NAIROBI: Once the necessary laws are in place, counties will be able to take loans from commercial banks to supplement their budgets, Deputy President William Ruto has said.

The DP, who was speaking after chairing an extra ordinary session of the Intergovernmental Budget and Economic Council at his Karen office, however, said that this would only be possible after Parliament makes amendments that will state how much respective counties can borrow.

He said short-term borrowing to be limited by Central Bank would be encouraged.

"Counties can borrow money for development once a law is made. This will, however, be administered by the Treasury where each county will be told the amount it can borrow. Treasury will issue a circular to that effect," he said.

Ruto said the country has witnessed tremendous progress in development despite the few challenges being witnessed in the implementation of the Constitution. He said the Government will ensure that disbursement of funds to the counties is effected in time to save counties from accumulating pending bills.

"Delay in releasing of funds has also weakened the private sector, which are our suppliers, making counties suffer extra costs through interests. We will make it seamless," he said.

"The Government will continue to work closely with the county governments in ensuring the success of devolution," he added.

He said the regulation of the Equalisation Fund will be implemented before the end of August and will be reviewed a year later.

"The Equalisation Fund Board will be inclusive and implementation of projects will be consultative including setting up of sub-committees," he said.