Government pledges to clear Sh150 billion, ease pressure on suppliers

The government has committed to paying Sh150 billion in verified pending bills before the end of the year, in a move aimed at easing the financial burden on suppliers and strengthening the private sector.

President William Ruto made the announcement during a meeting with the leadership of the Kenya National Chamber of Commerce and Industry at State House, Nairobi on Friday.

He said the Pending Bills Verification Committee had confirmed that suppliers are owed Sh230 billion, and of this, Sh150 billion will be paid.

According to the President, 90% of the funds will go to micro, small, and medium enterprises.

"Going forward, bidding and awarding government tenders will be done online," President Ruto said, as he explained that digital procurement, which took effect on April 1, 2025, would stop government entities from committing to purchases without approved budgets.

The President noted that pending bills had created serious financial stress for businesses, especially small firms that depend on government contracts.

He said the shift to online procurement was meant to bring transparency and accountability.

While addressing the business leaders, the President called on the private sector to take a leading role in driving national growth by working closely with the government.

He said such partnerships would help in creating jobs, building local industries, and increasing the country’s development pace.

"This will enhance enterprise profitability and the country's progress," said President Ruto.

He also encouraged members of the Kenya National Chamber of Commerce and Industry to focus on growing savings among small businesses.

He said that savings could help small firms finance their growth without turning to high-cost loans.

"I want to encourage the private sector to facilitate savings to use it as an alternative when investing," he added.

The President said the government was taking a new approach to development by using innovative funding methods instead of borrowing.

He said the Sh300 billion spent on affordable housing, fresh produce markets, and institutional housing had not been borrowed.

“It’s encouraging that all the companies working in the Affordable Housing Project are Kenyan-owned companies,” he said.

Ruto also asked the Chamber of Commerce and Industry to support government efforts to revive the sugar sector. He said the government was finalising the process of leasing all state-owned sugar mills to private operators.

"The government has no business running the sugar mills. They can be efficiently managed by the private sector," he said.

During the meeting, the Chamber’s President Erick Rutto welcomed the government’s move to zero-rate Value Added Tax on tea packaging materials.

He said this would encourage value addition and make Kenyan tea more competitive globally.

"I want to thank the government for introducing zero-rated Value Added Tax on tea packaging materials. This will encourage farmers to produce more for export," Rutto said.

Trade, Investment, and Industry Cabinet Secretary Lee Kinyanjui said his ministry was working closely with the Chamber to attract investors and create more business opportunities across the country.