Tharaka Nithi county governor Muthomi Njuki briefs the media after the opening session of the Intergovernmental Budget and Economic Council on January 26, 2023. PHOTO | FRANCIS NDERITU | NMG
News that the government plans to hire a transactional advisor to guide the issuance of a bond to clear outstanding pending bills is welcome.
Under the previous administration, several presidential directives requiring ministries, departments and agencies to pay up went unheeded.
We have seen in the past deadlines set by the Treasury for clear verifiable pending bills pass without a majority of the entities that provide goods and services to the national and county governments getting paid.
The total outstanding national government pending bills as of December 31 was Sh481 billion.
The bulk of the pending bills or Sh400.7 billion was owed by State Corporations and covers payments to contractors/projects, suppliers, unremitted statutory and other deductions and pension arrears for Local Authorities Pension trusts, and others.
Ministries, State Departments and other government entities meanwhile owed Sh80.3 billion in pending bills, which were mainly historical.
The consequences of delayed payments have been grave for small businesses that largely rely on supplying the government.
Some of them have been auctioned by banks while others have been forced to close.
Given how important small businesses are to any efforts to revive the economy, the William Ruto administration must fast-track and prioritise the payment of all pending bills to guarantee small businesses a new lease of life.
The new effort to clear pending bills should not fail this time around.
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