Counties are staring at muted economic activities following delays in Treasury disbursement that have disrupted their finances.
The Nation has learnt that the devolved units are owed about Sh60 billion in equitable share. Of that amount, Sh8.2 billion is owed to 11 counties for the January allocation. The affected counties are Baringo, Kwale, Lamu, Migori, Nairobi, Nakuru, Samburu, Tana River, Turkana, Uasin Gishu and West Pokot.
Some 31 counties are owed Sh22.1 billion in allocations for February, while all the counties have yet to receive their March share of Sh29.6 billion.
This means counties are unable to pay for drugs, water and electricity, and run development projects in critical areas such as improving maternal healthcare, building and maintaining roads, sponsoring youth empowerment projects and funding construction of polytechnics and early childhood education centres.
Suppliers and contractors have also not been paid as pending bills continue to pile up. As a result of the impasse, counties have been also unable to advertise tenders for development projects.
By law, counties are entitled to at least 15 per cent of the government’s audited revenues. The law provides for timely disbursement of the equitable share of revenue generated by the national government.
The 2012 Public Finance Act mandates the National Treasury to disburse money to the units at the beginning of every month and not later than the 15th day from the start of the fiscal quarter. It also emphasises that disbursement be made in accordance with a schedule prepared by the Treasury in consultation with the Intergovernmental Budget and Economic Council.
The Council of Governors (CoG) is now contemplating seeking legal redress, saying delayed disbursement is hurting county services.
CoG chairman Martin Wambora said that though the current fiscal year will end in three months, the Treasury has only disbursed Sh154 billion of the total allocation of Sh370 billion, translating into 58 per cent of this year’s total allocation to the counties.
Mr Wambora, who is the governor of Embu, said cash-strapped counties are struggling to stay afloat and ensure critical services are not affected. Some counties have been served with strike notices by health workers.
For instance, in Kirinyaga, workers had yet to get their pay for two months. They say they are struggling to pay their bills.
“The delay in disbursements has greatly prejudiced delivery of services in counties,” Mr Wambora said in a letter to Treasury Cabinet Secretary Ukur Yatani.
Laikipia Governor Ndiritu Muriithi said delayed disbursements mean pending bills will continue to accumulate. He urged the Treasury to develop innovative ways of releasing the cash, warning that further delays would slow down economic activity.
The governors have also protested against the delay in passing the County Governments Grants Bill, 2021, which has further aggravated the situation in the counties as they have yet to receive conditional allocations for this financial year.
But even as they protest, 13 counties are undermining devolution by spending virtually all the resources they get on salaries and allowances while ignoring development projects, Controller of Budget (CoB) Margaret Nyakang’o has said.
The devolved units, a majority of which are led by first-term governors, have been faulted as what they spend on salaries and allowances is 100 times more than what they invest in activities that could improve people’s lives.
The CoB added that the 13 counties’ contribution to national revenue remains frustratingly low. In a CoB report detailing how counties utilised funds between July and December last year, Vihiga, Samburu, Nyandarua, Lamu, Wajir, Machakos, Busia, Meru, Garissa, Nandi, Siaya, Murang’a and Kajiado counties are ranked as the worst performers, with low amounts of own-source revenue, while, ironically, spending well over 80 per cent of their revenues on recurrent activities.
