Counties are finally set to receive Sh42 billion in grants after President William Ruto signed into law a Bill allowing the Exchequer to disburse the funds.
The County Governments Additional Allocations Act 2022 provides a legal framework for the National Treasury to release the much-needed funds due to counties.
The delay in passage of the Bill has been holding back the release of the funds, with the Treasury pointing to a lack of enabling legislation.
The Senate passed the Bill on November 22 before referring it to the National Assembly for consideration. The National Assembly considered the Bill on November 30, 2022 and passed it on December 1, 2022 without amendments.
“I have transmitted the Bill to His Excellency the President for assent,” said Senate Speaker Amason Kingi.
The new law makes provisions for the transfer of conditional allocations from the national government’s share of revenue and from development partners to the county governments.
It provides a legal framework for release of additional funding from the national government and loans and grants from the development partners to the 47 devolved units in the financial year ending June 2023.
Governors have been pleading with Parliament to approve the Bill to unlock the funds, saying the impasse was hampering service delivery.
Initially, the grants were captured in the Division of Revenue Bill, which divides revenue generated nationally between the national and county governments.
However, the High Court, in a case filed by the Council of Governors, ruled that the funds be separated, saying only equitable shares should be captured in the Division of Revenue Bill (DoRB).
The Bill was first introduced for first reading in the 12th Parliament but the life of the August House lapsed before it was signed into law.
Governors had warned that continued delay of the legislation will affect many projects and programmes funded by donors.
In the Act, some Sh5.6 billion has been allocated to the devolved units for construction of county headquarters and medical equipment leasing programme.
The law also allocates Sh13.47 billion to some 34 counties as equalisation fund, comprising Sh6.62 billion meant for the financial year ending June 2022 and Sh6.85 billion for financial year ending June 2023.
Another Sh454 million has been allocated to Tana River, Tharaka-Nithi and Nyandarua counties that are yet to complete construction of their headquarters.
The Act also allocates counties Sh23.7 billion from loans and grants from development partners. Another Sh5.2 billion has been allocated to all the 47 devolved units for the managed equipment service programme.
It also allocates Sh3.56 billion from World Bank for National Agricultural and Rural Inclusive Growth Project and Sh1.99 billion, also from the World Bank, for Kenya Climate Smart Agriculture Project.
There is also Sh5.9 billion from World Bank for Water Sanitation Development Project and Sh667 million from Danida for primary healthCare.
The World Bank has also provided Sh1.19 billion for emergency locust response, Sh2.7 billion for informal settlements improvement project and Sh5.43 billion for locally-led climate change programmes.