ksh.121.8 billion.

The Kenya Rural Roads Authority (KeRRA), Kenya National Highways Authority (KeNHA), and Kenya Urban Roads Authority (KURA) have all accrued billions of shillings as penalties.

The Ministry of Energy has accrued penalties amounting to Ksh.1 billion through its departments, the National Oil Corporation of Kenya and the Kenya Electricity Generating Company (KenGen).

The Ministry of Health has pending bills penalties interest amounting to Ksh.1.5 billion under the Kenya Medical Research Institute (KEMRI).

The Kenya Medical Supplies Authority (KEMSA), Kenyatta National Hospital, Kenyatta University Teaching and Referral Hospital, as well as Moi Teaching and Referral Hospital add to the list of institutions with pending bills in the health ministry that owe suppliers a total of Ksh.54 billion.

The Ministry of Water and Sanitation, through its department Tanathi Water Works Development Agency, has accrued penalties amounting to Ksh.1.2 billion.

The accumulation of pending bills restrains business cash flows, resulting in liquidity constraints, especially for small and medium-sized enterprises (SMEs), as they have to endure the long wait for overdue payments.

According to Nyakang’o, the pending bills menace has caused a scale back of operations, layoffs of workers and shutdowns of institutions affected.

The CoB has recommended that the National Treasury fast-track the verification of all pending bills of the national government and expedite the payment of eligible pending bills.