The Cabinet has approved the settlement of verified government pending bills worth KSh23.74 billion, offering relief to thousands of suppliers and contractors who have waited years for payment, with some claims dating back to 2005.
In a statement following its meeting at State House, Nairobi, on Friday, October 9, 2026, the Cabinet said the payments would cover 28,726 verified bills of KSh50 million and below, representing 98 per cent of the 29,257 claims recommended for settlement.
The claims were reviewed by the Pending Bills Verification Committee, which received 115,617 claims valued at KSh664.8 billion. Following verification, 29,257 claims worth KSh155.34 billion were recommended for payment.
The National Treasury will oversee the implementation, with priority given to micro, small and medium-sized enterprises, particularly businesses owned by women, young people and persons with disabilities.
The government said the payments would ease cash-flow challenges, protect jobs and restore confidence among businesses supplying goods and services to public institutions. Verified claims exceeding KSh50 million will be settled progressively.
In the health sector, the Cabinet endorsed an ambitious hospital infrastructure programme aimed at expanding access to specialised treatment and easing congestion in referral facilities.
The plan includes the construction of a new 2,000-bed Moi Teaching and Referral Hospital and a 1,000-bed Level Six hospital in Mombasa.
Additionally, 13 Level Five hospitals in Mandera, Marsabit, Turkana, Kilifi, Embu, Nakuru, Laikipia, Migori, Nyamira, Baringo, Bomet, Narok and Kisii counties will each be expanded by 300 beds.
The Cabinet also approved an additional KSh8 billion healthcare programme in partnership with France to establish and equip specialised head and neck surgical units at Kenyatta National Hospital, Moi Teaching and Referral Hospital and the University of Nairobi Dental Hospital.
The initiative will also support cancer treatment and the training of 5,000 community health workers.
Kenya is targeting an additional 5.1 million household electricity connections by 2030 under the Kenya National Energy Compact approved by the Cabinet.
The plan seeks to mobilise approximately KSh2.47 trillion in investments to expand electricity access, support businesses and promote industrial development.
Separately, the Cabinet endorsed a KSh1.1 billion electric cooking programme targeting the adoption of 100,000 electric cooking appliances in Nairobi, Kiambu, Machakos and Kajiado counties.
The programme is intended to promote cleaner cooking methods and reduce household exposure to harmful smoke.
The Cabinet has approved an additional KSh12.83 billion to facilitate the completion of Thwake Multipurpose Dam, which is expected to supply 150,000 cubic metres of water daily to approximately 1.3 million people.
The project will benefit communities in Makueni and Kitui counties, including Wote town and surrounding areas, as well as Konza Technopolis.
Beyond supplying water, the dam is expected to support irrigation and future hydropower generation, strengthening food production and regional economic development.
The government has also cleared three strategic road corridors under the Roads for Rural Economic Development Programme.
They include the 253-kilometre South Rift–Lake Region Gateway Corridor, the 256-kilometre Great Highlands Connectivity Corridor and the approximately 400-kilometre Lake Victoria Ring Road.
The projects are expected to improve connections between agricultural production areas, fishing communities and trading centres, reducing transport costs and improving access to markets.
In a major intervention for the national carrier, the Cabinet approved USD350 million in shareholder financing to help Kenya Airways meet urgent financial obligations, including aircraft maintenance and the return of grounded planes to service.
The funding will be released in tranches under National Treasury oversight, with a repayment period of up to 10 years and the possibility of conversion into equity, subject to the necessary approvals.
The Cabinet also endorsed a proposal to convert KSh122 billion in existing government loans, plus accrued interest, into an equity-qualifying tradable instrument to strengthen the airline’s balance sheet and support future capital raising.
The measures form part of the airline’s long-term turnaround plan. The government noted that Kenya Airways contributes more than USD1.3 billion annually to the country’s gross domestic product through tourism, trade and regional connectivity.
The Cabinet adopted the Sessional Paper on Transforming Education, Training and Research, paving the way for reforms targeting improved learning outcomes and better employment opportunities for young Kenyans.
The proposed reforms will strengthen Competency-Based Education, address teacher shortages, expand technical and vocational training, and align education with labour market demands.
The Cabinet also adopted the National Insurance Policy, 2026, seeking to make insurance more affordable and accessible, particularly for farmers, informal sector workers and small businesses.
With insurance penetration standing at 2.45 per cent, the policy proposes stronger consumer protection, tighter regulation of insurers, measures to combat fraud and the expansion of digital insurance services.
To improve construction safety, the Cabinet approved the Architectural and Quantity Surveying Practitioners Bill, 2026, which proposes tougher action against unqualified practitioners.
The proposed law provides for penalties of up to KSh2 million or two years in prison for false registration or licensing.
It will replace the 1934 law, introduce mandatory annual practising licences and empower a new regulatory board to inspect construction sites.
The proposed regulatory framework will also extend oversight to landscape architects, interior designers and construction project managers.
Meanwhile, the Geographical Indications Bill, 2026, and the Warehouse Receipt System (Amendment) Bill, 2025, were approved to strengthen farmers’ earnings and protect Kenyan products against imitation.
The warehouse receipt reforms are expected to improve storage, reduce post-harvest losses and allow farmers to use stored produce as collateral for credit.
The Cabinet also reviewed the country’s preparedness following a single imported Ebola case involving a patient who has since died.
According to the Cabinet statement, enhanced surveillance, screening, contact tracing and health facility preparedness measures remain in place.
The government maintained that the case remains isolated and urged Kenyans to remain calm, stay vigilant and follow official health advisories.
Other decisions included proposed reforms to the prisons and probation systems, measures to simplify business licensing, and support for establishing a European Bank for Reconstruction and Development office in Nairobi.
The Cabinet also endorsed double taxation agreements with Belgium and the Czech Republic, alongside space cooperation arrangements with South Africa and Kazakhstan.
The wide-ranging decisions reflect the government’s stated priorities of clearing outstanding obligations, expanding public services, improving infrastructure and creating a more supportive environment for businesses and investment.
