Editor's Review
The Cabinet has approved the settlement of verified government pending bills worth Ksh23.74 billion, covering claims of Ksh50 million and below.
The Cabinet has approved the settlement of verified government pending bills worth Ksh23.74 billion, covering claims of Ksh50 million and below.
According to a Cabinet Dispatch issued on Friday, October 9, the payments will cover 28,726 verified bills out of the 29,257 claims recommended for settlement following a review by the Pending Bills Verification Committee.
According to the Cabinet, the approved payments represent 98 per cent of the claims recommended for settlement, with the government seeking to address longstanding financial obligations to businesses.
"The payment of 28,726 verified bills totalling KSh23.74 billion, representing 98 per cent of the 29,257 recommended for settlement, will bring long-awaited relief to thousands of suppliers and contractors, some owed money since 2005," the dispatch read.
The decision followed an extensive verification exercise aimed at establishing the validity of claims submitted by businesses and contractors seeking payment for outstanding government obligations.
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The committee received more than 115,000 claims valued at Ksh664.8 billion, before recommending a smaller portion for settlement after reviewing the submissions.
"The decision follows a comprehensive review by the Pending Bills Verification Committee, which received 115,617 claims worth KSh664.8 billion. Following verification, 29,257 claims valued at KSh155.34 billion were recommended for settlement," the dispatch added.
The National Treasury will oversee the implementation of the Cabinet decision and coordinate the release of funds to the approved beneficiaries.
The government expects the payments to ease financial difficulties faced by businesses that have struggled to sustain operations while waiting for money owed for completed contracts and supplied goods or services.
"The National Treasury will oversee implementation, releasing much-needed funds to businesses struggling with delayed Government payments, easing cash-flow pressures, protecting jobs and restoring confidence among suppliers and contractors," the dispatch further read.
The government has also indicated that it will prioritise smaller enterprises and businesses owned by groups that have faced barriers to accessing economic opportunities.
"Priority will be given to micro, small and medium enterprises, particularly those owned by women, young people and persons with disabilities," the dispatch noted.
However, the current approval covers verified claims of Ksh50 million and below, leaving larger pending bills to be addressed through a separate, progressive settlement process.
The Cabinet stated that the remaining verified claims exceeding the Ksh50 million threshold would also be paid, although their settlement would take place in phases.
"The remaining verified bills exceeding KSh50 million will be settled progressively, ensuring that larger claims are also addressed," the dispatch added.
The government said the latest approval formed part of broader efforts to resolve accumulated pending bills and restore confidence among businesses that supply goods and services to public institutions.
"This follows the earlier clearance of pending bills claims worth more than KSh80 billion in the roads sector, underscoring the Government’s broader efforts to address longstanding payment obligations," the dispatch read.
Elsewhere, the Cabinet has approved Ksh45.3 billion in shareholder financing for Kenya Airways.
The Executive explained that the investment will support the national carrier's turnaround.
The money will be used to meet urgent financial obligations, including aircraft maintenance and returning grounded planes to service.
"The funds will be disbursed in tranches under National Treasury oversight, with a repayment period of up to 10 years and the possibility of conversion into equity, subject to the necessary approvals," the dispatch read.
The Cabinet further endorsed a proposal to convert existing government loans and accrued interest to Kenya Airways amounting to Ksh122 billion into an equity-qualifying tradable instrument to strengthen the airline’s balance sheet and support future capital raising.
According to the Ministers, the new resolutions are part of a long-term turnaround plan for Kenya Airways,
"They are intended to safeguard an airline that contributes more than USD1.3 billion annually to Kenya’s GDP through tourism, trade and regional connectivity. Implementation remains subject to the necessary corporate, shareholder and regulatory approvals," the dispatch added.
