CS Mbadi Outlines Measures to Curb Pending Bills as 2026/27 Budget Projects KSh 3.53 Trillion Revenue

 The Cabinet Secretary for the National Treasury, Hon. John Mbadi, has assured Parliament that concrete steps are being taken to halt the accumulation of pending bills by Ministries, Departments, and Agencies (MDAs), while progressively addressing the existing backlog.

Speaking before the National Assembly’s Budget and Appropriations Committee to present the 2026 Budget Policy Statement (BPS), CS Mbadi acknowledged the long-standing challenge of unpaid bills, emphasizing a structured and sustainable approach to resolve the issue.

“The pending bills have accumulated over the years. This is not something we are going to sort out today because resources are limited, and we cannot stop the country from moving while we are still settling pending bills,” he said.

CS Mbadi noted that the immediate focus is on preventing new arrears while paying off existing ones in an orderly manner. “What we are doing first is to stop the accumulation of further pending bills. But those that have accumulated over the years, we will have to pay them, but in a standard manner so that they also don't disrupt services,” he added.

Committee members raised concerns over selective payment practices. Hon. Mathias Robi (Kuria West) questioned why newer contractors are sometimes paid ahead of those awaiting payment for years.

“The problem we are facing is that someone is given a contract today and will be paid, leaving people who were contracted like seven years ago. Why can't you solve those earlier pending bills first?” he asked.

In response, CS Mbadi admitted there had been weaknesses in the payment process, including selective settlement of invoices. He urged support for the Treasury Single Account (TSA), which, he said, would prioritize payments based on invoice age and reduce institutional discretion.

“The TSA will enhance transparency and ensure payments are made systematically, prioritizing older invoices and reducing discretion at the institutional level,” CS Mbadi explained.

2026/27 Revenue and Expenditure Projections

On the broader fiscal framework, CS Mbadi informed the committee that total revenue, inclusive of Appropriation in Aid (AIA), is projected at KSh 3.5337 trillion, equivalent to 16.9 percent of GDP for the 2026/27 financial year.

Revenue is expected to comprise:

• Ordinary revenue: KSh 2.9019 trillion (13.9% of GDP)

• Appropriation in Aid: KSh 631.8 billion

Total expenditure and net lending are projected at KSh 4.7039 trillion (22.5% of GDP), including:

• Recurrent spending: KSh 3.456.9 trillion (16.5% of GDP)

• Development expenditure: KSh 749.5 billion (3.6% of GDP)

• Transfers to County Governments: KSh 495.5 billion

• Contingency Fund allocation: KSh 2.0 billion

The fiscal deficit, including grants, is expected to slightly decline to KSh 1.1158 trillion (5.3% of GDP) from KSh 1.1407 trillion (6.0% of GDP) in FY 2025/26. CS Mbadi said the deficit will be financed through net external borrowing of KSh 225.5 billion and net domestic financing of KSh 890.4 billion.

The Budget and Appropriations Committee is compiling its report on the BPS, drawing from submissions by stakeholders and Departmental Committee Chairpersons. The report is expected to be tabled in the National Assembly for debate later this week.