Relief as Sh25bn is released to counties
National Treasury Cabinet Secretary Ukur Yatani.
What you need to know:
- The governors said Treasury owes them Sh97 billion in delayed disbursements for the 2020/21 financial year and threatened to take legal action and shut down the counties.
The CS assured the counties of additional funds, citing the general improvement of the economy and the positive revenue performance since December.
The National Treasury has disbursed Sh24.6 billion of equitable shareable revenue to counties with a promise of additional disbursement in due course.
The development comes just a week after National Treasury Cabinet Secretary Ukur Yatani hinted at a broke government, saying it was unable to fund counties on time. It also comes after the Council of Governors (CoG) accused Treasury of undermining devolution.
The governors said Treasury owes them Sh97 billion in delayed disbursements for the 2020/21 financial year and threatened to take legal action and shut down the counties.
In a press statement, Mr Yatani said yesterday that, with the disbursement, the total balances for various county governments now held at the Central Bank amount to Sh61.4 billion.
“We appeal to the county governments to make full and timely use of these funds,” he said, even as he challenged governors to prioritise the settlement of pending bills and other statutory dues.
The CS assured the counties of additional funds, citing the general improvement of the economy and the positive revenue performance since December.
“The National Treasury will prioritise disbursements to county governments because of their critical obligations of service delivery to the citizens,” he said.
In his statement last week, the CS had revealed that disbursements to the counties had fallen behind by two months, a situation he blamed on the effects of the Covid-19 pandemic and the containment measures the government put in place to combat the pandemic. Usually, devolved governments receive their equitable share every month through a cash disbursement schedule developed by Treasury and approved by the Senate.
The law stipulates that the money must be received on the 15th day of every month.
Before the latest disbursement, Treasury had disbursed a total of Sh133 billion out of the Sh340 billion counties received in this financial year as equitable share (Sh316.5 billion) and conditional grants (Sh23 billion). In total, counties are supposed to receive Sh369 billion, but the difference — Sh30 billion — is conditional grants advanced by multi-lateral agencies.
The latest release means that counties have received a total of Sh167 billion since July 1, 2020, when the County Allocation of Revenue Act came into force. But there is a disparity in the figures released by the governors and the ministry.
Mr Oparanya says counties did not receive disbursements for October, November, and December 2020 and January 2021, totalling Sh94.7 billion. While Treasury says the amount in arrears is Sh61.4 billion, the figure provided by the CoG is Sh73.1 billion.
“We note with utmost concern that county governments have not received disbursements for October, November, December 2020 and January, 2021,” Mr Oparanya said in his letter to Treasury early this month and which was copied to Controller of Budget (CoB) Margaret Nyakango, Senate Speaker Kenneth Lusaka and National Assembly Speaker Justin Muturi.
“Some of the counties have not even received the September disbursement bringing the total balance to Sh94.7 billion.”
The delay in disbursement has hindered service delivery amid the Covid-19 pandemic, when the county governments are the expected to be focusing on offering health services.
County government employees have not been paid salaries for the past three months, unlike their national government counterparts who have been paid all their dues and statutory deductions made.
