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Pending bills fall Sh118bn on fresh State payments
Treasury Cabinet Secretary John Mbadi.
The stock of outstanding national government pending bills fell by Sh118.3 billion in the first three months of the year as the State commenced the payment of approved arrears.
New data from the Treasury shows pending bills fell from Sh539.9 billion at the end of last December to Sh421.6 billion as of March 31, 2025.
The Exchequer says ministries and State departments have received the green light to pay approved bills while arrears due in the roads sector will be paid through a bond to be issued by the Kenya Roads Board (KRB).
The latest report from the Pending Bills Verification Committee indicated that it had verified Sh578 billion in arrears out of the Sh663 billion, the Treasury told the Daily Nation.
Of the verified pending bills, only Sh229 billion were certified for payment, including Sh80 billion relating to the roads sector.
“About Sh80 billion of the approved bills relate to the road sector and we have started settling those bills using the securitisation of the Sh7 per litre road maintenance levy,” said Treasury Cabinet Secretary John Mbadi in an interview.
"Pending bills are coming down partly because of the road sector settlements. For the balance of Sh148 billion, we are working to make a proposal to the Cabinet to settle the bills. By the time we get the approval, the committee will be done with the verification, and we can add approved pending bills to the balance to be settled."
Mr Mbadi said ministries and State departments have been cleared to begin paying down approved arrears, especially sensitive dockets such as the Ministry of Defence.
The stock of national government pending bills peaked at Sh630.6 billion in September 2023 before easing in subsequent quarters. The current pending bills comprise recurrent bills of Sh162 billion and development bills of Sh259.7 billion. They include payments due to contractors, suppliers, unremitted statutory deductions and pension arrears for the Local Authorities Pension Trust.
The highest percentage of the State corporation's pending bills belong to contractors/projects and suppliers while ministries, departments, and agencies' pending bills are mostly historical arrears.
Last month, the KRB received the green light to issue a Sh135 billion bond whose proceeds will be used to settle pending bills in the roads sector.
Investors who buy into the bond will be compensated with collections from the Roads Maintenance Levy Fund, which was raised from Sh18 per litre to Sh25 last July.
The pricing of the bond is yet to be determined but was estimated by some Treasury officials at around 1.5 percentage points above the prevailing 91-day Treasury bill return.
