The Governors are against a proposed law called the Prompt Payments Bill, 2023 which aims to penalize public officers who fail to pay contractors and suppliers on time.
The Bill suggests a fine of Sh5 million or a five-year jail term for the officers who do not pay their dues to contractors. The Bill intends to establish a legal framework for the timely payment of goods, works, and services supplied by government entities.
The increasing pending bills have led to cash flow problems for contractors and small businesses, causing some to shut down.
However, the Council of Governors believes that punishing procurement or finance officers would be unjust, particularly in the counties.
They argue that delayed payments are often due to factors beyond the officers’ control, such as delayed disbursement of funds by the National Treasury. They propose that the penalty for interest should be set at Sh500,000 or one year in jail.
“We need a clause to tame outgoing officers, including governors, from causing problems to incoming officers,” he said.
“You cannot jail an accounting officer earning less than Sh300,000 monthly with an Sh5 million fine or five years in prison.
“Even jails are not meant to punish but it’s a corrective measure. The penalty should not be too punitive but it should be a deterrent for non-payment. Sh500,000 sounds like a good penalty.” Kisii Governor Simba Arati said
The Bill applies to all procurement transactions by national and county governments. It also states that if an accounting officer fails to pay the amount due without reasonable cause or negligently, they commit an offence.
The committee believes that the proposed Sh5 million fine and five-year jail term will deter public officers from failing to pay their dues on time.
“This punishment will introduce good manners. This puts an absolute condition on public officers who are involved in procurement mischief and fail to pay contractors,” Migori Senator Eddy Oketch.
The Bill proposes that a person wishing to enter into a contract with a government entity shall make a declaration of any pending payments owed to a small or micro-enterprise.
The Bill further suggests vendor segmentation, where payments to small and medium enterprises should be made within 30 days and 90 days for large contractors.
