As the government prepares the 2025-2026 national budget, a rights organisation has gone to court demanding a freeze on the process until the state clears over Sh600 billion in unpaid bills.
The petition was filed by Operation Linda Jamii, which says the debts have crippled suppliers and caused long-term economic harm.
Through its representative, Frederick Ogola, the group is urging the High Court to stop further budget-making until all pending payments from June 2005 to June 2022 are cleared.
The organisation argues that the debt burden has devastated many suppliers and small businesses.
Ogola painted a grim picture in court, saying many suppliers are struggling to recover from loans taken to fund government projects.
"Thousands of contractors are still repaying bank loans for work they did years ago. Some have sold off their property or fallen into depression trying to stay afloat," he said.
Justice Grace Nzioka is handling the case and has ordered that all respondents, including the Treasury and the Attorney General, file their replies before April 25.
The petition reveals that Sh516 billion is owed by the national government and Sh182 billion by county governments.
It warns that the situation threatens the future of many Micro, Small and Medium Enterprises (MSMEs), who depend on prompt payments to stay in business.
"The country is staring at a serious economic problem. The formation of a committee to audit these bills, without transparency or clear timelines for payment, is a delay tactic. The court must intervene," Ogola submitted.
The case also questions the legitimacy of the audit committee appointed by President William Ruto in September last year.
According to the lobby, the committee lacks openness and is unlikely to succeed where others have failed.
In court documents, Operation Linda Jamii accuses the Treasury of misleading the public.
The group criticises the Budget Policy Statement released in February for ignoring the outstanding bills, while promising MSME support through the Hustler Fund.
"There is a serious contradiction by the 2nd Respondent in the Budget Policy Statement dated 13th February 2025," the petition states.
"While the Treasury claims MSMEs are a top priority, it has not shown any commitment to paying what it owes them."
The petitioners also say that the government's shift to accrual-based accounting is being used to cover up the real size of the problem and delay payments to contractors and suppliers.
The court heard that past efforts to verify and settle these debts have failed repeatedly, with most committees blaming political interference or lack of resources.
Ogola asked the court to take over the process and monitor payments directly.
"The appointment of the recent audit committee is just another smokescreen," Ogola said.
"We want the court to supervise the verification and payment process directly to ensure accountability."