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Proposed penalties for pending bills welcome
COG finance committee Chair, Kakamega County Governor Fernandes Barasa and Kisii County Governor Simba Arati while appearing before the Senate Committee on Finance and Budget to deliberate on the prompt payment bill. PHOTO | LUCY WANJIRU | NMG
Proposals to amend the law and impose a fine of up to Sh5 million for delayed payment to public sector suppliers are proper and could save many businesses from financial distress.
We do not support county governors who are opposed to the fine, terming the penalty punitive.
These proposals, including settling supplier dues within 60 days, are timely coming at a time when contractors across the country are increasingly being subjected to delayed payments for their goods and services.
Some of the payments for pending bills won’t come through for months or even years, which is bad for businesses because it locks up capital for suppliers, pushing them into untold financial distress.
Official data show pending payments to suppliers by the national government are worth more than Sh481 billion.
It is only proper that firms pay for supplies made to them for the sake of business continuity and growth of the overall economy.
A persistent rise in pending bills chokes the economy by limiting liquidity flow and profitability of firms doing business with the State or private sector.
Therefore, governors should practise financial prudence by ensuring they have cash for budgeted supplies instead of opposing the fines.
