The National Treasury has slashed the budget for the Nairobi Metropolitan Services (NMS) for the new budget, signalling an end of the short tenure of the entity.
The NMS tenure will have lasted just over two financial years at the end of FY 2021/22.
The national government last year took over control of four crucial county functions from the Nairobi County Government amid concern over how former Nairobi Governor Mike Sonko was running affairs of the key county.
President Uhuru Kenyatta, through Executive Order No. 3 of 2020 issued in February last year, transferred the crucial health, transport, planning and development, and public works functions from the Nairobi County government to the new outfit and installed Major-General Mohamed Badi as its director-general.
Signing of the Deed of Transfer in March by then-Nairobi governor Sonko with the state left the county in control of less influential departments such as ICT and E-Government, Education and Sports, Agriculture and Livestock, Trade and Co-operatives and Devolution, Environment and Finance sectors.
In the new budget, however, the National Treasury has cut allocation to the Office of the President to Sh8.13 billion from Sh34.59 billion in the current year, mainly following the cull of funding for NMS, which is one of the office’s departments.
NMS, which was allocated Sh26.95 billion for this year, has not been allocated any money for the new financial year, indicating that its operations will cease with Uhuru’s administration.
Its budget for the current year was an increase from the Sh26.4 billion it was given for the financial year 2020/21, with Sh15.95 billion drawn from the Nairobi County Government equitable revenue, while Sh9.7 billion would be generated by the county in revenue.
Meanwhile, the Deputy President’s office has been given additional funds, with a budget of Sh1.46 billion for FY 2022/23, up from Sh1.41 billion this year.
Articles 187 and 189 of the Constitution allow for transfer of power between levels of government if the transferred function or power would be more effectively performed by the receiving government.
However, the transfer of the four functions from City Hall to NMS has birthed numerous contestations between it and the county, especially over criteria of sharing the funds for the transferred functions, due to a lack of resource sharing framework by the Public Finance Management Act, 2012 and the Intergovernmental Relations Act, 2012 (IGRA).
Deed of Transfer
However, articles 5.2 and 5.3 of the Deed of Transfer of functions entered between City Hall and the national government give the latter leeway in determining the amount it should receive from county coffers after consulting the county government.
But the National Treasury notes that the government is set to make changes to the law to establish a framework on how counties will be sharing resources with the national government in case of such transfers, setting the stage for similar transfer of county functions to the state in future.
Treasury said the legislations by the Inter-Agency Task Force that was formed to iron out the resource sharing impasse between the two levels of government will help streamline future takeovers of county functions by the national government.
“The Task Force has prepared a zero draft Public Finance Management (Amendment) Bill, 2021, which once approved will undergo public participation. It is expected that cooperation between national and county governments or among county governments has a potential to reduce adverse externalities and a full exploitation of positive externalities and synergies from cooperating governments’ actions and policies, as well as economies of scale,” Treasury said.