The Kenya National Chamber of Commerce and Industry now wants the Treasury to establish a Sh10 billion project account to pay medium- and small-scale government suppliers.
This was in response to Madaraka Day presidential directive that all central and county departments clear all pending bills that have no audit queries by June 30, 2019. According to the chamber’s chief legal researcher Kiragu Chege, trade is a key economic driver to be left to public declarations.
“We should have forward moving policies that govern how the government deals with its suppliers. Owing to the current high pending bills, the national economy is suffering collapse of entrepreneurship, employment opportunities and depressed cash flows,” he said.
He said the account will ensure funds to pay suppliers are available at all times once audit processes have been completed.
The account should be a joint project of the Treasury, Controller of Budget and Auditor General so as to bring together pending bills under one monitoring platform.
Mr Chege said the account deposits to be determined by national and county budget making processes should be subject to annual review depending on the majority procurement burden of the financial year under review. Further, it wants pending bills policy overhaul so as to cushion the Micro, Small and Medium Enterprises (MSMEs) from cash crunch over delayed payments.
The president said continued withholding of the payments was impacting negatively on the private sector adding that when suppliers go for months without payments for goods and services delivered, the economy suffers down to the grassroots. Mr Chege said prompt payments guarantee contribution to the GDP in terms of national revenue and income, providing market linkages and intermediating the supply of goods and services. He said high pending bills have contributed to slow growth in the GDP, which was 4.90 per cent as at the close of 2018.
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