Suppliers plan class action over Sh574bn unpaid bills


The National Treasury building in Nairobi on Sunday, May 24, 2020. PHOTO | DENNIS ONSONGO | NMG

Government suppliers are planning to file a class action suit over arrears owed by parastatals, ministries, counties and other State agencies, which form the bulk of the country’s more than Sh574 billion pending bills, a lobby has said.

Association of Public Sector General Suppliers says it will be seeking a legal interpretation on how the mounting pending bills will be paid by the national government and county authorities, which will take power after the August 9 General Elections.

“The biggest worry is that most of the new governments are afraid of paying the old bills when they come into office. This is because of obvious fears like there might have been corruption and this creates a problem for them or if they pay, they may not have money for their own projects,” APSGS secretary-general Simon Gichuki told the Business Daily.

“What we are seeking is a structure of protecting suppliers in this country because as a supplier you’re always at the mercy of the outgoing and incoming government. We have been christened as the most corrupt and that is a sad thing.”

Pending bills have continued to rise despite a three-year-old circular by Treasury secretary Ukur Yatani directing ministries, parastatals and counties to prioritise payment of verified arrears in their budgets. The circular followed President Uhuru Kenyatta’s order on June 1, 2019.

Latest Treasury statistics, for example, show pending bills at the national level, largely by parastatals including public universities, jumped to Sh434.5 billion in March 2022 from 307.8 billion a year earlier.

The unsettled obligations include payments to contractors of State projects, suppliers of goods and services as well as unremitted statutory deductions such as payroll taxes, pension and medical cover contributions.

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