State to pay young suppliers promptly

James Momanyi @jamomanyi

The government plans to pay young suppliers of goods and services under the Access to Government Procurement Opportunities (AGPO) scheme directly in the next financial year.

National Treasury will undertake the exercise as one measure to cut the red tape that delays payments to the group. Cabinet Secretary Henry Rotich made the pledge yesterday when put to task by more than 2,000 young women who gathered in Nairobi to ventilate the various challenges faced by the youth, women and Persons living with Disabilities (PwDs) when accessing various government funds.

Rotich said National Treasury is working with Central Bank of Kenya (CBK) and Kenya Revenue Authority (KRA) to align the Integrated Financial Management Information System (IFMIS) to ring-fence the new payment model to ease the pain of delayed payments. Such delays have even seen some companies auctioned or placed under Credit Reference Bureau (CRB) for non-payment of financial commitments to lenders and suppliers.

“I agree there are issues with payments. We have put it in law that suppliers must be paid within 90 days but we know some procurement entities still claim they have not received money from the exchequer and delay payments further, sometimes even by one year,” Rotich said. “But we are working with CBK and KRA to align the IFMIS and have a single account at the Treasury to pay AGPO beneficiaries directly at source.”

The CS said procurement entities in government will be required to tell the ministry who to pay after they have verified and certified the delivery of what was procured. “We will then pay directly from Treasury single account so that we address the challenges of payment delays,” Rotich said.

The CS said that since the AGPO programme was established in October 2013, it has so far registered 82,158 youth, women and PwDs enterprises and disbursed Sh65 billion. Out of this Sh29.1 billion has gone to some 28,067 youth enterprises tenders, Sh33.9 billion to 30,205 women entities and Sh1.8 billion to 6,674 PwDs.

The National Treasury boss also said that the government is in the process of scrapping the Youth Fund, Women Enterprise Fund and Uwezo Fund and instead establish one single fund – Biashara Fund – that will co-ordinate and provide funding to all the disadvantaged groups.

Further to paying the AGPO beneficiaries from a single account, the government also intends to introduce an insurance guarantee to young providers of services and goods to government to further cushion them against delay of payment and also reduce the maximum payment period from 90 days to two months. “The insurance cover will guarantee all companies under AGPO are paid by the insurance when the payment period lapses,” Rotich said.

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