Nairobi's Unpaid Bills Surge, Straining Businesses

Nairobi's Unpaid Bills Surge, Straining Businesses

Nairobi County, under the management of the Nairobi Metropolitan Services, faced increased financial strain during the last fiscal year. Its pending bills surged by Sh40 billion, reaching a staggering Sh99.06 billion by June 2022. This significant increase impacted suppliers and contractors, contributing to their own cash flow issues.

Nairobi's outstanding payments accounted for 70% of the total Sh153.02 billion owed by devolved units to businesses and contractors. This disproportionately high share reflects a systemic disregard for timely payments, which further exacerbates cash flow woes for these entities.

The CoB report highlights that Nairobi County failed to prepare a viable payment plan for settling pending bills, further hindering the resolution. As of June 2022, the county treasury had not provided a report on the progress made in addressing this debt.

Other counties also recorded notable increases in unpaid bills during this period. Kiambu County saw a Sh2.37 billion surge, bringing its total arrears to Sh5.87 billion. Mombasa County's pending bills jumped by Sh760 million, resulting in a total of Sh5.87 billion owed to firms and contractors.

These escalating unpaid bills underscore the disregard by counties for past directives from the presidency and National Treasury. Both entities had emphasized the need to clear arrears to alleviate cash flow constraints in the private sector, a directive that has yet to be fully implemented.