Budget boss says counties got little cash

Deficit blamed on poor collection of revenue.

President Kenyatta with governors at Sagana State Lodge in Nyeri on February 11, 2016. The Controller of Budget said counties only received a fraction of what they needed in the last financial year. PHOTO | JOSEPH KANYI | NATION MEDIA GROUP 

IN SUMMARY

  • Ms Odhiambo said Treasury released Sh310.3bn to ministries, agencies, commissions and independent offices instead of Sh453 billion for the first quarter of the financial year.
  • This translated to only 17.1 per cent of the total estimates for the financial year, leaving a deficit of Sh143 billion.

  • In October last year, National Treasury CS Henry Rotich admitted that the government was facing a cash crisis due the slow collection of revenue.

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The Controller of Budget has revealed that the national and county governments received only a small fraction of funds for development and recurrent expenditure late last year.

In her latest budget implementation review Report, Ms Agnes Odhiambo said the National Treasury released Sh310.3 billion to ministries, agencies, commissions and independent offices instead of the expected Sh453 billion for the first quarter of the financial year.

This translated to only 17.1 per cent of the total estimates for the financial year, leaving a deficit of Sh143 billion.

“In the first quarter of 2015/16, the National Treasury released Sh310.3 billion to the ministries, departments and agencies, Consolidated Fund Services and to county governments. This was 17.1 per cent of the annual net estimates which is below the projected exchequer issues by the end of first quarter of 25 per cent or Sh453 billion,” she said.

Ms Odhiambo captured the cash flow problems experienced by both levels of government, which affected the financing of projects, payment of contractors and operations of devolved governments.

“In order to enhance effective budget implementation, the National Treasury should release funds on timely basis in line with MDAs’ cash flow projections and procurement plans. This will guarantee implementation of the planned activities,” she added.

CASH CRUNCH

The report shows that virtually all government ministries, departments and agencies as well as the county governments received just a fraction of the projected allocations for the first quarter of the year, resulting in delayed salaries and the slow or non-implementation of projects.

In October last year, National Treasury CS Henry Rotich admitted that the government was facing a cash crisis due the slow collection of revenue at the beginning of the financial year and demands for disbursements.

He also said domestic and international loan repayments were due and asked Kenyans to brace for higher interest rates.

He said the government had borrowed Sh100 billion from the local market since July, and it was projected that it would have borrowed Sh600 billion by next June.

MPs had summoned Mr Rotich to explain why the government was not meeting its financial obligations, including disbursement for free education and pay for some public servants.

Ms Odhiambo said county governments received Sh31 billion to fund their recurrent and development expenditure during the first quarter of the year.

Ideally, Treasury ought to have disbursed to the county governments at least Sh66 billion or 25 per cent of the annual budget.

Treasury allocated ministries, departments and agencies Sh117.4 billion for operations and salaries during the same period. This was only 16.4 per cent of the Sh717 billion annual budget for recurrent expenditure.

The situation was even worse for development expenditure, with Treasury disbursing only Sh24.5 billion or a low 6.3 per cent of the Sh389.1 billion annual budget for projects.

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