Kenyan government suppliers are not paid because corruption exhausts state coffers

NAIROBI (Reuters) – The Kenyan government is not paying its contractors on time, corruption draining funds for legitimate state projects.

Late payments also hit the financial sector, where unproductive loans jumped this year to their highest level in more than a decade.

The alleged link between bribery and non-bribery the payment of government bills was made explicit in May, when dozens of officials and businesspeople were accused of having participated in the theft of nearly $ 100 million in public funds.

They are accused of using forged invoices to charge for fake suppliers.

Asked about the difficulties faced by entrepreneurs, Finance Minister Henry Rotich admitted that late payments by the state posed a problem.

"This is a problem we are obviously tackling, it is important that we guarantee prompt payment both to the national government and the county government," he told Reuters

. payments must be made within 60 days of delivery of the goods or services, he added.

President Uhuru Kenyatta is committed to eradicating corruption when he was first elected in 2013, but critics say that he has been slow to prosecute senior officials and the ministers

. lose one-third of one's state budget to corruption every year. The government has denied the number.

TOO TROUBLE?

Many small and medium-sized Kenyan companies bid for government contracts because the state is the country's largest country.

But some have decided that financial pain accompanies late payments on everything from public relations campaigns. Five entrepreneurs who have contracts with the government say that they and others have been blacklisted by credit bureaus after falling behind on loan repayments or defaulting payments.

"No bank wants to finance you specifically if you have a government contract," said a small business owner who spoke on condition of anonymity.

A second provider said, "You are disturbed in the middle of (the contract). Either because you are not talking to the right people, making commitments to the right people, or your payments are likely to be bad. 39, be delayed. "

George Muiruri, chief executive of Leakey's auctioneers, says restsessio The number of government providers has increased. "They are financially stranded," he said, adding that he was treating at least one case a day.

The governor of the central bank, Patrick Njoroge, said in late May that late payments to suppliers, the volume contracted by the government, accounted for 10% of the total volume of bad debts.

These loans accounted for 12.4% of the total April, the highest level for more than a decade

The central bank's monetary policy committee lowered its key rate by 50 basis points in March , believing that economic growth was well below potential. John Stonestreet)