This archive report was first published on 17 November 2019.
Kenya is facing a severe cash crunch, with the government freezing all development projects and asking state agencies to remit their dues.
According to a circular issued by Head of Public Service Joseph Kinyua on Monday, all arms of government were reminded to remit the Pay As You Earn (PAYE) and pensions for their staff without fail.
The circular, which is the second in four months, also placed a moratorium on all capital expenditures until further notice, with the exception of ongoing projects that have been specifically approved in writing by the National Treasury.
“Further a moratorium is hereby issued placing in abeyance all capital expenditures until otherwise directed. SEE ALSO:New measures will make payment of tax refunds swift and hassle freeDuring the moratorium period, no capital expenditure is to be undertaken unless the capital expenditure is an ongoing project and is specifically approved in writing by the National Treasury,” reads the directive.
The government is also piling pressure on its parastatals to clear all the debts it owes suppliers and State organs and agencies are required to operate with prudence and financial discipline now more than ever.
According to Kinyua’s directive, the Treasury is expected to submit a report of the amounts remitted, indicating State corporations and agencies that would not have complied with the directive.
Clear all bills They only have two weeks to clear all the pending bills.
“That the first charge on all exchequer releases, be the payment of outstanding payments due and owed to suppliers. All pending bills that have been cleared for payment be made immediately and not later than November 30,” reads the circular.
On Friday, the Treasury received Sh18.7 billion from the Kenya Ports Authority (KPA) as special dividends to the exchequer, the highest amount paid ever by a parastatal.
“Yes we handed the said sum yesterday. KPA was able to not only pay its main shareholder a return in investment but also remit the highest among parastatals, we are proud,” said KPA Managing Director Daniel Manduku.
The government is also going for money held by State corporations to alleviate the situation as it struggles to finance its operations.
