Governors raise red flag over delayed funding amid Covid-19

Kakamega Governor Wycliffe Oparanya

What you need to know:

  • In a letter to Mr Yatani on Monday, Governor Oparanya said the delay has affected service delivery in all the 47 counties.
  • Counties are staring at a major development meltdown as the National Treasury has not released almost Sh30 billion normal allocation to the counties 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.

The council of governors has raised a red flag over the delay by the National Treasury to release more than Sh30 billion to the counties.

The county chiefs have said counties might record a high Covid-19 mortality rates. The country has confirmed more than 14,800 cases and at least 260 deaths.

The Council of Governors’ chairperson Wycliffe Oparanya who is also Kakamega Governor, in an appeal he made to National Treasury Cabinet Secretary Ukuru Yatani, said the situation at the counties is dire.

“The fight against the pandemic will be immensely compromised if the resources are not disbursed and this may lead to a negative impact and increase on mortality due to lack resources to cushion county government’s interventions.”

In a letter to Mr Yatani on Monday, Governor Oparanya said the delay has affected service delivery in all the 47 counties.

REVENUE SHORTAGE

“We acknowledge the current revenue shortage presented by Covid-19 pandemic which has resulted in challenges in cash transfer to county governments for the financial year 2019/2020 which has resulted in delays in disbursement of Sh30 billion for the month of July, however, we seek your urgent intervention to facilitate release of these funds immediately” said Governor Oparanya.

He said the funds will  enable the devolved units factor the balances in the supplementary budgets for financial year 2020/2021 leading to uninterrupted service delivery.

Counties are staring at a major development meltdown as the National Treasury has not released almost Sh30 billion normal allocation to the counties for the just concluded financial year.

The National Treasury is supposed to send Sh30 billion to the 47 counties as per the County Allocation of Revenue Act, 2019.

According to development experts in the counties, the delay in disbursement will lead to slow pace of development. 

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

SHARE REVENUE

“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 Column 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 coronavirus pandemic.

The delay has forced some of the counties to delay the passing of their annual budgets. The government has disbursed all its recurrent expenditure for the last financial year to the counties. This is mostly used for paying  staff salaries. 

The chairperson of County Assemblies Forum and the Speaker of Nyandarua County Assembly Ndegwa Wahome said the delay will have major economic repercussions in all the 47 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 which 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 Sh995 million,” 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 save counties’ development agenda from collapsing.

REDUCE FUNDING

 “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 has urged the devolved unit 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.

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 Nakuru County has a revenue collection deficit of Sh745 million due to the pandemic.