PS blames counties cash crisis on last year’s polls
What you need to know:
- Most counties have been hit by financial crisis and lack of money for development since the financial year begun in July.
Treasury is by law required to disburse monthly funds as a block to the county revenue fund held at the Central Bank of Kenya in Nairobi.
The Government Wednesday blamed the heavy cost incurred in last year's two elections for its failure to release funds to counties promptly.
Planning Principal Secretary Julius Muia said the delays in disbursements were because of the effect of the elections but said the situation was quickly improving.
DISBURSEMENT
He said the ministry was working on a framework to ensure equitable and prompt disbursement to counties, when he addressed a monitoring and evaluation week forum at Sarova Whitesands Hotel in Mombasa.
Most counties have been hit by financial crisis and lack of money for development since the financial year begun in July.
BUDGET
There have been fears that the devolved units might not receive the funds by December as the development module on the Integrated Financial Management Information System (IFMIS) has not been activated, stalling implementation of projects.
“We do what is called balanced budget, meaning that the funds we use and the money that is sent to the counties is tax generated from the taxpayers. We have no other way to get these funds. So if the economy is not doing well, then tax collection becomes a challenge,” he said.
INDICATORS
“But we have good indicators at the moment that our economy is doing well. Yes, there have been concerns about the delayed funds in the last disbursements and that was caused by two general elections we had last year where a lot of money was used.”
The PS blamed counties for failing to meet their revenue targets, saying most are still trying to figure out how to generate more revenue from the resources within their borders.
OBLIGATIONS
“Hopefully in near future, counties will have an opportunity to generate more revenue from their resources to meet some of their obligations. It is not something that can be achieved within a day, it’s a process and finally counties will be able to generate enough revenue to take them forward and end dependency on the national government,” he said.
Governors have recently complained about persistent delays of funds, saying they are unable to implement their development projects and pay contractors and suppliers.
ALLOCATION
According to the Division of Revenue Act, 2018, the 47 county governments were allocated Sh372 billion by the national government.
About Sh314 billion of the vertical allocation is in equitable share and the balance in conditional grants from the national government and other development partners.
Treasury is by law required to disburse monthly funds as a block to the county revenue fund held at the Central Bank of Kenya in Nairobi.
