EDITORIAL: Settle pending county bills

Editorials

EDITORIAL: Settle pending county bills

Delays in supplier payments have been blamed for the financial troubles small businesses face and job losses. FILE PHOTO | NMG 

County governments should pay all pending bills to spur growth in an already limping economy.

Delays in supplier payments have been blamed for the financial troubles small businesses face and job losses.

Small businesses expanded to provide goods and services to the counties, taking bank loans to increase their capital and human capacity. Unfortunately, some counties have delayed with payments, leaving some at the mercy of auctioneers.

The late payments have in turn hit the financial sector, where non-performing loans in 2018 jumped to their highest level in more than a decade.

Treasury Secretary Ukur Yatani said on Wednesday that the pending bills had dropped from Sh152 billion to Sh18.71 billion over the past 18 months in a speedy payment scheme aimed at improving the fortunes of small businesses and easing a cash crunch across all sectors.

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This is commendable. However, all genuine claims to goods and services offered should be settled for the struggling businesses to get back on their feet. The financial pain suppliers are struggling with after doing work for counties is destroying lives and denying Kenya the growth it badly needs.

The Treasury said that 17 county governments out of 47 have cleared their pending bills.

Devolution was meant to open up the country. At the counties level, small and medium-sized businesses bid for contracts because the devolved units are the biggest spender.

The government’s new regulations requiring payments to suppliers and contractors be made within 60 days of goods or services being supplied should be enforced to shield local businesses from financial pain in future.

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