Governors demand release of Sh13bn equalisation cash

Council of Governors chairperson Ann Waiguru flanked by some of the Governors

Council of Governors chairperson Ann Waiguru flanked by some of the Governors. 

Photo credit: Jeff Angote | Nation Media Group

Governors have demanded the release of Sh13.8 billion for various projects being rolled out in marginalised counties, accusing the National Treasury of frustrating their completion and handover.

The county chiefs said some 112 projects, financed by the Equalisation Fund, are yet to be handed over to the devolved units despite being completed over pending bills.

Appearing before the Senate Committee on Finance and Budget, Council of Governors Vice-Chairperson and Wajir Governor Ahmed Abdullahi said a number of projects in 14 counties have either stalled or have not been handed over due to the pending bills.

Mr Abdullahi explained that Sh54 billion had been proposed for allocation to marginalised areas under the first policy of the Equalisation Fund, but only Sh26.2 billion was approved by Parliament, out of which only Sh12.4 billion has been released.

The amount was released to ministries departments and agencies (MDAs) where 352 projects were identified in the 14 marginalised counties. The projects included provision of water, roads, health facilities and electricity.

“You find hospitals shut for the last five years and are of no use to the public. This is because the contractors are yet to be paid by the MDAs implementing the projects,” said the governor. “The Exchequer is in blatant disobedience of the constitution. ”

The Commission on Revenue Allocation (CRA) also questioned why the Treasury was withholding the funds yet all the administrative and regulatory hurdles that had been bedevilling the fund have been sorted out.

CRA Chief Executive Officer James Katule said the commission is concerned over the existence of the projects and their level of completion.

He added that there is a dispute over the ownership of the projects, with MPS and the national government both claiming ownership.

“We have the board and the regulations in place. Now we have to ensure that the balance is released and what has been implemented is paid for,” said Mr Katule.

CRA Vice-Chairperson Koitamet Ole Kina echoed Mr Katule’s sentiments, accusing Treasury of going against the constitution.

“We are done with the second marginalisation policy and we are on the third one but all will not make sense if the policies are not being implemented,” said Commissioner Isabel Waiyaki.

Equalisation Fund Chief Executive Officer Guyo Boru, appearing on behalf of Treasury Cabinet Secretary Njunguna Ndung’u, said funds have been released to the MDAs for payment of pending bills for the first policy projects.

“We have released the funds and we are waiting for a report on the status of the projects on March 31. We will get to know how far they are on the issue of payment of the pending bills as they are well resourced. There is nothing holding them from our side,” said Mr Guyo.

On the balance of Sh13.8 billion, he said they had budgeted for the same in the financial year ending June 2024, only for the National Assembly’s Budget and Appropriations Committee to slash the allocation by Sh3.2 billion.

He said in the recent supplementary budget, the Exchequer included Sh6.8 billion being the budget for the financial year ended June 2022 and Sh7.8 billion for the financial year ending June 2024.

“We are committed to release all the funds once they are appropriated. But we cannot release funds based on what counties are entitled to but on what has been appropriated,” said Mr Guyo. “Between 2020 and 2021, the fund was in limbo but now that all the instruments are in place, the funds will now flow immediately.”

Migori Senator Eddy Oketch said: “We need to add a clause into the Bill to compel the Exchequer to release the money owed to counties because counties are not getting the real value the projects were intended for. We have to put a stop to this.”