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Nairobi County government is grounded due to financial constraints. They want Sh4 billion loan to sort out the financial situation, but controversies have emerged over the matter.
On October 23, the Cord members approved the loan, but the minority (Jubilee) has faulted the purported illegality in the move that now leaves the government with a potential lawsuit.
Finance boss Gregory Mwakanongo claimed the National Exchequer has failed to remit Sh1.5 billion to pay wages.
“There are always delays in these remittances and it is for this reason that the county seeks an approval for a revolving overdraft of Sh1.5 billion,” stated Mwakanongo in a memo to the House dated October 22.
He also said Sh2.5 billion was needed for infrastructural development. In June, the county tabled a budget of Sh28.7 billion for the 2014/15 financial year.
About Sh10.4 billion is spent annually on salaries for the county’s 10,915 staff. But the Jubilee MCAs, seeking to know why the loan request was sanctioned without clear details about its purpose, the bank it will be taken from and at what interest, have accused their rivals of protecting ‘illegalities.’
The county government is struggling with the repayment of a Sh5 billion loan taken by the defunct Nairobi City Council from Equity bank in 2011. The loan has accumulated close to Sh3 billion in interests. The MCAs claim the government collects over Sh30 million daily and now they want to scrutinize records of revenue collection for the last two years.
