Public health agencies reduced their pending bills by a combined Sh30.51 billion in the year to June 2026, easing the debt burden on hospitals and other suppliers.
Analysis of data by the Controller of Budget (CoB) shows that outstanding bills by health-focused State corporations and semi-autonomous government agencies (SAGAs) fell to Sh23.61 billion in June this year, down from Sh54.12 billion in June 2025.
The bulk of this decline came from the insurance fund, with outstanding bills falling by Sh34.35 billion to Sh7.16 billion under the Social Health Authority (SHA), down from Sh41.51 billion under the National Health Insurance Fund (NHIF) in June last year.
The SHA replaced the NHIF on 1 October 2024, with the government taking over the task of settling the defunct insurer’s outstanding claims. Shortly after SHA was launched, the Ministry of Health released Sh9 billion to address outstanding NHIF bills. The ministry later said it paid Sh8.6 billion towards NHIF debts between September and December 2024.
The government has continued to pay the inherited claims. In the 2025/26 financial year, the government allocated a further Sh4 billion to settle verified NHIF bills owed to contracted healthcare facilities.
‘In terms of public debt management, the National Treasury should strengthen and implement debt reduction strategies by accelerating fiscal consolidation through the progressive reduction of the fiscal deficit,’ Controller of Budget Margaret Nyakang’o said.
‘This will ensure that annual borrowing requirements are consistent with the targeted debt trajectory, while also strengthening domestic revenue mobilisation to address persistent revenue shortfalls.’
Dr Nyakang’o urged the State to prioritise the pending bills in the current fiscal year.
‘Further, verified pending bills should be settled on a first-in, first-out basis and adequately budgeted for in the financial year 2026/27, as well as in the medium-term budget framework, in line with Regulation 56(2b) of the Public Finance Management (National Government) Regulations 2015.’
The accumulation of unpaid bills has remained a challenge for government agencies, putting pressure on suppliers, contractors and service providers who depend on timely payments to sustain their operations.
Kenyatta National Hospital (KNH) recorded the steepest increase, with its outstanding bills rising by 135 percent to Sh6.56 billion from Sh2.79 billion in June 2025.
The Kenya Medical Supplies Authority (Kemsa) increased its unpaid bills by 58 percent to Sh4.39 billion from Sh2.78 billion, while Moi Teaching and Referral Hospital (MTRH) increased its unpaid bills by 24 percent to Sh2.14 billion from Sh1.72 billion.
This shows that MTRH added Sh420 million to its outstanding obligations during the year, while KMTC accumulated an additional Sh420 million, taking its pending bills to Sh1.32 billion from Sh900 million.
The Kenya Medical Research Institute (Kemri) held pending bills of Sh2.05 billion, which was largely unchanged from the previous year; however, Sh1.45 billion of this amount included penalties.
Dr Nyakang’o noted that the increase at Kemsa is significant because the agency supplies medicines and other health products to public health facilities.
According to the CoB, Kemsa’s order turnaround time improved to 27.9 days in the 2025/26 financial year, down from 69 days in 2024/25, though still above the agency’s target of 10 days.
The National Treasury increased the budget for the health sector by Sh29.73 billion to Sh164.92 billion for the 2025/26 financial year, up from Sh135.19 billion.