Budget chief picks out 22 counties over high wage bi*l
Despite steps taken to boost development and spur economic growth in county governments, the devolved units continue to frustrate the efforts by prioritising recurrent expenditure over development.
Controller of Budget (CoB) Margaret Nyakang’o has said in a new report that some 22 counties spent a whopping Sh90.73 billion of the Sh159.52 billion allocated to them on wages and benefits in the first half of current fiscal year.
From the 47 devolved units 22 county governments were above the allowable limit of 35 per cent of budget allocation for wages and benefits.
Total expenditure
The counties include Nairobi, Machakos, Nandi, Meru, Kisii, Embu, Nyamira, Kisumu, Nyeri, Taita/Taveta, Homa Bay, Bungoma, Tharaka –Nithi, Bomet, Elgeyo/Marakwet, Wajir, Kiambu, Kitui, Vihiga, Mandera, Garissa and Kirinyaga.
According to the report, spending in 2021/22 period compared to Sh78.85 billion in a similar period during the financial year 2020/21. The increase accounted for 56.9 per cent of the total expenditure and 35 per cent of the first half proportional revenue of Sh258.83 billion.
On the other hand, the devolved units spent a mere Sh25.93 billion on development projects, representing an absorption rate of 13.5 per cent of the county governments’ cumulative annual development expenditure budget of Sh192.29 billion.
This is representing a drop in absorption rate of 13.7 per cent, reported in a similar period of the 2020/21 first half when development expenditure was Sh25.19 billion.
Public Finance Management (County Governments) Regulations, 2015 sets a limit of the county government’s expenditure on wages and benefits at 35 per cent of the county’s total revenue.
“Section 107(2) (b) of the Public Finance Management (PFM) Act, 2012, provides that over the medium term, a minimum of thirty per cent of the County Government’s budget shall be spent on development programmes,” the COB report reads in part.
The growth in recurrent expenditure comes despite the counties failing to meet their revenue generation targets.
During the first half of the budget year the county governments generated a total of Sh14.06 billion, falling short of the Sh57.80 billion target leveraged on them.
This represented a 24.3 per cent collection against an expected performance of 50 per cent of the annual target in the first half of financial year 2021/22.
In the first half of financial year 2021/22, the total county governments’ budgets approved by the County Assemblies amounted to Sh517.65 billion comprising Sh192.29 billion (37.1 per cent) allocated to development expenditure and Sh325.37 billion (62.9 per cent) for recurrent expenditure.
Revenue collection
Nyakang’o said in the report that due to the under-performance of own-source revenue collection, some planned activities may not be implemented during the financial year as budgets will not be fully financed.
