Sh100b delay pushes counties to the edge
Counties risk having their operations grounded following a delay by the national government to disburse close to Sh100 billion in form of equitable share and conditional grants for the current financial year.
Governors are now expressing fears that they may not realise their five-year development objectives, with only four months to elections unless the government disburses the funds immediately.
The People Daily has established that the National Treasury owed the regional governments Sh59.97 billion inequitable share, and a further Sh39 billion for conditional grants as of March 24, 2022.
The delay has ignited fears among governors that unless the cash is released immediately, services in counties could be crippled, thereby politically injuring those seeking re-election.
Outstanding amounts in equitable share are Sh29.6 billion owed to all the 47 devolved units for the month of March alone, Sh22.1 billion owed to 31 counties for February and Sh8.2 billion owed to 11 counties for January.
Grants include Sh7.205 billion to facilitate leasing of medical equipment, IDA (World Bank) for Kenya Climate Smart Agriculture Project (Sh7.8 billion), Sh6.4 billion (World Bank credit) dubbed National Agricultural and Rural Inclusive Growth Project, IDA—Water and Sanitation Development Project.
Other grants are World Bank Credit (Sh5 billion), Kenya Devolution Support Programme (KDSP) Performance (“level 2”) (Sh4.6 billion), World Bank—Kenya Informal Settlement Improvement Project II (Sh2.8 billion), Sh2.2 billion (World Bank credit) for transforming Health Systems for Universal Care Project and Agricultural Sector Development Support Programme (Sh1.3 billion).
The national government, according to sources within the Council of Governors (CoG), has blamed low revenue stream for the delay in the disbursement of the equitable share.
On the other hand, the national Treasury blames a stalemate between Senate and National Assembly, over the creation of the County Governments Grants Bill 2021 for the delay to release conditional grants.
The County Governments Grants Bill 2021 provides a legal framework for the release of conditional allocations financed from loans and grants from development partners.
Laikipia Governor Ndiritu Muriithi, who is also the CoG Finance, Planning and Economic Affairs Committee chairperson, yesterday said the delay has plunged counties into a financial crisis, whereby the devolved units are unable to meet their obligations.
Muriithi says governors might find themselves returning unspent cash to the National Treasury because unless the billions of shillings is released now, there will be no enough time to spend it.
“We have a crippling drought that requires the counties to run emergency activities like buying relief food which we cannot, because of cash flow problems. We are weeks to the closure of the financial year, meaning even if the money was to be released now, it might not be fully utilised, considering that we are in an electioneering period,” Ndiritu told People Daily yesterday.
The governor said CoG has consistently raised concerns over the delay to release funds which the Ukur Yatani-led ministry has also blamed on poor flow of revenue .
But the county chief says the excuse is flimsy, and accused the national government of not being so keen on devolution matters.
“The law says that counties should get 15 per cent or more of the national revenue, meaning, if the Sh100 billion has been collected, Sh15 billion should be sent to counties. What the national government ought to do is to prioritise the needs of the counties,” the governor added.
Kirinyaga Senator Charles Kibiru who is the chairman of the Senate House Finance and Budget Committee said his committee has reached out to Yatani demanding that the equitable share be “released immediately.”
“This is a very serious issue. We have talked to the Treasury and even raised it in the form of a statement without any success. By delaying the release of the equitable share, we are breaking the law. That is impunity because once the money has been allocated, it should be disbursed immediately,” Senator Kibiru told People Daily by phone.
The delay to release the conditional grants, which includes donor fundings, has been necessitated by a row pitting the two Houses, over the enactment of the law as directed by Justice Antony Makau , after senators rejected amendments by the National Assembly.
Senators have argued that the changes defeated the principal objective of the Bill, which was to deal with the question of disbursement of conditional grants to counties.
The Bill, which was sponsored by the Senator Kibiru-led committee, proposes to allocate county governments conditional allocations amounting to Sh7.537 billion from the national government share of revenue raised nationally and Sh32.343 billion as conditional allocations financed from loans and grants from development partners, by allocating the funds to support specific national policy objectives to be implemented by County Governments.
Last week, the committee met key stakeholders to deliberate on the contents of the Bill in a bid to end the stalemate.
“The court pronounced itself clearly that there should be a law to guide the disbursement, but counties have continued to suffer because its formation is now a subject of contestation between the two Houses,” Ndiritu said.