The Cabinet has approved the settlement of verified government pending bills worth Sh50 million and below, paving the way for the payment of Sh23.74 billion to thousands of suppliers and contractors, some of whom have waited for more than two decades to receive their money.
The payments will cover 28,726 verified bills, representing 98 per cent of the 29,257 claims recommended for settlement following a review by the Pending Bills Verification Committee.
The government in a dispatch dated October 9, 2026 said the decision would provide relief to businesses struggling with delayed payments for goods and services delivered to public institutions.
“ The payment of 28,726 verified bills totalling Sh23.74 billion, representing 98 per cent of the 29,257 recommended for settlement, will bring long-awaited relief to thousands of suppliers and contractors, some owed money since 2005,” the statement said.
The approval follows a comprehensive verification exercise in which the committee received 115,617 claims valued at Sh664.8 billion.
Following the review, 29,257 claims worth Sh155.34 billion were recommended for settlement, narrowing the number of claims eligible for payment from the much larger pool initially submitted.
The National Treasury will oversee the implementation of the decision and coordinate the release of funds to successful claimants.
The government expects the payments to ease cash-flow constraints affecting businesses that have continued to meet their contractual obligations despite delayed payments from public entities.
According to the statement, the settlement is intended to help protect jobs, support business operations and restore confidence among suppliers and contractors dealing with the government.
“ The National Treasury will oversee implementation, releasing much-needed funds to businesses struggling with delayed Government payments, easing cash-flow pressures, protecting jobs and restoring confidence among suppliers and contractors,” the statement said.
Micro, small and medium enterprises (MSMEs) will receive priority consideration, particularly businesses owned by women, young people and persons with disabilities.
The focus on smaller enterprises is expected to direct the payments towards businesses that may have limited financial reserves to sustain operations while waiting for government debts to be cleared.
However, the approval does not cover all the verified claims recommended for settlement. The government said pending bills exceeding Sh50 million would be paid progressively, indicating that suppliers with larger claims will have to await subsequent payments.
“The remaining verified bills exceeding KSh50 million will be settled progressively, ensuring that larger claims are also addressed,” the statement said.
The latest decision also builds on the government’s earlier clearance of pending bills worth more than Sh80 billion in the roads sector.
That settlement formed part of broader efforts to address outstanding government payment obligations, which have tied up funds owed to contractors and other service providers.
The latest approval provides a framework for settling thousands of additional claims, although the statement did not specify the timeline for completing the payments or provide a breakdown of the beneficiaries by government department.
It also did not indicate when suppliers with claims exceeding Sh50 million would begin receiving their payments.
The National Treasury’s implementation of the Cabinet decision will therefore be central to determining when successful claimants receive the funds.
For businesses that have waited years for payment, the settlement offers the prospect of recovering money owed for completed work and delivered services, while the progressive clearance of larger claims remains pending.