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Treasury turns off cash taps for 17 counties over suppliers’ pay

By Lewis Njoka
Friday, December 13th, 2019
Acting National Treasury Cabinet Secretary Ukur Yatani. Photo/PD/File
In summary

The government has made good its threat to withhold the disbursement of funds to counties that have not settled pending bills owed to suppliers.

This follows an announcement by the National Treasury that it has disbursed funds to 30 counties that have either fully paid their pending bills, or have shown commitment to settling them, leaving out 17 counties that are yet to show effort towards clearing the money owed.

Treasury Cabinet Secretary Ukur Yatani announced that the government had released Sh11 billion to 18 counties that had presented acceptable plans on how they would settle outstanding bills.

Another Sh7.3 billion has been released to 12 counties that have fully paid their pending bills, according to Yatani’s statement dated December 11, 2019.

“I wish to inform the public and other stakeholders that we have released a total of Sh11 billion to the following 18 counties who presented clear and acceptable plans for settlement of validated pending bills,” said Yatani in a statement.

“We have also released a total of Sh7.3 billion to the 12 counties who had fully paid their pending bills as per the attached list,” he added.

Yatani had warned counties that had not settled debts owed to suppliers up to December 1 to pay up or miss out on the cash transfers from the national government.

Final disbursement

“The National Treasury released Sh65 billion to county governments by June 30, which was the final disbursement on the understanding that this will be utilised to pay pending bills,” the CS said while announcing the move.

As at the end of last financial year 2018/2019, the government owed suppliers a total of Sh96.1 billion.

Of the 12 counties that have fully settled their pending bills, Kilifi received the largest share at Sh1.04 billion followed by Kwale at Sh778 million. The other 10 counties received between Sh400 million and Sh700 million.

Of the 18 counties that have shown commitment to clearing their pending bills, Kiambu received the highest share at Sh943 million followed by Kitui at Sh883 million.

Nairobi, Lamu, Wajir, Mandera, Marsabit, Murang’a, Turkana, West Pokot, Samburu, Trans Nzoia, Nakuru, Kakamega, Bungoma, Busia, Siaya, Kisumu and Kisii counties are yet to receive any portion of their equitable share from the National Treasury owing to non-compliance with the government’s directive to settle pending bills.

Yatani’s announcement came shortly after the Council of Governors lodged a case at the High Court seeking to have him compelled to release the money to counties, saying the devolved units were on the verge of shutting down due to lack of funds.

“We don’t want a situation where it is seen that now the National Treasury is micro-managing counties,” said Council of Governors Chair, Wycliffe Oparanya, in relation to the lawsuit. 

The matter, before High Court Judge Weldon Korir, will be heard today.

Oparanya said some county workers have threatened to go on strike protesting delays in paying their November salaries.

Statutory deductions

“County governments have been unable to pay the most critical fiscal obligations including November salaries, statutory deductions and procured supplies,” the Kakamega Governor said in an earlier interview.

The law requires the National Treasury to disburse the counties’ share of revenue by the 15th day of every month. 

The total equitable share allocation to the counties this financial year 2019/2020 is Sh316.5 billion.

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