Economy

Treasury directive set to unlock billions in county bills

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National Treasury Building. FILE PHOTO | NMG

Businesses owed billions of shillings by the counties can breathe a sigh of relief after the National Treasury directed governors to conclude the vetting of pending bills by next week, paving way for debt settlement.

Each of the 47 county governments have set up technical teams to authenticate pending bills under a deal struck with the Treasury to ease the debt burden.

“Our instruction to all the accounting officers is that the process of verifying pending bills must conclude by end of this month,” Treasury Cabinet Secretary Henry Rotich said

“The fresh disbursements to counties will go into clearing the pending genuine bills before the accounting officers can be allowed to commit payment to anything else.”

The remark reinforces his Budget Statement undertaking to ensure that all the pending arrears are included in the budgets of the devolved units as first charge on revenues.

Assumption

It is likely music to the ears of suppliers and contractors owed billions of shillings by the county governments. It comes amid claims that the officials brought into office following last year’s General Elections have keen on honouring old debts, especially in cases where governors lost to newcomers.

The Controller of Budgets report shows the devolved units had accumulated debts totalling Sh100 billion by end of 2014/15.

Mrs Agnes Odhiambo, the Controller of Budget, has warned that the counties are likely to continue facing cash flow problems as long as they keeping spending on assumption of 100 per cent revenue collection.

The national government has allocated billions of shillings in sharable revenue to the counties, growing steadily from Sh199 billion in 2013/14 to Sh368 billion in 2018/19.