What you need to know:
- Governor Sakaja will first have to tackle a mountain of pending bills that hit Sh99 billion in June.
- Between July 2021 and June 2022, the Nairobi City County accumulated an extra Sh14 billion in pending bills, on top of the Sh85.7 billion as at the end of June 2021, the Controller of Budget (CoB) has disclosed.
- This means that, on average, over the past financial year, Nairobi county accumulated Sh1.2 billion in pending bills monthly.
Nairobi Governor Johnson Sakaja faces a huge task in implementing his ambitious manifesto as he will first have to tackle a mountain of pending bills that hit Sh99 billion in June.
The county has been unable to pay contractors and suppliers after it went through a series of changes in leadership, with mismanagement at City Hall nearly causing the devolved unit to choke under debts.
Between July 2021 and June 2022, the Nairobi City County accumulated an extra Sh14 billion in pending bills, on top of the Sh85.7 billion as at the end of June 2021, the Controller of Budget (CoB) has disclosed.
This means that, on average, over the past financial year, the county accumulated Sh1.2 billion pending bills monthly.
“At the beginning of FY [financial year] 2021/22, the county failed to prepare a satisfactory payment plan for settling the pending bills.”
“During the period under review, the county treasury did not provide a report on the settlement of pending bills as of June 30, 2022,” CoB Margaret Nyakang’o says.
In her report on budget implementation in counties for the 2021/22 financial year, Ms Nyakang’o reported that, by June, pending bills in Nairobi constituted 65 per cent of total debts owed by all the 47 counties.
“As of June 30, 2022, counties reported accumulated pending bills amounting to Sh153.02 billion, comprised of Sh151.68 billion by county executives and Sh1.34 billion by county assemblies. Outstanding pending bills by Nairobi City County accounted for 64.7 per cent of the entire stock of pending bills at Sh99.06 billion,” the report stated.
The pending bills by counties this year are also a huge increase from the Sh96 billion reported by June last year and imply that the counties accumulated a monthly average of Sh4.7 billion.
Of this amount, Sh151 billion is owed by county executives, most of which have had their governors lose their seats or retire after serving the constitutional two terms, and will form a new headache for incoming governors as they try to balance them with rosy promises to county residents. Other counties recorded to have huge pending bills are Mombasa at Sh5.87 billion and Kiambu at Sh5.23 billion.
“To address the identified challenges, [CoB] advises county governments to settle pending bills as a first charge in the FY 2022/23 budget in line with Regulation 41 (2) of the Public Finance Management (County Governments) 2015,” Ms Nyakang’o said.
The report also observed an alarming situation where, of the pending bills, a total of Sh22 billion went to recurrent expenditure, meaning that some counties are going without paying workers their salaries and settling other dues classified under recurrent budgets.
In Mombasa, for instance, of the Sh5 billion in pending bills, Sh3.9 billion owed by the county executive relates to recurrent activities and Sh1.2 billion to development spending.
Counties with least pending bills are Lamu (Sh4.3 million), Mandera (Sh5 million) and Elgeyo Marakwet (Sh14.3 million).