Treasury disburses Sh30b to counties on eve of Senate debate
Anthony Mwangi and Hillary Mageka
The government yesterday moved to avert a cash crisis in the counties by disbursing Sh29.7 billion to the devolved units on the eve of debate on the controversial revenue sharing formula.
The government’s move came as more senators voiced their opposition to the proposed revenue sharing formula which will see allocations to less populated, marginalised counties reduced while the share of those with bigger populations will increase.
Today’s debate has taken a regional dimension with four more senators whose counties stand to benefit vowing to vote against the formula in solidarity with colleagues from their home areas whose units could lose revenue if the disputed formula is passed (see separate story).
Yesterday, Treasury Cabinet Secretary Ukur Yatani said the government had resolved to disburse the close to Sh30 billion which it had held from the previous financial year as “balance of sharable revenue of the financial year 2019-2020”.
Speaking to People Daily after meeting Attorney General Kihara Kariuki, Senate Speaker Ken Lusaka and the Controller of Budget Margaret Nyakang’o, Yatani said they had agreed to cushion the counties while awaiting the outcome of the Senate debate this afternoon.
“We agreed to release their undisbursed balance of the last financial year immediately. Sh29.7 billion will be released to counties by tomorrow [today],” the CS said.
The announcement, which comes at a time operations in the 47 counties had almost ground to a halt, was immediately welcomed by Machakos Governor Alfred Mutua who said it would go a long way in helping counties pay salaries and establish structures to fight the Covid-19 pandemic.
“This is something we had discussed during the summit with the President. The government agreed that it would release the money so that we are able to pay salaries, to buy sanitisers, to buy ambulances, to pay electricity for our health facilities especially at this time of Covid-19,” said Mutua.
“It is good the money is being released, this is our money, we seriously need it,” he added.
Yatani explained that to further shoulder the financial burden counties are bearing in light of reduced incomes as a result of the pandemic, the national government will invoke a Supreme Court decision which allows Treasury to release up to 50 per cent of the last financial year’s allocation if senators fail to resolve the impasse in the revenue sharing formula.
“On disbursements for this financial year, we wait for the Senate outcome. If the stalemate takes long, we will refer to a previous Supreme Court decision,” he told People Daily.
Nairobi Senator Johnson Sakaja, who is leading opposition to the third basis formula which places more weight on population than land mass, also welcomed Treasury’s move to release the money, saying it was long overdue.
“The Sh29 billion he (Yatani) is talking about belongs to the county governments, he should not have withheld it in the first place.
Under the Division of Revenue, the Treasury is obligated to disburse money to the counties, it is not a favour,” he added.
The CoB, on her part, said yesterday’s meeting agreed that counties should get the balance of the last financial year.
“In principle we agreed that the counties should get the balance of last financial year.
But there are a few technical issues that may come on the way, which may be bypassed or overruled but I don’t know how it will work out,” said Nyakang’o.
She said the National Treasury will have to do something extra, insisting that her office had no problem as long as everything is put in order.
“As it is right now, the onus is with the Treasury to release the money,” Nyakang’o told People Daily, adding that Sh 29.7 billion is a lot of money and should keep counties going for July and August to pay salaries.
On the stalled passage of the County Allocation Revenue Act (CARA), the COB boss said senators will deliberate on it tomorrow (today) and arrive at a decision.
“We told them what will open up everything including the balances, without any complication, is for them to agree on the Division of Revenue Act (DORA) and we have the CARA and counties will get balances even from last year.
“There was no agreement that counties should get up to 50 per cent as the AG asked for more time to get technical and legal issues around it,” she added.
According to the advisory by the Supreme Court, The National Assembly will be required to authorise the withdrawal of money from the Consolidated Fund in the event an impasse occurs between it and the Senate over the Division of Revenue bill in the future.
The apex court in an advisory opinion said the move will safeguard the functionality of county governments while affording Parliament an opportunity to resolve the deadlock through mediation.
The opinion was prompted by the Council of Governors who last year sought opinion of the Supreme Court over the Division of Revenue bill.
The apex court said the percentage of money to be withdrawn shall be based on the equitable allocation to the counties in the Division of Revenue Act for the preceding financial year, which translates to 50 per cent of total equitable share.
The money shall be included under separate votes for the several services in respect of which they were withdrawn.
County assemblies will, however, be expected to re-adjust their respective budgets and appropriation bill accordingly.
Assuming that 50 per cent of the total equitable share allocated to counties in the preceding year exceeds the total equitable share proposed in the Division of Revenue bill, then the percentage to be withdrawn from the Consolidated Fund shall not be less than 15 per cent of all revenue collected by the national government.
And addressing a press conference last evening, the chair of the Commission of Revenue Allocation (CRA), Dr Jane Kiringai, reiterated that should the Senate fail to break the impasse, counties will receive 50 per cent of the cash allocated to them in the previous year pending a solution.
“It’s very important that this whole process paves the way to bring the country together.
But in the law there is no vacuum and last year if you recall, the court pronounced itself on this matter; that if there is no County Revenue Allocation Act, counties can access 50 per cent of the previous year’s allocation,” she said.
