Expert proposes enactment of 'Public Payment Timelines Act' to cushion contractors, suppliers

Ms Melisa Achieng, an advocate of the High Court of Kenya, argues that the Controller of Budget should be empowered to levy fines for late payments to enforce adherence.

Law expert Melisa Achieng during an interview with AVDelta News on November 10, 2025. Photo/Gastone Valusi

A legal expert has called for the introduction of legislation setting strict deadlines for settling outstanding invoices at both county and national government levels, to protect contractors and suppliers from financial ruin.

Ms Melisa Achieng, an advocate of the High Court of Kenya, argues that the Controller of Budget should be empowered to levy fines for late payments to enforce adherence.

“A Public Payment Timeliness Act would guarantee settlements within defined periods, grant the Controller of Budget authority to penalise delays, and set up a Pending Bills Fund or Guarantee Scheme to shield contractors. What’s more, the County Governments Act could be bolstered by tying fund releases to proof of cleared invoices,” Ms Achieng remarked.

She explained that most counties are grappling with unpaid bills owing to sluggish revenue gathering, lax financial oversight, budgetary shortfalls, and misdirected spending.

“Time and again, counties put fresh schemes or staff wages ahead of honouring existing debts. Political meddling and dodgy procurement practices have only piled on the arrears,” Ms Achieng added.

She highlighted how these overdue payments choke cash flow for small and medium-sized businesses reliant on prompt settlement, leaving contractors to sack staff, fall behind on loans, or close their doors altogether.

“On a national scale, this drags down economic expansion, swells bad debts, and undermines faith in public tendering,” the legal specialist told AVDelta News in an interview on Monday.

She urged counties to carry out thorough audits and validations of all outstanding bills, draw up a clear repayment priority list, and tighten fiscal controls to stop the pile-up recurring.

Counties ought also to ring-fence development budgets, shift procurement online, and rigorously apply swift-payment rules as laid down in the Public Finance Management (PFM) Act, she insisted.

Ms Achieng noted that the Controller of Budget could require quarterly compliance updates, block drawdowns for non-essential spending where arrears persist, and propose penalties for accounting officers flouting the PFM Act--on top of publicising county payment timetables to boost transparency.

Failure to clear pending bills, she warned, risks costly lawsuits that drain yet more public money, the freezing of county accounts, and critical findings from the Auditor-General.

Contractors, she advised, may send a formal demand to the County Secretary or Chief Officer for Finance, lodge a complaint with the Public Procurement Administrative Review Board, pursue a civil claim in court, appeal to the Senate or Controller of Budget, or alert the Ethics and Anti-Corruption Commission (EACC) if foul play or fund diversion is suspected.

Under the Public Finance Management Act and the Leadership and Integrity Act, Ms Achieng stressed, a governor carries ultimate political and administrative responsibility.

Chronic non-payment or misuse of funds could trigger personal liability, impeachment proceedings, or criminal probes for neglect of duty, she concluded.

This legislation, as proposed by legal expert Ms Achieng, would establish strict deadlines for settling pending bills at national and county government levels, empower the Controller of Budget to impose penalties for delays, and create a fund to support affected contractors.

However, it remains a recommendation rather than enacted law.

For now, Kenya still relies on some existing frameworks to try to address timely payments issue. The Public Finance Management Act (PFM Act, 2012) requires public entities to pay verified bills within 30–90 days, depending on the type, with provisions for interest on late payments (up to 2pc per month). The Controller of Budget monitors compliance and can recommend sanctions.

Also, Public Procurement and Asset Disposal Act (PPADA, 2015) mandates prompt payments in public contracts, with penalties for non-compliance, including suspension of procuring entities.

There are also ongoing initiatives. In June 2025, the government announced plans to clear Sh229 billion in verified pending bills dating back to 2005, via a Pending Bills Verification Committee.

By September 2025, the Controller of Budget reported that delays had accrued Sh25.3 billion in interest penalties, borne by taxpayers, highlighting the issue's persistence.

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Pending bills: Expert proposes enactment of 'Public Payment Timelines Act' to cushion contractors, suppliers