Over the past decade, suppliers and contractors doing business with the government have found themselves caught in a relentless cycle of financial uncertainty and distress.

 Year in, year out, they have been forced to wait—often indefinitely—for payments on goods delivered or services rendered.

What was once seen as a lucrative opportunity to work with the government has become, for many, a slow and painful road to financial ruin.

National Treasury Cabinet Secretary John Mbadi in his Budget speech said pending bills stand at Sh571 billion.

Many small and medium-sized enterprises (SMEs), particularly in the construction and supply sectors, have borne the brunt of this crisis.

Starved of capital

Without timely payments, these businesses have been starved of working capital, unable to meet even their most basic obligations.

Economic experts told People Daily that the state is thinking of waiving taxes for startups, but it would defy logic in the long run, if they do contracts and end up not being paid or money stuck in the state agencies.

“We have seen heartbreaking scenes and the reality of the suppliers being unable to pay school fees for their children, cover rent, service loans, or even put food on the table,” Robert Kennedy claimed it has been a big issue.

Others have had to lay off staff, sell off equipment, or shut down completely—victims not of mismanagement, but of a broken system that has normalized delayed payments.

“Beyond personal hardship, the knock-on effect has been a paralysis in their ability to take on new contracts or supply tenders,” notes George Kabonga.

With no assurance of payment and no access to affordable credit, many have had no choice but to walk away from future opportunities, further weakening the country’s entrepreneurial fabric.

Reassured suppliers

Amid this prolonged financial drought, CS National Treasury FCPA John Mbadi has re- assured suppliers all will be alright as they introduce the e-Procurement system.

The Cabinet Secretary for Finance, acknowledged the severity of the problem and announced a pivotal reform aimed at turning the tide.

He has unveiled a new e-Procurement System, designed specifically to overhaul the current payment process.

According to CS Mbadi, the system will provide a real-time, transparent platform that captures and tracks every supply and contract executed, ensuring that payment obligations are not only recorded accurately but also processed promptly.

“This new system is a game-changer,” he said. “For the first time, we’ll have an end-to-end digital trail of every transaction. No more lost documents, no more guesswork, and no more unnecessary delays. The data will speak for itself, and payments will follow accordingly.” Mbadi clarified.

The e-Procurement System is expected to streamline the workflow between suppliers, contractors, ministries, and the Treasury, making it harder for bureaucratic bottlenecks or mismanagement to stand in the way of timely compensation.

For thousands of struggling business owners, this may finally be the light at the end of a very long, dark tunnel.

Currently, the pending bills is over Sh500 billion, according to the latest audit report from the office of the Auditor General Margaret Nyakango.

While implementation and accountability remain key, the move signals a long-overdue commitment to restoring trust and stability in government procurement.

“If properly executed, it could mark the beginning of a new chapter—one where entrepreneurship is rewarded, not punished, and where public-private partnerships thrive on efficiency, fairness, and respect,” notes Kennedy.

Kabonga claims the biggest worry among Kenyans businesses has been the delayed payments so here is where the state needs to find a lasting solution.

“I’m glad that the National Treasury is making frantic efforts to address this. They need to ensure effective implementation of the e Procurement system.  It will save time and ensure value for money,” Kabonga explained.

Currently, most businesses contracted by the government, particularly in construction and supply, are facing growing financial strain due to delayed payments, according to Nyakango.

The latest Budget Implementation Review Report of the 2024/25 financial year by the Controller of Budget shows the national government’s pending bills have risen by Sh24.9 billion year-on-year to March 2025.

Nyakang’o’s report puts the total pending bills by the national government at Sh511.75 billion as of March 31, 2025, up from Sh486.81 billion recorded at the same time last year making up a 5.1 per cent jump year-on-year.