Signing of revenue Bill paves way for the Treasury to disburse funds to regional governments.
President Kenyatta Wednesday stepped in to end the cash crunch in counties by assenting to the bill.
Kakamega Governor Wycliff Oparanya said the disbursement of cash should have been done before the August 8 General Election.
Governors have demanded the immediate release of cash by the National Treasury to devolved units after President Uhuru Kenyatta signed into law the County Allocation of Revenue Amendment Bill.
The move by the President effectively gives the Treasury the green light to disburse at least Sh77.4 billion to the 47 counties.
This comes as a major relief to the county bosses, who had, on a number of occasions, accused the Treasury of sabotage, given the delay in the release of the funds.
The governors said they have had to seek loans from commercial banks to meet their needs, including payment of workers’ salaries and the purchase of other essentials, including drugs for their hospitals.
However, President Kenyatta Wednesday stepped in to end the cash crunch in counties by assenting to the bill.
He said the disbursement of the funds will enable county governments to undertake their responsibilities.
“The national government is committed to ensuring devolution succeeds and will continue to facilitate county governments to deliver on their mandate,” said the President in a statement.
He said the new legislation sets out accurately the conditional allocations to county governments, including loans and grants, thereby aligning the County Allocation of Revenue Act, 2017, to the provisions of the Division of Revenue Act, 2017.
The step taken by the President was well-received by governors. They said they expect the money to be released immediately, adding that the disbursement was long overdue.
Kakamega Governor Wycliff Oparanya said the disbursement of cash should have been done before the August 8 General Election “but because of the bureaucracies at Treasury, this was delayed, plunging counties into a lot of financial problems”.
He went on: “Many contractors and suppliers have had their properties auctioned because of counties’ failure to pay them their dues for work done. This should be the last time the Treasury is resorting to technicalities to delay the allocation of funds to counties.”
Mr Oparanya, who chairs the Council of Governors’ Finance Committee, said counties deserve to get their money on time to enable them to deliver services to Kenyans effectively.
Mombasa Governor Hassan Joho also welcomed the decision as a number of development projects had stalled due to lack of funds.
“We were struggling with the revenues we were collecting here and there in our county. Services had been affected. Essential projects have not been going on because of the delay,” said Mr Joho, through the county’s director of communication Richard Chacha.
The governor added that the signing of the bill paves the way for the Treasury to disburse the funds, enabling important services to be offered by his administration.
Vihiga Governor Wilber Ottichilo for his part said: “For the last three months, the county has not received any money for development from the Treasury. Only money for salaries has been remitted but it was not enough to meet the current wage bill. In addition, it was not remitted regularly.”
“Very little money has been remitted for recurrent expenditure. Consequently, there has been very little going on in the county for the last three months,” he added.
Similar sentiments were raised by Busia county executive for Finance Leonard Obimbira.
“We expected to receive the money in August, during the first quarter. As you are aware, we are almost completing the second one. Once we receive the money, we will be in a position to implement the county development plan,” he said.
Mr Obimbira’s Kericho counterpart Patrick Mutai said the signing of the Bill is a big win for counties.
“We are grateful to the President for signing the bill into law. The release of more funds will see counties undertake their mandate of service delivery to the people and roll out massive development projects,” said Mr Mutai.
The disbursement was delayed because some amendments had to be made to the County Allocation of Revenue Act. The changes were meant to align the cash disbursement schedule to the County Allocation of Revenue Act.
The schedule details the funds to be disbursed to counties every month until the end of the financial year.
Since the inception of devolved units, the schedule was not there. The amendments also sought to integrate it to the Act before the exchequer could release the funds.
The anomaly was identified by Attorney-General Githu Muigai, who brought the Senate’s attention to clause 5 (2) of the bill that made reference to sources of conditional allocations for loans and grants.
The AG identified the conditional allocation financed by the World Bank for transforming health systems for the universal care project, which had been set out in the third column E of the schedule. There was also a conditional allocation financed by a loan from the World Bank for the National Agricultural and Rural Inclusive Growth Project, which had been set out in column F of the third schedule.
There was a conditional allocation financed by a grant from Danida for universal healthcare in the devolved system, which was set in column G of the third schedule
Finally, there was a conditional allocation financed by a grant from the European Union for instruments for devolution advice and support set out in column H of the schedule.
The AG recommended that the Act, which did not have all these four columns, be amended to provide columns E, F, G and H to conform to provisions of Clause 5 (2) of the Act before the funds were released.
Council of Governors chairman Josphat Nanok and other county bosses had accused National Treasury CS Henry Rotich of sabotaging the counties.
Additional reporting by Benson Amadala, Gaitanno Pessa, Ahmed Mohamed, Anita Chepkoech and Derrick Luvega