Ksh500B Pending Bills: How Ruto Plans to Pay Struggling Businesses

Suppliers are owed over Ksh500 billion for goods and services provided to government agencies

With costs of fuel, electricity and basic food commodities on the rise, President William Ruto is grappling with a full-in tray in his first week in office. It was reported this week that top government officials and strategists have been holed up at State House reviewing fiscal policies including various subsidies – balancing expectations from ‘Hustlers’ who propelled them to power and the precarious economic situation the country finds itself in.

One of the things on the agenda, undoubtedly, is the Ksh500 billion pending bills conundrum. Suppliers are owed over Ksh500 billion by government agencies for various goods and services provided. The delayed payments have adversely impacted businesses, with many struggling or collapsing under the weight of loans taken to fulfill their obligations.

In his first speech as President on Tuesday, September 13 at Kasarani, Ruto promised a quick solution.

“We shall give priority to the expeditious resolution of our pending bills so that the government can meet its obligations and facilitate better economic performance,” the President declared. He explained that the Government would soon avail a proposal that would enable the suppliers to be paid within a shorter period. But what exactly is the plan?

Digging into the Kenya Kwanza manifesto as well as previous pronouncements by the President and his top economic advisers offers some insight into the options being explored by the new administration to tackle the pending bills.

READ ALSO>>9 Things Ruto Promised to Deliver Within 100 Days

In its manifesto, the Ruto-led Kenya Kwanza coalition stated that it would solve the issue by securitizing the pending bills.

Securitization refers to the conversion of debt into marketable securities, typically for the purpose of raising cash by selling them to other investors. While it would raise money for suppliers to get paid, the move would leave taxpayers saddled with potentially expensive debt.

“To remove pressure of settling pending bills from annual budget allocations, a transactions advisor will be engaged to advise on the securitization of the outstanding bills subject to verification,” the manifesto read in part.

Ruto’s top strategist, economist David Ndii had noted that the securitization would unlock capital for businesses thus spurring the economy. He also backed Deputy President Rigathi Gachagua, who, in his debate with Martha Karua, suggested that the Kenya Kwanza administration would float a Ksh500 Billion bond to ensure the pending bills are paid.

Ndii further dismissed arguments from Azimio policy hawks that the proposal by Kenya Kwanza would see Kenya pay a fortune to the investors who would buy off the Ksh500 billion pending bills.

“Pending bills are domestic, what we do with them has no bearing on foreign debt. Securitization is simply an off budget settlement. It’s also a economic stimulus because it relieve each flow constraints on businesses,” Ndii argued in June.

The Ruto campaign constantly tore into President Uhuru Kenyatta for leading a debt accumulation spree and has promised to “put the brakes on borrowing”. Ruto vowed to ensure the country’s mounting debt obligations, exacerbated by a weakening Shilling, would be met as he pledged to significantly increase tax revenues by expanding the tax base.

“I am not going anywhere near or even having a discussion on restructuring debt. We must pay our debt. We have the capacity to pay our debt… We will put the brakes on borrowing,” he stated in July.

“We will have more resources to repay our debt and we will be borrowing less, which is a double gain,” the President argued.

READ NEXT>>Meet the Billionaires Who Attended Ruto’s Inauguration

 

 

 

Latest

Safaricom Investment Co-operative Pays Out Sh142.4 Million

Safaricom Investment Co-operative shareholders have approved a ksh142.4 million rebate payout during the 15th Annual General Meeting.

Firms Announce Merger Deal to Expand Services

Dalberg Implement, a leader in on-the-ground program implementation with vast expertise in strategy execution, and Axum, an Afrocentric impact firm dedicated to fostering inclusive growth across the Global South, have announced a merger.

Odibets Launches Mega Water Project In Makueni

Odi Mtaani Foundation by online betting company Odibets, in...

Ivon Priscar Living Kenya’s e-Commerce Dream in Grocery Shopping

As Kenya's informal sector continues to thrive, companies like Kapu serve as catalysts for economic empowerment and resilience.

Follow Us

Newsletter

Don't miss

Throwing The Girls Into Deep End: Single Kiasi S3 First Look

Nairobi’s dating scene is about to get messy: Single Kiasi...

Win New Year Crossover Mugithi Tickets With Odibets

The event has attracted prominent Kikuyu musicians who will be headlining the event including Samidoh and Muigai wa Njoroge.

For Coloured Girls is Theatre Production of the Year

The play ‘For Coloured Girls (who have considered suicide/ when...

Tusker Oktobafest Rolls East African Cultures into One

From regional events across Kenya to inaugural gatherings in Uganda and Tanzania, and the Tusker Oktobafest grand finale in Nairobi, the festival harmonized traditions, celebrated diversity, and highlighted the rich cultural tapestry of the East African culture

Lupita’s Little Brother Junior Nyong’o Charting His Own Path in Acting

Junior Nyongó, who is also a musician and a DJ and now a graduate of UC San Diego with an MFA in Acting, is crafting his own solid path in the world of acting with roles in major theatre productions.

Safaricom To Power Tusker OktobaFest Beer Festival

Safaricom’s involvement in OktobaFest as a technology and payments partner will focus on fostering seamless in-festival connectivity, empowering the youth and Gen Z community through Safaricom Hook, and powering digital payments through M-PESA.

Music Producers Launch Organization To Streamline Recording Industry

Recording Industry of Kenya (RIKE) was launched on 9th October 2023. Registered in 2022 as a not-for-profit organization, RIKE aims to promote the collective interests of producers of sound recordings in the country.

Nairobi’s Hero Bar Listed Among World’s 50 Best Bars

World Best Bars: Hero Bar in Nairobi continues to climb the list, moving up six places to No.62 and Johannesburg’s Sin + Tax comes in at No.94. Dubai new entry Ergo is at No.69 and Melbourne’s Byrdi has re-entered the list at No.61.

Kenyan DJs Face Off In Smirnoff Battle Of The Beats Season 3

The Smirnoff Battle of the Beats Season 3, a DJ competition, is poised to unleash an unprecedented musical frenzy countrywide.

The Highs And Lows Of Betty Kyallo, Sisters Show As Season 2 Ends

Kyallo Kulture has always been, above all, about sisterhood, and in Season 2 we have witnessed the charm of it - the ups that gave us wholesome moments as the sisters led by Betty Kyallo spent time together.
MARTIN SIELE
MARTIN SIELEhttps://loud.co.ke/
Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke

Safaricom Investment Co-operative Pays Out Sh142.4 Million

Safaricom Investment Co-operative shareholders have approved a ksh142.4 million rebate payout during the 15th Annual General Meeting.

Firms Announce Merger Deal to Expand Services

Dalberg Implement, a leader in on-the-ground program implementation with vast expertise in strategy execution, and Axum, an Afrocentric impact firm dedicated to fostering inclusive growth across the Global South, have announced a merger.

Odibets Launches Mega Water Project In Makueni

Odi Mtaani Foundation by online betting company Odibets, in collaboration with the Betting Control and Licensing Board (BCLB), have launched a multi-million water project...

2 COMMENTS

  1. I hope the pending bills will include cases that government lost and awards were granted by the courts e g. Republic v Commissioner of Cooperative Development & another Ex-Parte Joyce Wanjiku Runyora & another [2017] eKLR http://kenyalaw.org/caselaw/cases/view/137547

    JOYCE WANJIKU & EVANSON MWAMACHI (suing on behalf of PREVAILING SAVINGS & CREDIT CO-OPERATIVE SOCIETY

    • To my understanding it includes awards from our courts against government, government agencies and government institutions

LEAVE A REPLY

Please enter your comment!
Please enter your name here