BAC wants fund set up to clear pending bi*ls
Lewis Njoka and Rawlings Otieno
National Assembly members have adopted the report on budget estimates and called on the National Treasury to devise ways of clearing all the pending bills of various sectors within the government.
While contributing to the debate on the report of the Budget and Appropriations Committee (BAC) on the Budget Estimates for the national government, the Judiciary and Parliament for the Financial Year 2021/2022, the members said that the issue of pending bills should be addressed.
They proposed that the fund, to be set up by October 1, will be financed through a long-term bond, as per the committee’s recommendation.
This, however, could see the country dig itself deeper into the public debt hole as the proposed bond will also count as part of public debt.
Speaking when presented the 2021/2022 budget estimates to Parliament, BAC chair Kanini Kega said despite the presidential directive in June 2019 that all pending bills be cleared immediately, they were still a challenge in virtually all government departments.
Worse still, the truthfulness of some of the pending bills was still in question.
Kega said by the end of 2020, money owed to suppliers by the government stood at Sh322 billion, a Sh23.7 billion reduction compared to Sh346.2 billion owed as of September the same year.
The committee says current suits against the government pose a financial risk of Sh1.2 trillion.
Churchill Ogutu, the head of research at Genghis Capital, noted that while the recommendation to set up a fund was a good attempt at getting Treasury to be more serious about pending bills, it could be counterproductive as it will result in increased public debt.
“We are getting debt to pay off debt. Ideally, the bond should go to development expenditure.
The rationale is that you should pay off your investors from the returns you make,” he said.
Kitui South MP Racheal Nyamai while supporting the budget estimates said that although Ministry of Lands have been allocated funds, the issue of pending bills is still dragging the various projects within the ministry.
Court cases
She said that during a meeting with the ministry, the officials stated that some Sh7.2 billion worth of pending bills have accrued from last three governments, adding that most of the pending bills was as a result of awards made in court cases due to commission, omission or falsification of documents.
“We have recommended that those responsible for falsification to be held liable,” said Nyamai.
Wundanyi MP Danson Mwakuwona in his contribution to the debate said that the National Treasury had not devised a way of addressing pending bills, adding that in any budget estimates, pending bills is an item.
“The issue of pending bills is an item that continues to pile. It appears that National Treasury has not found a way of addressing the issue.
We would support any idea that will go towards State-funded Universities and reduction of pending bills in any financial year,” said Mwakuwona.
According to the Central Bank of Kenya the country’s public debt stands at Sh7.3 trillion as of March of which Sh3.8 trillion is external debt and Sh3.6 trillion domestic debt.
For a while now public debt has been a contentious with Kega, noting yesterday that they will have to have to raise the debt ceiling to allow Treasury to borrow more. Treasury Cabinet Secretary Ukur
