City Hall begins settling Sh3bn SME pending bills

Nairobi County has begun settling Sh3 billion pending bills it owes small and medium enterprises (SMEs), nearly seven months after the County Assembly approved the payouts.

Members of the Nairobi County Assembly in March approved a Sh3.6 billion supplementary budget to settle outstanding debts for the financial year ending June.Out of Sh3.6 billion, Sh859 million was to settle contractors pending bills while Sh2.825 billion for suppliers.

The payment, however, did not take place due to a confusion caused by the transfer of services such as planning and development, transport public works, utilities and ancillary services as well as health to the Nairobi Metropolitan Services (NMS).

“The Nairobi City County Government wishes to notify all SMEs that the county government has started the process of paying all pending bills for SMEs that were cleared by the Auditor-General and the pending bills special committee appointed by the governor to review and clear pending bills from previous administrations,” said county Finance executive Allan Igambi in a notice published in local dailies.

Currently, City Hall’s eligible pending bills stand at Sh6.56 billion despite the Treasury directive to counties to have settled debt by last year.

Of the Sh10.67 billion of eligible pending bills as audited by the Auditor-General, the county has only paid contractors and suppliers Sh1.1 billion with another Sh3 billion to the Kenya Revenue Authority in value-added tax and pay-as-you-earn arrears.

“The payments will be done in the 2020/21 financial year to all SME that were cleared for payment in order to cushion the traders from the negative effects of the Covid-19,” it adds.

According to the City Hall debt management strategy paper tabled before the assembly in June, non-remittance of statutory deductions, non-payment of suppliers and legal contractors and related penalties are to blame for growing burden.