A financial storm is sweeping across Kenya as the National Treasury delivers a devastating blow to thousands of government suppliers. In a bombshell revelation, nearly half of the eye-watering KSh665 billion owed in pending bills has been ruled unpayable — triggering panic, outrage, and looming business shutdowns.
A special audit team led by former Auditor General Edward Ouko has only approved KSh230 billion as legitimate debt. The remaining billions? Labeled as irregular, undocumented, or outright suspicious — a move sending shockwaves through Kenya’s already struggling business community.
‘No Proof, No Pay’ – Treasury’s Ruthless New Rule
Appearing before the National Assembly Finance Committee, Treasury Principal Secretary Chris Kiptoo delivered a chilling ultimatum: “We will not pay a single shilling unless claimants provide solid proof.”
Kiptoo didn’t mince words. Any bill flagged by the Ouko-led audit panel now places the full burden of proof on the supplier — leaving many desperate businesses scrambling to trace long-lost paperwork or defend themselves in court.
“This is about fighting fraud,” Kiptoo insisted. But for many honest vendors, it feels more like being caught in the crossfire of a bureaucratic crackdown.
Billions Wiped Out, Projects Frozen, Businesses On Brink
Over KSh270 billion in claims have been sidelined due to missing or questionable documentation. The chaos has left businesses in ruins — some teetering on the edge of collapse after waiting years for payment.
Of the verified amount, KSh80 billion had been allocated to construction projects, some of which have already been settled. The rest covers supplies delivered to government offices — ministries, state corporations, Parliament, the Judiciary, county governments, and more.
Despite the Treasury’s promise to settle the cleared KSh230 billion — with partial payments expected by June — frustration is boiling over as countless suppliers discover their invoices have vanished into thin air or been dismissed without explanation.
Audit Fallout: Court Battles Looming, Trust Shattered
The Ouko taskforce was created to weed out fraudulent claims — but it has also ignited a fierce war of words between suppliers and government departments. Some vendors accuse officials of losing their documents, while others say they’re being unfairly targeted.
Many are now preparing for legal showdowns as they fight for payments they say are rightfully theirs. The financial squeeze is already being felt on the ground, with small and medium enterprises (MSMEs) warning of layoffs and closures.
Auditor General Drops More Bombshells: KSh194B Still Unsettled
In her latest report, Auditor General Nancy Gathungu flagged KSh194 billion still pending across various agencies as of November 2024. She warned the crisis is choking Kenya’s economy, disrupting cash flow, and slashing tax collections from VAT and Withholding Tax.
Top culprits? The Ministry of Defence leads with a staggering KSh22.9 billion owed — a sharp jump from last year. The National Police Service follows at KSh9.9 billion, Correctional Services at KSh5.2 billion, and the Agriculture department with KSh13.6 million.
One surprise came from the Medical Services department, where pending bills dropped dramatically from KSh41 billion to just KSh4.9 billion. But concerns remain, with the Teachers Service Commission still owing KSh3.3 billion.
Gathungu didn’t hold back: “Failure to pay cripples operations and strangles the economy. The Executive must act now to stop this spiral.”
Kenya’s Financial Integrity vs. Survival of Suppliers — Who Will Win?
As the Treasury draws a hard line on accountability, the nation watches closely. Is this the beginning of financial discipline in public offices, or the end of the road for Kenya’s honest, unpaid suppliers?
