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Efforts to drive economic growth are being stymied by State corporations and Semi-Autonomous Government Agencies (SAGAs), which continue to accumulate substantial pending bills owed to suppliers.

These outstanding debts constrain development as a significant portion of funds allocated to ministries is redirected to settle arrears, leaving limited resources for new projects.

With the national and county governments being among the top tender issuers in Kenya, the impact on the private sector is profound, with some having closed shop due to lack of funds to run their operations.

A report by the Controller of Budget revealed that as of September 30, 2024, the country’s pending bills stood at Sh528.36 billion, a slight increase from Sh516.27 billion on June 30, 2024, but a notable decrease from Sh794.18 billion reported on September 30, 2023.

Payment for projects

State corporations accounted for Sh410.69 billion, while SAGAs contributed Sh117.67 billion, collectively comprising 78 per cent of the total.

The report highlights that State corporations’ pending bills include payments for contractors and projects, suppliers, unremitted statutory deductions, and pension arrears. Of the Sh410.69 billion, Sh249.79 billion (61 per cent) was attributed to contractors and projects, followed by Sh41.07 billion (10 per cent) for consumables and general supplies.

The Ministry of Roads and Transport owed the highest amount, totaling Sh180.90 billion. Within this, the Kenya National Highways Authority (KeNHA) led with Sh87.18 billion, including Sh4.88 billion in accrued interest and penalties. The National Transport and Safety Authority (NTSA) recorded Sh75.92 billion, while the Kenya Rural Roads Authority followed with Sh67.14 billion, including Sh1.08 billion in penalties.

Kenya Power and KenGen

The Ministry of Energy and Petroleum reported Sh74.55 billion in pending bills, comprising a principal amount of Sh68.12 billion and Sh6.43 billion in penalties. The Kenya Electricity Transmission Company contributed Sh22.76 billion, while the Kenya Power and Lighting Company (KPLC) added Sh20.28 billion, including Sh2.59 billion in interest and penalties.

Notably, the National Oil Corporation of Kenya incurred the highest interest at Sh3.84 billion, bringing its total to Sh13.18 billion. The Energy and Petroleum Regulatory Authority (EPRA) did not submit data on pending bills, while the Kenya Electricity Generating Company (KENGEN) reported Sh213.83 million.

The Ministry of Education also recorded high accrued debts totaling Sh66.15 billion, with Sh7.70 billion in interest. Leading institutions included Kenyatta University (Sh12.39 billion), the University of Nairobi (Sh11.93 billion), and the Technical University of Kenya (Sh9.07 billion). Meanwhile, the Ministry of Trade, Investment, and Industry reported Sh14.18 billion in pending bills, with the East African Portland Cement Company contributing Sh12.42 billion.

In contrast, the Ministry of Labour and Social Protection had the least pending bills, at Sh21.55 million. The Ministry of Co-operatives and Micro, Small and Medium Enterprises reported Sh154.17 million, and the Ministry of Defense recorded Sh479.21 million.