The Controller of Budget (CoB), Dr. Margaret Nyakang’o, has raised concern over a sharp rise in pending bills owed by State Corporations and government ministries, warning that the burden is hurting Small and Medium Enterprises (SMEs) and weakening the economy.
Speaking before the Budget and Appropriations Committee on Wednesday, September 3, 2025, Dr. Nyakang’o said unpaid bills are causing liquidity problems, threatening business closures, job losses, and higher government spending through penalties and interest charges.
“As of June 30, 2025, pending bills for the National Government stood at Sh524.84 billion, up from Sh516.27 billion the previous year. Of this, Sh404.33 billion, or 77 per cent, was owed by State Corporations—mainly to contractors, suppliers, and pension funds. A further Sh120.51 billion, or 23 per cent, was owed by Ministries, Departments, and Agencies (MDAs), largely historical bills,” she said.
She urged the National Treasury to move fast to verify and settle pending bills to ease pressure on the private sector and restore trust in government payments.
The CoB also called for stronger planning and financial management, saying essential services should be prioritized in the budget to reduce over-reliance on Article 223 of the Constitution. The clause allows the Treasury Cabinet Secretary to authorize withdrawals without prior approval from Parliament.
“In the 2024/25 financial year, Sh83.96 billion was withdrawn under Article 223, of which my office authorised Sh66.54 billion. This shows weaknesses in budget planning and execution,” she noted.
During the same session, Central Bank Governor Dr. Kamau Thugge briefed MPs on the new Risk-Based Credit Pricing Model that took effect on September 1, 2025.
“With this model, all banks will use a common reference rate, making borrowing more transparent and lending rates more responsive to monetary policy,” Dr. Thugge explained.
On the economy, he projected growth of 5.2 per cent in 2025 and 5.4 per cent in 2026, supported by resilient services, a rebound in agriculture, and recovery in the industrial sector.
