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State agencies to clear burgeoning debts

By Valentine Kondo | November 21st 2018


Cabinet Secretary Finance and the Treasury Henry Rotich. [Photo: Standard]

Treasury has asked all ministries and government agencies to first clear outstanding dues before seeking for more services from local suppliers and contractors.

It records Sh29.3 billion yet to be paid dues for 2017/18 fiscal year by the national government for services it sought from local dealers and contractors.

The quarterly economic report states that the government is concerned about settling of unpaid bills for this period.

“The government has prioritized clearance of all the pending bills. Ministries, departments and agencies have been directed to settle pending bills as a first charge in the 2018/19 financial year budget," the report stated.

Ministries, Departments and Agencies spent Sh194.3 billion contrary to a target of Sh268.2 billion in pension, salaries and interests with development expenditure recording Sh68.1 billion against a mark of Sh169.3 billion.

MDA’s spending in a span of three months was down from a mark of Sh437.6 billion to Sh262.4 billion to report a 60 percent decline as from September 2018. 

There has been a growing trend of government domestic and external borrowing with the Central Bank issuing a warning.

In August, ICT Cabinet Secretary Joe Mucheru said that he was not going to settle Sh2.5 billion debt owed to media houses through the Government Advertising Agency claiming that treasury had not issued the money.

Central Bank of Kenya data shows that the country has eased on external borrowing after realizing Sh200 billion through Eurobond in February with external and internal borrowing declining and peaking respectively.

A report by National Treasury Cabinet Secretary Henry Rotich shows the country’s debt burden will hit Sh5.6 trillion by June next year further showing that national debt as at June this year – both domestic and foreign – stood at Sh5.1 trillion.

Domestic debt stands at Sh2.5 trillion while foreign debt has hit Sh2.6 trillion.

The President in September, cited a Sh67.5 billion funding gap for his decision to reject the Finance Bill 2018.

Kenya’s public debt is projected to hit Sh7 trillion by the time President Uhuru Kenyatta office.






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