CS Yatani directs Sonko to release funds due to NMS

Former Nairobi Governor Mike Sonko when he appeared before the County Public Accounts and Investments Committee on July 15, 2020.

Photo credit: File | Nation Media Group

Treasury Cabinet Secretary Ukur Yatani has directed Governor Mike Sonko to release funds due to Nairobi Metropolitan Services (NMS), ending months of an impasse over funding for the new agency.

Mr Yatani said Friday that a framework to guide the funding has been developed, paving the way for Sonko to transfer funds from the County Revenue Fund (CRF) account to NMS.

He explained that the National Treasury developed the required framework in line with requirements of the Deed of Transfer of Functions from Nairobi to the government.

The CS said the framework also takes into account constitutional and legal provisions as outlined in County Allocation of Revenue Act (CARA), 2020.

“The purpose of this letter, therefore, is to forward to you the framework and request you to ensure adherence to the requirements,” Mr Yatani said in a letter dated November 30, addressed to Sonko and NMS boss, Major-General Mohammed Badi.

The letter was copied to Attorney-GeneralKihara Kariuki, Controller of Budget Margaret Nyakang’o and NMS Deputy Director-General Kang’ethe Thuku.

Legal hurdle

The NMS has been unable to receive funding from the Nairobi County government for the four transferred functions of health, transport, public works, utilities and ancillary services, county planning and development services.

This has been as a result of the lack of a legal framework to allow the same and a notice of declaration of a dispute registered by Governor Sonko on July 24.

In September, CS Yatani declined Maj-Gen Badi’s request for Treasury to release funds to pay the 6,852 county staff over the same legal hurdle.

In his response, the CS said there was no legal framework to facilitate such a transaction and that the funds can only be remitted to the Nairobi County Government (NCCG) Revenue Fund Account, not to the NMS.

He pointed out that according to section 4 (2) of the CARA, each county’s allocation shall be transferred to the respective County Revenue Fund, in accordance with a payment schedule approved by the senate and published in the Kenya gazette by the CS.

This is in line with section 17 of Public Finance Management Act, 2012.

“The legal provisions therefore imply that the equitable share allocation due to the Nairobi City County Government, including monies for personnel emoluments, shall be transferred to NCCG Revenue Fund Account,” Mr Yatani said in the letter dated October 15.

He further explained that specific tenets of the law make it illegal to approve such a transaction since there existed an unresolved dispute between City Hall and NMS on matters budgeting, oversight of NMS funds and secondment of staff to NMS.

Challenges addressed

In the latest letter, Mr Yatani said the legal challenges have been addressed by the framework, with Sonko now free to release the funds.

The county chief had also declined to sign the Sh37.5 billion county government’s budget, contesting allocation of Sh27.1 billion to NMS. And even when the Nairobi City County Appropriations Bill, 2020 was gazetted, he refused to sign warrants to authorise release of the budgeted funds.

However, the CS has said every legal and constitutional provision pertaining to the funding of NMS, in accordance with Article 187(2)(a) of the Constitution, Article 5.1 and 5.2 of the Deed and CARA section 7(1)(2) and (3), has been adhered to.

The timing of Mr Yatani’s letter, immediately after Sonko’s impeachment by the county assembly, gives credence to reports that the battle for the control of Nairobi's billions was at the heart of his woes.