Nakuru County has set aside less than 10 per cent of the Sh4 billion it owes creditors in budget for the year starting July, diminishing hopes of quick payment of debts.
The county has set aside Sh350 million in the 2018/2019 budget with suppliers taking more than half of the allocation.
According to the county debt management strategy paper prepared by Finance and Economic Planning executive Joseph Kiuna, suppliers and contractors will be paid Sh187million.
The county also plans to remit statutory deductions amounting to Sh65 million, salary arrears and payroll deductions will gobble up Sh55 million while bank loans will consume Sh42 million.
Hundreds of suppliers, contractors, lawyers, banks and employees will therefore have to wait a little longer before their outstanding arrears are cleared by Governor Lee Kinyanjui’s administration.
Debts inherited from the defunct local authorities are estimated at more than Sh1 billion while pending bills from the previous county administration led by Kinuthia Mbugua are estimated at more than Sh3 billion.
The defunct local authorities employees inherited from Nakuru Municipal Council, Molo Town Council, Naivasha Town Council and Nakuru County Council are owed more than Sh350 million in salary arrears, statutory deductions and other payroll deductions.
The legal fees from the defunct local authorities as at December 2017 stands at more than Sh304 million while suppliers in the defunct authorities are owed Sh50 million.
Banks are owed Sh69 million while Nakuru Water and Sanitation Company (NAWASCO) which is fully owned by the devolved unit is owed Sh248 million in water bills.
According to a medium-term debt management strategy paper tabled in the assembly on Tuesday by the Leader of Majority Stanley Karanja, some of the debts have been outstanding for more than 10 years.
Mr Kiuna, who is facing impeachment for allegedly failing to submit the county integrated plan and other budget documents for scrutiny by the County Assembly, said the debt would be paid based on a priority plan and cash flow.
“The payment of inherited debt will be prioritised with the bank loan taking the lead followed by statutory deductions and pension contributions while salary arrears, suppliers and legal fees will also be paid in that order,” said Mr Kiuna.
He said the executive would soon draft a Bill proposing annual borrowing limit.
“This Bill will guide the sustainability of debt and also lay the ground for future borrowing,” he said.