Counties face development meltdown as Treasury withholds Sh33bn

Counties are staring at a major development meltdown.  The National Treasury has not released Sh33 billion normal allocation to the devolved units for the just concluded financial year.

This is the amount of funding that the government is supposed to send to the 47 counties as per the County Allocation of Revenue Act, 2019.

According to development experts in the counties, this delay in disbursement will result into slow pace of development, culminating into a major cash crunch.

The County Allocation of Revenue (Amendment) Bill, 2020 signed by President Uhuru Kenyatta states that money set aside for each county must be disbursed.

“Each county government’s equitable share of revenue raised nationally on the basis of the revenue sharing formula approved by Parliament in accordance with Article 217 of the Constitution in respect of the financial year 2019/2020 shall be as set out in Colum D of the First Schedule,” read part of the Act signed by President Kenyatta into Law.

However, in March, the government indicated that it was planning to reduce funding to the counties due to the outbreak of the coronavirus pandemic.

ANNUAL BUDGETS

Following the delay, this has forced some of the counties to adopt a wait and see attitude before passing their annual budgets.

The government has disbursed all its recurrent expenditure for the last financial year to the counties which is mostly used for paying salaries to staff.

The chairperson of County Assemblies Forum and the Speaker of Nyandarua County Assembly Ndegwa Wahome said the delay will have major economic repercussions at the counties.

“Although we cannot say the national government has failed because even our people have no purchasing power which enables counties to collect revenues and basic taxes, what the government needs to do is reduce non-essential activities and concentrate on the fight against the spread of covid-19,” said Mr Wahome.

One of the counties facing a financial crisis is Nakuru County as the assembly is yet to table its 2020/2021 budget for approval.

“There is a major stalemate and that is why we have not been able to table the budget for approval because the Treasury has not sent the last batch of the 2019/2020 development funds to Nakuru County which is about Sh995million,” said Peter Mbae who is Kabazi Ward an MCA and a member of the budget committee.

Dr Mbae called on President Kenyatta to intervene and help save the counties’ development agenda from collapsing.

Efforts by the Nation to reach National Treasury and Planning Cabinet Secretary Ukur Yatani were futile as he did not pick our calls or respond to text messages.

“If there was plan to reduce the funding to the counties the government through the Treasury should have sought amendments through an Act of Parliament which they have not done so far,” said Dr Mbae.

A source at the Nakuru County told the Nation that the Treasury advised the county to manage the development projects with the little resources that they have.

“The National Treasury has refused to commit itself in writing on the stalemate because it knows it is illegal and the verbal directives they are making to the counties to spend money from other sources is not anchored in law,” said Dr Mbae.

SH995 MILLION DEFICIT

Dr Mbae revealed that if Nakuru County Assembly tables its current budget without development funds, it will start the financial year 2020/2021 with a Sh995 million deficit in its development kitty.

“This will adversely affect development in all the 55 wards as all pending bills for the current projects which have not been settled will be paid from the current budget funding and the 2020/2021 development projects will badly be affected,” said Dr Mbae.

The Ward Representative revealed that owing to the outbreak of the coronavirus pandemic, Nakuru County already has a massive revenue collection deficit of Sh745 million.

“If you add Sh995 million and Sh745 million it totals to almost Sh2 billion which is supposed to go to the ward fund kitty to all the 55 wards per year and it means in the 2020/2021 financial year there would be no new development projects for the more than 2 million residents of Nakuru County,” said Dr Mbae.

He added: “This year is crucial to most MCAs across the country as they had hopes of consolidating their development agenda as next year the election mood will grip the country.”

“The National government must respect the law and release the money for development.”

“The government should not hide under Covid-19 as it has received billions of shillings from partners to cushion Kenyans against the effects of Covid-19 and that is where money should come from instead of tampering with development funds for the counties,” said Dr Mbae.

He added: “The 47 counties never got the Covid-19 money from the donors and only the national government received such funding.”

Dr Mbae said if the government is unable to send the development money to the counties, it should tell Kenyans not to expect any development in the counties this year.

“Residents in all the 55 wards in Nakuru County have high expectation of upgrading of roads, water, and other infrastructural development in the new financial year yet there is no hope of getting the funding from the national government,” said Dr Mbae.