Concern over heavy borrowing by county governments

Commissioner Rose Osoro from the Commission on Revenue Allocation (CRA) addresses the press in a Naivasha hotel during a workshop on devolution and fiscal decentralization. The commission has expressed its concern over high borrowing by some county governments. Photo: Antony Gitonga

The Commission on Revenue Allocation (CRA) has raised concern over the heavy borrowing by some county governments.

The commission has termed the borrowing illegal and warned it would sink the Government deeper into debt.

CRA Commissioner Rose Osoro said the law is clear that no county should borrow before the expiry of three years.

Osoro said many counties were going for overdrafts from local banks and other lenders using the back door.

"We have come to learn that some counties are borrowing heavily and this means that the national government debt rises further," she said.

The commissioner emphasised the need to come up with a borrowing policy so that counties can borrow within the law.

Osoro was addressing journalists in Naivasha on Monday after she opened a one-week workshop on devolution and fiscal decentralisation.

She revealed that the commission is working on a new revenue sharing formula before the November deadline for the current formula.

"We had handed over a new formula to the Senate but this was rejected but we have engaged various players including international experts to get a new formula," she said.

She downplayed fears that the country would slip into a financial crisis and expressed optimism over the new formula.

"Some counties have embarked on major collection of revenue but they are not offering services to the public, thus causing a rift with the taxpayers," she said.

health centres

The commissioner also accused some counties of having wrong development priorities.

Many counties, she said, have built ECD classes which they are yet to put to use, while neglecting the health sector.

"Some of the counties have constructed health centres but there are no personnel to run them or even supplies," she said.

The chief of party USAID AHADI Waceke Wachira praised the country for the strides it has made in devolution.

She, however, noted a lot more needs to be done to make it more effective.

"This workshop is meant to address the emerging gaps and challenges in the issue of devolution so that it can be a success," she said.

Waceke admitted that there is urgent need for capacity building for both citizens and all those involved in implementing devolution.