Counties to get Sh46bn more - Daily Nation

Counties to receive Sh46bn more amid cash crunch and delays

Monday March 19 2018


Treasury Cabinet Secretary Henry Rotich attends the signing of the loan agreement for the rehabilitation of Olkaria geothermal power plant at Treasury building on March 16, 2018. The ministry has delayed disbursing funds to counties. PHOTO | DIANA NGILA | NATION MEDIA GROUP 

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Members of Parliament have approved an increase of the allocation to counties for the next financial year by approximately Sh46 billion, setting the amount at Sh372.7 billion in the Division of Revenue Bill.

The bill is now headed for the Senate and is on track to be approved by Parliament before the end of the current financial year.

The revenue to be shared based on the established formula for equity is Sh314 billion, up from Sh302 billion this year, while the conditional and additional grants — money meant for specific work per county — has increased from Sh24 billion to Sh58.7 billion.

Sponsored by Kikuyu MP Kimani Ichung’wa, chairman of the Budget and Appropriations Committee, the bill was drafted to reflect the emphasis by the Treasury that there has been an imbalance in the way revenue was shared between the two levels of government.

The bill states that the conditional allocations of Sh17.2 billion to finance the leasing of medical equipment, free maternal healthcare, level five hospitals, construction of county headquarters and rehabilitation of youth polytechnics is coming from the national government’s share.

But even as Parliament processes the bill, counties are facing a serious cash crunch attributed to failure by the Treasury to release cash to them.

In Mombasa, Finance executive Maryam Mbarak said they have been using money collected as revenues for day-today operations.

“The majority of our development projects have stalled. Salaries for last month were delayed for two weeks.

"We are facing challenges at our health facilities as we cannot buy drugs for lack of funds,” she said.

In Taita-Taveta County, workers are yet to receive their February salaries as the devolved unit grapples with a cash crunch due to delays in disbursement by Treasury.

The department of Finance and Planning issued a notice to workers notifying them that their salaries would be delayed.

In Lamu, Governor Fahim Twaha said the situation has made it difficult to effectively run some affairs of the county.

Mr Twaha, however, said that payment of salaries to county staff has not been affected.

Essential services have been disrupted and salaries delayed in Kwale County because of the delay from Nairobi.


County Assembly Speaker Sammy Ruwa has said procurement plans have been adversely affected, forcing the assembly to request for patience from suppliers.

“Normal operations of the Assembly have been affected while suppliers, MCAs and other staff have been inconvenienced by late payments,” he said.

Mr Ruwa added that they usually have a procurement plan every year and, once there are delays, the Assembly’s plans are affected.

Counties in western region have resorted to emergency deals with banks to forestall crises caused by delayed payments.

On Sunday, Busia Governor Sospeter Ojaamong said essential services at the county have been disrupted.

“Implementation of some projects has stalled as a result of the cash crunch. We are relying on collected revenue for survival.

"We have also been forced to delay salaries to staff, who are being paid in phases,” he said.

County workers are routinely getting their salaries late, which could affect morale and service, he said.

The first batch of February salaries was released on Monday, two weeks late.

In Kakamega, officials were bracing for tough times ahead after key operations and services were disrupted by the delayed release of funds.

The regional government has been negotiating for loans from commercial banks to pay salaries and sustain operations.

In Siaya, the staff said their payslips were reflecting statutory deductions “but the county was not remitting the cash”.

“Sometimes, when you check your status, it is updated up to January, but when you go to the hospital with your NHIF card you are told you cannot be treated due to non-remittance of money.

"This also affects remittances to the Higher Education Loans Board and bank loans,” a county staff said.

Kenya National Union of Nurses, Siaya branch head, Mr Sylvester Ng’anda, said not all staff have been paid their February salaries.

“In some banks, our colleagues have not been paid. We are wondering what kind of arrangement this is,” Mr Ng’anda said.

Similar problem have been experienced in the South Rift, with counties saying they are owed money and have been struggling to keep things going.

Nakuru County, for instance, is owed nearly Sh4.5 billion, with some crucial operations almost crippled.

The last tranche of cash was disbursed last October and used mainly to pay salaries, power bills, water charges and to clear pending statutory deductions to bodies such as the National Social Security Fund (NSSF).

The county is now owed arrears for November and December last year and the first two months of this year, it emerged.

“We’re are stressed financially. We’re just surviving,” the county executive in charge of Finance and Economic Planning, Mr Joseph Kiuna, said.

Due to the delay, the county is not able to clear the bulk of its pending bills, which stand at Sh722 million, he said.

But in Nyandarua, Finance executive Mary Mugwanja said the county is not affected by delayed disbursement of funds from the national government.

However, she expressed concern that the delay might derail implementation of crucial development projects.

“We have paid salaries up to February. I wouldn’t say that we are stuck. We haven’t got to a point where we are unable to work.

"But we could have a problem fast-tracking development projects,” Ms Mugwanja said.

In Narok, an official who sought anonymity said the county is relying heavily on local revenue — especially from the world famous Maasai Mara Game Reserve — to carry out its operations.

“We feel the heat, but operations in the county government are still running,” the source said.

Meanwhile, the Nation learnt that various South Rift counties are struggling to remit statutory deductions to NHIF, NSSF, saccos and bank loans due to the cash delay.

Reported by Francis Mureithi, Eric Matara, Waikwa Maina, Benson Amadala, Gaitano Pesa, Justus Ochieng, Derick Luvega, Mohamed Ahmed, Lucy Mkanyika, Kalume Kazungu and Fadhili Fredrick