Kenyan Parastatals with Most Pending Bills: A 2024 Financial Analysis

 

Introduction

 Kenya is an East African Country bordering the Indian Ocean to the east, the countries of Somalia. Ethiopia and South Sudan in the North, Uganda in the West and the United Republic of Tanzania in the South. It is currently the largest Economy in the East African Community, an organization that includes the United Republic of Tanzania, Uganda, Rwanda, Burundi, Somalia, South Sudan and the Democratic Republic of Congo.

The financial integrity of government agencies in Kenya is under intense scrutiny following a revealing report by the Controller of Budget, Dr. Margaret Nyakang'o. The report highlights staggering amounts of pending bills amassed by parastatals, painting a grim picture for contractors and suppliers owed billions. Topping the list are the Kenya National Highways Authority (KeNHA), Kenya Rural Roads Authority (KeRRA), and Kenya Electricity Transmission Company (KETRACO), collectively owing over Sh170 billion. This article delves into the specifics, ranking the top parastatals with the highest pending bills and offering insights into the fiscal challenges these agencies face.

List of Parastatals with Most Pending Bills

In an article that appeared in the Sunday Nation of 29^th December 2024 by Collins Omulo, noted the amounts owed to the suppliers by the following entities:

1. Kenya National Highways Authority (KeNHA): Sh82 billion
2. Kenya Rural Roads Authority (KeRRA): Sh66 billion
3. Kenya Electricity Transmission Company (KETRACO): Sh22.76 billion
4. Ministry of Roads and Transport agencies: Sh173.7 billion (combined)
5. Ministry of Energy and Petroleum: Sh68.12 billion
6. Ministry of Education: Sh66.1 billion
7. Agriculture Development Corporation: Sh18 billion
8. ICT and Digital Economy: Sh13.47 billion
9. Health Ministry: Sh10.84 billion
10. Rural Electrification and Renewable Energy Corporation: Sh16.49 billion
11. National Oil Corporation of Kenya: Sh13.18 billion
12. Kenya Urban Roads Authority: Sh13.6 billion
13. Kenya Railways Corporation: Sh9.2 billion
14. Nairobi Metropolitan Area Transport Authority: Sh1.59 billion
15. Kenya Medical Supplies Authority: Sh4.3 billion
16. Kenyatta National Hospital: Sh2.3 billion
17. National Hospital Insurance Fund: Sh2 billion
18. Moi Teaching and Referral Hospital: Sh1.7 billion
19. Postal Corporation of Kenya: Sh6.83 billion
20. Kenya Broadcasting Corporation: Sh6.43 billion
21. Kenyatta University: Sh12.39 billion
22. University of Nairobi: Sh11.9 billion
23. Technical University of Kenya: Sh9 billion
24. Jomo Kenyatta University of Science and Technology: Sh8.67 billion
25. Egerton University: Sh7.88 billion
26. Moi University: Sh6.2 billion
27. Kenya National Examinations Council: Sh1.3 billion
28. Kenya School of Government: Sh1.24 billion
29. Chemelil Sugar Company: Sh3.2 billion
30. Nzoia Sugar Company: Sh4.12 billion
31. Muhoroni Sugar Company Ltd: Sh1.24 billion
32. National Cereals and Produce Board: Sh4.27 billion
33. Pyrethrum Processing Company of Kenya Limited: Sh3 billion
34. Kenya Seed Company: Sh1.37 billion
35. Kenya Forest Service: Sh1.56 billion
36. Kenya Wildlife Service: Sh1.34 billion
37. East African Portland Cement Company: Sh12.4 billion
38. Tanathi Water Works Development Agency: Sh5.89 billion
39. Athi Water Works Development Agency: Sh1.37 billion
40. Lake Basin Development Authority: Sh4.59 billion
41. Ministry of Defence: Sh17.38 billion
42. National Treasury: Sh3.19 billion

Pending bills refer to the amounts owed by government entities to suppliers, contractors, and service providers for goods and services delivered but not yet paid for. These debts can arise from various sectors, including infrastructure, health, education, and more.

In a normal democracy, the time it takes to clear pending bills can vary significantly based on several factors which would be covered in the contract including:

• Budget Allocations: Adequate and timely budget allocations by the government are crucial for settling pending bills.
• Efficient Financial Management: Streamlining procurement processes, ensuring proper documentation, and avoiding unnecessary delays can help expedite payments.
• Political Will: The commitment of the government to prioritise debt repayment is essential.
• Economic Stability: A stable economic environment with steady revenue streams can facilitate faster debt clearance.
• Transparency and Accountability: Transparent practices and accountability measures can ensure that funds allocated for debt repayment are used appropriately.

It would appear that the controller of budgets in Kenya has encountered problems in all of the above. At the moment her hands are tied and all she can do is to highlight the issues and hope that the authorities are listening. Apart from investigating, she has no prosecutorial powers.

Ideally, in a well-functioning democracy with efficient financial management and strong political commitment, pending bills could be cleared within a fiscal year or less. However, in reality, it takes longer due to bureaucratic challenges, budget constraints, political will and other systemic issues.

 

Parastatals with the Least Pending Bills (Clean Bill of Health):

• Kenya Roads Board
• Kenya Ports Authority
• Kenya National Qualifications Authority
• Tharaka University
• Masinde Muliro University of Science and Technology
• Kenya Institute of Mass Communications
• Media Council of Kenya
• Kenyatta University Teaching, Research, and Referral Hospital

Conclusion: It's a quite alarming scenario, especially for suppliers and contractors who are severely impacted by these outstanding debts. This accumulation of pending bills not only disrupts business operations but also poses significant financial and psychological distress. Some businesses have had their property auctioned while a few managers have had to close down while others have committed suicide.

While it's hard to predict the exact actions of the government to remedy the situations, addressing and clearing these debts requires significant political will, strategic financial planning, and administrative reforms.

Historically, governments have taken steps to manage and reduce pending bills, but the sheer volume highlighted in this report suggests that it might take considerable time and effort to resolve these debts fully. The accumulation of such bills can impact on economic growth and public trust.

Given that this is a problem that is growing, it will require a concerted effort from multiple stakeholders, including policymakers, financial institutions, and the affected businesses, to create a sustainable solution. The government's commitment to transparency, accountability, and efficient allocation of resources will be key factors in determining the success of any debt-clearing initiatives.

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