Concerns raised on ability of counties to absorb funds
The revelation by President William Ruto on Monday that county governments are yet spend Sh50 billion allocated to them has raised concerns about the ability of the devolved units to absorb monies in a timely manner.
These concerns arise even as the county governments are set to receive Sh44.7 billion to fight the ravages of climate change.
On Monday, the devolved units received the first tranche amounting to Sh7.2 billion from the Climate Resilience Investment Grants to go towards mitigating effects of climate change at ward level.
“As I speak to you there is Sh50 billion lying at the Central Bank. My request to you is, please spend this money. And now I am going to add you more money. So, my request to you is let us make sure that we roll out our programmes, we spend these resources,” Ruto said on Monday on the first day of the 2023 Africa Climate Summit.
Ruto said the Sh7.2 billion to counties for county climate change investment grants issued during the just concluded Africa climate summit at Kenyatta International Convention Centre (KICC)together with Sh3 billion of county own-resource allocations, will finance local climate action.
Samuel Nyandemo, a senior economics lecturer at the University of Nairobi said there is need for the national government to develop a policy to guide the counties in utilising the climate change funds.
He said the major challenge bedeviling the devolved units at the moment is institutional capacity building where many counties are yet to develop and strengthen skills on issues of climate change as well as identification and implementation of development projects.
“The counties do not have the necessary policy interventions that will guide to which areas this money is to be put into and what are the expected outcomes after this money has been spent,” Nyandemo said. “We must have policy guidelines developed by the national government that must trickle down to counties. The National Development Plan must be developed so that the counties can use it as a roadmap towards dealing with issues of climate change,” he added.
Churchill Ogutu, a senior research analyst at IC Group, said that there ought to be specific programmes in the counties to which the climate change funding is directed.
He noted that the ability of the counties to absorb the monies will to a large extent depend on the specific programmes being rolled out and if they have capacity in that particular area.
“Are there projects that have been specified? It’s all bout programme capacity. Like, there is some identified projects that will be funded by the Sh44.5 billion that is coming in to counties,” Ogutu said.
County Governments have consistently been accused of poor budget absorption amid huge development needs in the devolved units.
A Budget Implementation Review Report for the First Quarter of Financial Year 2022/2023 released by the Controller of Budget December 2022 showed that at least 20 counties did not report any expenditure on development activities due to the challenges in setting up new county administration after the August elections.
Earlier in July 2022, a report by the Controller of Budget revealed that some 19 counties had spent less than 20 per cent of the money allocated for development nine months into the 2021/2022 financial year. During the first year, counties experienced numerous challenges in execution of their budgets which were poorly formulated.
Controller of Budget
Together with other stakeholders under the Kenya Governors Strategic Execution Support (KEGOSES) programme, the Office of the Controller of Budget through the guidance of the Controller of Budget carried out training of the County Executive Committee Members on Devolution and Public Participation, Planning and Budgeting, Budget Execution, Public Finance Management and Monitoring and Evaluation.
The Office has also reviewed all county budgets and advised the counties on formulation of good budgets to enhance budget execution.