NAIROBI, Kenya Mar 2 – National Treasury Cabinet Secretary John Mbadi, has assured the National Assembly’s Budget and Appropriations Committee that firm measures have been put in place to halt the continued accumulation of pending bills by Ministries, Departments, and Agencies (MDAs), even as the government works toward settling the existing backlog.
Appearing before the committee to present the 2026 Budget Policy Statement (BPS), the CS acknowledged the long-standing challenge of unpaid bills and emphasized the need for a structured, sustainable approach to address it.
Responding to concerns raised by Committee Chairperson, Samuel Atandi (Alego Usonga) over the rising volume of pending bills across Ministries, Mbadi admitted that the problem has built up over several years.
“The pending bills have accumulated over the years. This is not something we are going to sort out today because resources are limited and we cannot stop the country from moving while we are still settling pending bills,” said Mbadi.
He explained that the immediate priority is to prevent the accumulation of new arrears while progressively clearing the outstanding ones in an orderly manner.
“What we are doing first is to stop the accumulation of further pending bills. But those that have accumulated over the years, we will have to pay them, but in a standard manner so that they also don’t disrupt services,” he added.
In a supplementary question, Mathias Robi (Kuria West) questioned the criteria used in settling pending bills, expressing concern that newer contractors appear to be paid ahead of those who have waited for years.
“The problem we are facing in this country is that someone is given a contract today, and they will be paid, leaving people who were contracted like seven years ago. Why can’t you solve those earlier pending bills first?” asked Robi.
In response, the CS acknowledged weaknesses in the payment process, citing selective settlement of invoices as a contributing factor.
“I think there has been cherry picking of invoices. That’s why I would ask this committee to support the Treasury Single Account because you will be requesting payment based on the age of the invoice, and once you request, you will just pay for what you requested for, as opposed to previously, when most institutions were asking for payment and once they get the money, they pay other invoices,” responded Mbadi.
The Treasury Single Account system, he noted, would enhance transparency and ensure payments are made systematically, prioritizing older invoices and reducing discretion at the institutional level.
2026/27 Revenue and Expenditure Projections
On the broader fiscal framework, the CS informed the committee that total revenue, inclusive of Appropriation in Aid (AIA), is projected at KSh 3.5337 trillion in the 2026/27 financial year, representing 16.9 percent of Gross Domestic Product (GDP).
The revenue projections comprise:
• Ordinary revenue of KSh 2.9019 trillion (13.9 percent of GDP); and
• Appropriation in Aid of KSh 631.8 billion.
Total expenditure and net lending are projected at KSh 4.7039 trillion (22.5 percent of GDP) in FY 2026/27.
The expenditure breakdown includes:
• Recurrent spending of KSh 3.456.9 trillion (16.5 percent of GDP);
• Development expenditure of KSh 749.5 billion (3.6 percent of GDP);
• Transfers to County Governments amounting to KSh 495.5 billion; and
• An allocation of KSh 2.0 billion to the Contingency Fund.
The fiscal deficit, including grants, is expected to decline slightly to KSh 1.1158 trillion (5.3 percent of GDP) in FY 2026/27, compared to a projected deficit of KSh 1.1407 trillion (6.0 percent of GDP) in FY 2025/26.
“The FY 2026/27 fiscal deficit will be financed through net external borrowing amounting to KSh 225.5 billion and net domestic financing of KSh 890.4 billion,” briefed CS Mbadi.
The Budget and Appropriations Committee is currently compiling its report on the BPS, drawing from submissions by stakeholders and Departmental Committee Chairpersons. The report is expected to be tabled in the National Assembly for debate later this week.
