Auctioneers hit firms claiming Sh32bn

Economy

Auctioneers hit firms claiming Sh32bn

Sunday, April 7, 2019 22:33

By DAVID MWERE

Contractors are finding it difficult to meet their obligations including loan repayments as unpaid bills rise to Sh32.5 billion as at November.

The Treasury revealed the national government unpaid bills to Parliament, exposing the State contractors to auctioneers.

The late payments are in turn hitting the financial sector, where non-performing loans jumped in February to new highs.

Central bank governor Patrick Njoroge said last month that delayed payments to suppliers, the bulk contracted by the government, was the driver of the bankers’ bad loans.

The bad loans stood at 12.8 percent of the total in February, one of the highest level in more than a decade, up from 12.0 percent in December

“This reflected delayed payments by both public and private sector entities, and slow uptake of housing units,” Dr Njoroge said.

The government had drawn up new regulations requiring payments be made within 60 days of goods or services being supplied. But this yet to fully take effect.

Many Kenyan small and medium-sized businesses bid for government contracts because the State is the biggest spender in the country. There is also a slot for the youth and women.