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Counties to file pending bills payment plan by Friday
Controller of Budget Dr Margaret Nyakang'o when she appeared before the National Assembly Committee on Finance and National Planning at the Bunge Tower Nairobi on May 14, 2025.
Counties have until August 15, 2025 to submit plans for clearing pending bills to the Controller of Budget (CoB) as the World Bank intensifies pressure for clearance of the debts owed to businesses.
In a new circular to county executives and county assemblies, CoB Margaret Nyakang’o directed counties to submit their pending bills settlement plans for the current fiscal year by August 15, as the office readies itself to monitor their compliance to the plans.
The CoB is monitoring counties’ progress in payment of pending bills in compliance with a World Bank-funded programme, the Kenya Devolution Support Program (KDSP) II, that has set tough measures for the devolved units to lower debts to businesses.
By the end of March, county governments had accumulated pending bills to the tune of Sh172.51 billion, 98.5 percent of which was held by county executive departments.
“Based on the foregoing, the purpose of this circular is to request the county governments to commence implementation on the above pending bills' action plan to progressively reduce the stock of pending bills. This is a mandatory requirement for FY 2025/26," Dr Nyakang’o said in the July 16 circular.
“The completed action plans should be submitted to the OCoB by 15th August, 2025 for regular follow-up throughout the Financial Year.” The World Bank has loaned Kenya Sh25.8 billion ($200 million) through the Kenya Devolution Support Program II, to among other actions, develop pending bills action plan templates for county governments.
The CoB has developed three action plan templates, one capturing a county’s entire stock of verified pending bills as of the beginning of a financial year, another capturing the pending bills payment plan for the financial year and one used to report progress on settling pending bills quarterly.
“In furtherance of its mandate, the OCoB received support under the KDSP II to develop the Pending Bills Action Plan Templates for County Governments," Dr Nyakang’o said.
"Accordingly, the Pending Bills Action Plan Templates were developed in consultation with a multi-agency technical team and approved by the Intergovernmental Budget and Economic Council (IBEC) during the 27th Ordinary Session on June 23, 2025."
Setting the submission of pending bills action plans as a mandatory requirement for counties underlines the pressure the government faces from the World Bank, which has set minimum thresholds for accessing its funds.
In the World Bank’s Environmental and Social System Assessment for the funding, the lender says counties must also publish the list of verified pending bills on their websites.
“Minimum conditions - county government has verified stock of commitments and pending bills and disclosed this on their website,” the World Bank says.
The World Bank funding is meant to address challenges of counties not paying bills in time and lowering the high stock of pending bills, that has affected supply of goods and services to counties, including remittances of pensions.
While the counties started submitting pending bills payment plans to the CoB in the last financial year, compliance was noted to have challenges as many counties settled lesser bills than they had committed, triggering calls by the COB to honor commitments.
“Based on these findings, the CoB recommends the following actions to improve budget implementation moving forward: Counties should adhere to their pending bills payment plans for the remaining period of FY 2024/25,” Dr Nyakang’o said in the counties’ budget implementation report for the nine months to Marchy 2025.
By end of March, counties leading with huge stocks of pending bills included Nairobi at Sh115.69 billion, Kiambu (Sh5.6 billion), Machakos (Sh4.63 billion), Mombasa (Sh3.43 billion), Garissa (Sh2.62 billion), Kisii (Sh2.56 billion), Bungoma (Sh2.5 billion), Kisumu (Sh2.24 billion) and Busia (Sh2.04 billion).
