County assemblies pass laws to guarantee car loans, mortgages

As the wait for grants promised to Members of County Assemblies (MCAs) drags on, counties are resorting to cheap car loans and mortgages.

President Uhuru Kenyatta had in March suggested that MCAs be given vehicle grants like Members of Parliament (MPs) and senators on the basis that the more than 2,200 MCAs served the interests of Kenyans and should be treated equally. This was despite a call to Kenyans to embrace austerity measures to bring down a ballooning wage bill in the country.

He clarified his remark in an interview with Citizen TV as the Jubilee coalition was marking one year in office, saying he only meant that MCAs should be treated the same way as MPs since they are also elected leaders.

The wage bill debate notwithstanding, the President’s sentiments raised hopes among MCAs, who had been left out in negotiations that Parliament had with the Salaries and Remuneration Commission on car grants and mortgages.

But MCAs claim that the President’s promise has not been kept.

And the Sunday Nation now understands that the County Assemblies Forum (CAF), governors, State House and the National Treasury have discussed the matter.

“I don’t want to disclose which offices we have been in touch with, but this is a process and we are still talking. These things are not implemented overnight, are they?” CAF Chairman Abdi Nuh said.
In the meantime, some county assemblies have passed legislation offering MCAs car loans and mortgages.

In Nairobi County, for instance, County Assembly Minority Leader Abdi Guyo said the county has signed a memorandum of understanding with Family Bank for mortgages and car loans for its 127 MCAs. And each MCA can sign up for Sh3m for a mortgage and Sh2m for a car loan under the scheme.

DEPENDENT ON ECONOMY
“The law – Nairobi County Assembly Mortgage and Car Loan Facilities Act – was passed about a month ago as we wait for the communication from SRC on the President’s promise which seems dependent on how the economy goes,” Mr Guyo said.

Migori County Assembly Speaker Gordon Ogola also said MCAs had passed the Car Loan and Mortgage Act 2014 that Governor Okoth Obado has assented to and gazetted.

“We have formed a board of five to implement the scheme,” said Mr Ogola. According to the Speaker, the Migori board consists of the County Assembly clerk, county executive officer for finance and three members of the Assembly Service Board.

Mr Ogola said MCAs will have access to car loans and mortgage facilities at an annual interest rate of three per cent. He explained that if and when the grant promised by the President comes through, it will be used to settle the loans.

The trend has been replicated in a number of counties.

Dr Kinyanjui Ng’ang’a, an expert on devolution, termed the President’s promise to MCAs a tall order and a political statement that will not be easy to implement.

For Bogichora Ward Representative Beauttah Omanga, who is also a CAF committee member, it would be good if the President came out and said he has failed to make good on the promise.

Otherwise, he is keeping MCAs in suspense while the time for repayment becomes shorter, and MCAs feel that the President took them for a ride, possibly for political reasons; County Assembly Bills to provide loans are becoming the only option.

Dr Ng’ang’a cautioned that the loans MCAs are passing are within the law as long as they don’t turn out to be an increase in their salaries, in which case they would be illegal.

“If MCAs are copying their elder brothers the MPs then it is an illegality because they cannot review their salaries without the input of the Salaries and Remuneration Commission,” he said.