How inherited debts defunct councils are draining counties

Debts inherited from the defunct councils are still haunting county governments.

The 47 counties are now forced to include in their budgets money to try and clear the debts amounting to billions for fear of being sued by suppliers.

According to a report by Controller of Budget Agnes Odhiambo, counties spent Sh3.7 billion on repaying some of the debts. This translated to 2.2 per cent of the total Sh132.8 billion expenditure by the county governments.

The report titled Annual Budget Implementation Report 2013-2014 indicates that the money was spent mainly on statutory liabilities such as payments to suppliers, pensions and taxes, electricity and servicing bank loans.

"Nairobi City Council had the highest expenditure on debt repayment and pending bills during the period under review at Sh2.7 billion followed by Kiambu and Trans Nzoia counties at Sh419 million and Sh189.4 million respectively," she stated in the report.

The Marsabit government spent Sh15.9 million on debt repayment.

On county executives, Ms Odhiambo said in the report that a total of Sh144 billion was spent on recurrent and development expenditure.

"Nairobi, Kiambu, Machakos and Nakuru county executives spent the highest during the financial year 2013/2014 at Sh16.4 billion, Sh16.1 billion, Sh5.4 billion and Sh5 billion respectively," she added.

County executives in Tana River, Elgeyo Marakwet and Lamu were the lowest spenders, recording below Sh1.3 billion.

Odhiambo said the last quarter registered a better performance in budget execution by the counties.

"Absorption of funds improved from Sh86.7 billion during the third quarter to Sh169.4 billion at year end," she said.

However, she pointed out that recurrent expenditure recorded the highest absorption rate.