NEW HEADACHE FOR PRESIDENT UHURU KENYATTA

The government continues to pile up debts with suppliers and contractors now fearing their businesses might be crippled.

The latest National Treasury sector working group reports show that the government closed the financial year in June 2020 with bills amounting to Sh93.3 billion, Sh35.1 billion higher than the previous financial year.

This is despite President Uhuru Kenyatta’s repeated promises to pay suppliers and contractors.

The situation is likely to plunge ministries, state departments and agencies into a deeper financial crisis.

Treasury maintains that pending bills form the first charge of every new financial year’s budget.

The bills are projected to get worse amid the dwindling revenues in the face of the Covid-19 crisis.

An analysis of the bills reveals that a number of state agencies are yet to submit civil servants’ contributions to the National Social Security Fund and National Hospital Insurance Fund.

President Kenyatta, who has been rallying MDAs on timely settlement of pending bills, had his office cross into the current financial year with a Sh1.6 billion debt – Sh364 million in recurrent expense and Sh1.23 billion development.

The Energy, Transport and Infrastructure sector had the highest bills at Sh57.1 billion which the sector leaders attributed to insufficient budgetary provision.

Of the said bills, Sh40.9 billion was in respect of infrastructure projects whose payment is largely dependent on the Exchequer releases.

“The sector will prioritise the settlement of the pending bills in 2021/2022 in line with Public Finance Management Act and regulations,” the sector leaders said.

“In addition, the sector will ensure no expenditure commitment without budgetary provision.”

The Health ministry closed the financial year with an uncleared Sh50.2 billion, of which court awards accounted for Sh25 billion.

The sector, chaired by Principal Secretary Susan Mochache, stated that Sh1.3 billion could not be raised for lack of liquidity while the Treasury failed to provide Sh48.9 billion.

Bills accrued at Afya House are largely recurrent in nature and include Sh14.7 billion for non-remitted NHIF and NSSF deductions.

Some Sh27 billion was reported as bills arising from other expenses while Sh6.4 billion was accrued from supplies of consumables.

The Ministry of Health headquarters closed the year with Sh26.6 billion pending bills of which Sh26.3 billion was recurrent expenditure and Sh379 million development.

Cash-strapped Kenya Medical Supplies Agency reported Sh2.9 billion debt from recurrent supplies and is seeking Sh6.9 billion from debtors.

Counties owe the medical supplier Sh2.8 billion – Sh2.1 billion by MoH, Sh594 million by government facilities, Sh328 million by SSD customers, Sh1.01 billion by development partners and Sh1.8 billion customer operations.

Kenya Medical Training College owes their suppliers and contractors Sh4.8 billion among them social benefits of Sh1.7 billion, Sh715 million to NSSF and Sh452 million on supplies.

The Education sector has Sh32.08 billion pending bills, largely accruing from unremitted statutory deductions by universities.

Universities, as of June, owed staff Sh14.7 billion. They had not paid suppliers Sh6 billion and had unremitted NSSF and NHIF deductions of Sh2.3 billion.

The Agriculture sector had an unsettled Sh21.8 billion debts due to lack of exchequer provisions and Sh217 million due to lack of budgetary provision.

The sector leaders said most of the recurrent pending bills were as a result of maize subsidy and local maize supplied to National Cereals and Produce Board.

Fisheries and blue economy had pending bills of Sh217 million relating to collective bargaining agreement by Kenya Marine Fisheries Research Institute staff union.

There are also bills arising from court award which the Agriculture ministry is awaiting the determination of a Court of Appeal challenging the case for which the award was granted.

The departments of ASALs, Sports, Culture and Heritage, Labour, Social Protection and Gender crossed the year with Sh3.16 billion unsettled bills.

The Environment department was yet to settle Sh5.4 billion during the review period, of which Sh4.9 billion was in respect of water and irrigation projects.

The Wildlife department was yet to settle Sh697 million as of June while state agencies which facilitate trade were yet to settle Sh5.6 billion.

A chunk of the General Economics and Commercial Affairs sector debts are from the accounts of the Regional and Northern Corridor Development department.

The Governance Justice Law and Order sector crossed the year with Sh4.2 billion due to delayed releases from the exchequer and Sh3.1 billion for lack of budgetary provision.

Interior had recurrent debts of Sh2.3 billion while the State Law Office was yet to settle Sh54 million owed to suppliers. The Correctional Services department had no pending bills.

The EACC owed Sh8.3 million, ODPP Sh254 million, ORPP Sh3.76 million, KNCHR Sh13 million and IEBC Sh3.01 billion.

The Public Administration and International Relations sector had claims of Sh2.9 billion which it attributed to inadequate funding for critical items.

The Devolution department owed Sh612 million, Foreign Affairs Sh249 million, Public Service Sh264 million, Youth Affairs Sh43 million, Auditor General Sh31.1 million and Ombudsman Sh2.1 million.

The report, however, excludes the analysis of the National Assembly, Joint Parliamentary Services and Parliamentary Service Commission.

Sourced from The Star