Why I Always Advise Businesses to Think Twice Before Trading with Government — It Could Cost You Everything
In Kenya today, thousands of suppliers, contractors and small business owners are sinking in depression under the weight of unpaid government tenders. What was once seen as a gateway to “big money” has, for many, has now turned into a financial trap.
Across various state departments and county governments, delayed payments have become the norm rather than the exception. The situation is often worse after changes in political leadership, especially in county governments, where pending bills are either ignored, delayed indefinitely or subjected to fresh unwarranted scrutiny.
The amount owed to these people runs into billions of shillings.
Behind these figures are real people... business owners whose livelihoods are collapsing. Some have had their property auctioned. Others have been blacklisted by the Credit Reference Bureau (CRB) after defaulting on loans they took to fulfill government contracts. Many are battling stress, depression and in extreme cases, some have even lost their lives due to debt-related pressures or by suicide.
The process often begins with hope.
A supplier wins a government tender, sometimes worth millions. To deliver, they take loans from banks or shylocks, confident that payment will come within the agreed timeline, often a few days to maybe three months.
But that is where the problem begins. Payments that should take two months stretch into six months, a year or never come at all. Meanwhile, the bank is calling. Interest is accumulating. Suppliers are pushed into panic mode. Slowly, pressure builds.
You start juggling debts. You delay other obligations. Creditors lose patience. Before you know it, auctioneers are at your door. Many suppliers have found themselves trapped in this cycle, with no clear way out.
At the heart of this crisis lies a toxic mix of bureaucracy and corruption.
Procurement and payment processes are riddled with endless paperwork, approvals and “follow-ups.”
Without political connections, navigating this system can feel like punishment. Worse still, if you are perceived to be aligned with a political rival, especially at the counties level, your tender can suddenly be declared “fake” or flagged for investigations, even after you have delivered goods or services.
In some cases, tenders are inflated due to kickbacks and under-the-table dealings. A contract worth Ksh. 5 million on paper may balloon to Ksh. 10 million in practice, but the genuine supplier is the one left struggling to recover their rightful payment.
The illusion is simple: government tenders mean big profits. The reality is different.
Many suppliers are now learning the hard way that chasing large government contracts can cost you your peace, your business and even your future. While you wait endlessly for millions, your life stalls. Your business operations freeze. Your reputation with lenders suffers.
Meanwhile, most business people ignore and overlook smaller, consistent business opportunities eg supplying to individuals or private companies because they are small and don't promise big money.
These days, more and more entrepreneurs are opting out of government tenders and contracts arguing that it is safer to build steadily rather than to gamble on government tenders. A business making Ksh. 5,000, Ksh. 10,000 or even Ksh. 20,000 consistently from private clients is often more stable than one chasing a Ksh. 1 million government tender that may never be paid. Private clients may offer smaller amounts, but they pay. And in business, cash flow is everything.
This is not just an individual problem. It is a systemic issue. Pending bills in counties and national government continue to pile up, affecting not just suppliers but the entire economy. When businesses collapse, jobs are lost, families suffer and economic growth slows down.
There is an urgent need for accountability, transparency and efficiency in public procurement and payment systems. Without reforms, the cycle will continue and more businesses will fall.
For those considering government tenders, the advice from those who have suffered losses is simple: Tread carefully. Do not rush into tenders blinded by the promise of big money. Understand the risks. Protect your business. Diversify your income streams. Because in Kenya today, the biggest deal is not always the best deal.
Sometimes, the safest path is the one that keeps your business alive.
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