Kenya Meets 95% of Revenue Targets as Pending Bills Hit Kshs. 524 Billion – CoB Report

The Office of the Controller of Budget (CoB) has released its review of the national government’s budget implementation for the 2024/25 financial year, revealing improved revenue performance but persistent fiscal challenges, including a sharp rise in pending bills.

According to the report presented to the National Assembly’s Budget and Appropriations Committee, the government collected Kshs. 3.99 trillion against a target of Kshs. 4.21 trillion, achieving 95 per cent of its revenue goal compared to 89 per cent in the previous financial year. Tax revenue remained the backbone of financing, contributing 57 per cent of receipts, while domestic borrowing accounted for 27 per cent.

Despite the stronger performance, the fiscal deficit remained high at Kshs. 1.70 trillion, largely financed through domestic borrowing of Kshs. 1.20 trillion and external loans worth Kshs. 501 billion. This reliance, the CoB warned, continues to raise debt servicing costs, with Kshs. 1.59 trillion already directed to public debt repayment.

Exchequer releases to both the national and county governments totaled Kshs. 3.99 trillion, representing 95 per cent absorption of revised budget estimates. County governments received Kshs. 418 billion, including arrears from the 2023/24 fiscal year.

However, pending bills remain a major concern. By June 30, 2025, outstanding bills stood at Kshs. 524.8 billion, up from Kshs. 516.2 billion the previous year. State corporations accounted for 77 per cent of the total, with the remainder owed by Ministries, Departments, and Agencies. The report cautioned that the growing arrears continue to strain liquidity for businesses, particularly small and medium enterprises.

The CoB further raised concerns over the government’s heavy use of Article 223 of the Constitution to authorise unbudgeted spending. During the year, Kshs. 83.9 billion was approved under Article 223, with Kshs. 66.5 billion disbursed for expenditures ranging from road projects and medical staff arrears to international campaigns. The report noted that many of these expenditures were foreseeable and should have been included in the regular budget.

In her recommendations, Controller of Budget Dr. Margaret Nyakang’o urged the National Treasury to fast-track the verification and settlement of eligible pending bills, strengthen planning to reduce reliance on emergency spending under Article 223, and ensure budget adjustments do not cut into already incurred expenses.

The report also flagged weak monitoring of performance by some ministries and a continued delay in implementing Equalisation Fund projects, which left Kshs. 6.8 billion unutilised despite allocations to marginalised counties.

“While revenue mobilisation has improved, fiscal discipline remains critical to restore confidence in public financial management and ease pressure on the economy,” Dr. Nyakang’o said in the report.