Sh23.74 billion in pending bills: Which government suppliers qualify for payment?

The Cabinet decision of October 9 covers verified bills for goods and services supplied to government institutions, with each claim valued at Sh50 million or below.

The government said the approval covers 28,726 claims worth Sh23.74 billion.

These represent 98 per cent of the 29,257 claims recommended for settlement after the Pending Bills Verification Committee's review.

The percentage refers to the number of recommended claims, not their total value.

The 29,257 claims recommended by the committee were valued at Sh155.34 billion, meaning the newly approved Sh23.74 billion represents only about 15 per cent of that value.

The remaining higher-value claims are expected to be handled separately, with the government saying bills above KSh50 million will be settled progressively.

This distinction is important for suppliers who may hear that 98 per cent of claims have been approved and assume that nearly all the money owed has been cleared.

How big is the pending-bills problem?

The verification committee received 115,617 claims valued at Sh664.8 billion.

Following scrutiny, it recommended 29,257 claims worth Sh155.34 billion for settlement.

The scale of the difference reflects how much of the submitted backlog did not receive a recommendation under the review.

It does not automatically mean every other claim was fraudulent; claims can fail to qualify for different reasons, and each supplier needs to rely on the status communicated through the verification process.

Some businesses have reportedly waited for payment since 2005.

For small contractors, long delays can leave wages, suppliers, tax obligations and loans unpaid even after the company has delivered the work for which the government contracted it.

What exactly is a pending bill?

A government pending bill is an unpaid obligation arising from goods supplied, work completed or services delivered to a public institution.

Such bills can accumulate when agencies commit to expenditure but do not settle invoices within the expected period.

Delayed payments can cause a chain reaction.

A construction firm waiting for a government payment may be unable to pay subcontractors or suppliers.

A small IT provider may struggle to meet payroll.

A business may also have borrowed money to fulfil a contract, leaving it liable for interest while it waits for reimbursement.

This is why the Treasury has described settlement as a way to restore liquidity and confidence among suppliers.

Paying verified arrears can release working capital back into the economy and help protect jobs.

But clearing old invoices is only half the problem.

Preventing new arrears from accumulating requires stronger budget controls, procurement discipline, verification before commitments are made and timely payment once work has been accepted.

What happens to the approved claims?

The National Treasury will oversee implementation of the Cabinet decision.

The government has said micro, small and medium-sized enterprises will be prioritised, particularly those owned by women, young people and persons with disabilities.

However, the Cabinet announcement did not specify a date when payments will begin or give individual suppliers a schedule.

Approval should therefore not be confused with money already deposited into a supplier's account.

Businesses should retain their contract documents, delivery notes, invoices, inspection and acceptance records, payment correspondence and any reference number issued during verification.

They should rely on official Treasury or procuring-entity communication to establish the status of their claim rather than pay intermediaries promising to accelerate settlement.

The bigger financial issue

The settlement offers potential relief, but the wider figures show that Kenya's pending-bills problem is not limited to this payout.

The committee's initial review covered claims worth hundreds of billions of shillings, while the approved amount addresses a specific subset of smaller, verified obligations.

The government will need to explain how the remaining recommended claims will be handled, how claims that were not recommended may be challenged or clarified, and what measures will stop future arrears from building up.

For suppliers, the immediate question is whether the approval becomes payment.

For taxpayers, it is whether the verification process protects public money while ensuring that legitimate businesses are not left waiting for years.

The Sh23.74 billion decision is a significant step, but it is not a declaration that all government pending bills have been cleared.