Counties shutdown looms in showdown between governors and Treasury

County governors have warned of a looming shutdown in basic services if the National Treasury fails to disburse billions owed to devolved units by this Friday (June 18).

While addressing journalists in Nairobi, Embu governor and Council of Governors (CoG) chair Martin Wambora accused Treasury of continually violating the law and failing to comply with its own cash disbursement schedule. 

"It is imperative for Kenyans to understand that financing counties by the Treasury is not a favour but a constitutional obligation. The taxpayer at the counties is also entitled to timely service delivery," Mr Wambora said in a statement issued Monday.

Counties say the national government owes Sh102.6 billion, being the balance left after the division of Revenue Act 2020 allocated Sh316.5 billion to counties. 

Governors now say they are unable to meet statutory obligations and fiscal responsibilities including timely pay of staff salaries due to the delay.

"Operations at the national government continue uninterrupted owing to timely financing from Treasury while counties are slowly grinding to a halt. This should not be tolerated by those who support the success of devolution in Kenya," he added.

Pending bills

Governors also claim they cannot comply with Treasury Secretary Ukur Yatani's directive to clear pending bills amounting to Sh11.5 billion without getting funds from the government. 

"If Treasury released the resources outstanding, county governments would be able to clear most of the eligible pending bills, pay salaries on time and remit statutory deductions."

In his budget speech last week, CS Yatani said he would seek Parliament’s approval to temporarily stop funds to county governments that have consistently failed to pay their suppliers. He said that delays in payment of government bills to suppliers had led to liquidity problems at a time when most companies are suffering from the effects of the Covid-19 pandemic.