Samburu County Medium Term Debt Management Strategy 2018

Abstract

The debt management strategy paper provides clear objectives for debt management as well as a framework for achieving these objectives. The main objective is to ensure that the servicing and management of County Government financing requirements and payment obligations are met on timely basis and at the lowest possible cost over the medium to long run, consistent with a prudent degree of risk. In practical terms, County Government must not go into arrears when it assumes borrowing, decisions will not be made on an ad hoc basis, debt levels must be sustainable and affordable, and borrowed funds must be used to increase the wellbeing of residents of the County. The County has experienced debts arising from payment arrears (end-year pending bills), these are unpaid bills owed to suppliers of goods and services are deemed to be arrears –‘pending bills’, however, all pending bills are deemed to be arrears, as funds are not available to pay them off and so they have to be paid out of future budgets. As at the close of 2016/17 financial year, the County had Ksh. 743,436,856. There is need to ensure effective management of pending bills by aligning procurement plans to cash flow projections, adequate budgetary provision, strives to pay pending bills on a first come-first served basis and manage the record of pending bills. We need to ensure that all pending bills are confirmed with all the supporting documents such as invoices, contract numbers and project status.