Marginalised counties may sue Treasury over Sh43b fund

Counsel for the Frontier Counties Development Council (FCDC) Abdikadir Mohamed. [File, Standard]
Nine counties have threatened to sue the National Treasury for failing to remit Sh45.3 billion meant for Equalisation Fund.  

The Frontier Counties Development Council (FCDC) has written a demand letter to the National Treasury, accusing it of breaking the law in denying marginalised counties the money as provided for in the Constitution.

The FCDC counties include Lamu, Tana River, Garissa, Wajir, Mandera, Marsabit, Isiolo, Turkana and West Pokot.

Through their lawyer Mansur Issa, the counties argue that Article 204 of the Constitution of Kenya established an Equalisation Fund into which 1.5 per cent of all revenues collected by the national government was supposed to be paid.

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The National Treasury, the administrator of the fund, was to disburse all these monies for provision of basic services including water, roads, health facilities and electricity to marginalised areas.

“As you are aware, this constitutional fund came into existence on the promulgation of the new Constitution of Kenya in 2010 and has now been in existence for almost a decade,” the demand letter seen by Saturday Standard reads in part.

It says the National Treasury has sabotaged the fund and has disbursed a paltry Sh942 million, which is a far cry from the Sh45.3 billion it should have given the marginalised counties by now.

To make it worse, the National Treasury went ahead to illegally withdraw Sh4.6 billion from the fund by way of the 2018/19 supplementary budget.

The counties say they were entitled to receive Sh3.4 and Sh3.8 billion in 2011 and 2012 respectively. They should have been given Sh4.6 billion in 2013 and Sh5.1 billion in 2014.

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In 2015 and 2016, the counties were denied Sh5.2 billion and Sh6.5 billion respectively, according to the government revenue statements pending audit.

The marginalised counties say they are owed Sh7.4 billion for last year and this year they are entitled to receive Sh8.4 billion.

They want Sh11.4 billion being held by the Central Bank of Kenya for the Equilisation Fund be released immediately.

They also want the Treasury to reverse the withdrawal from the fund made through the supplementary budget.

The letter is copied to Controller of Budget, the Commission on Revenue Allocation, the Auditor General, the Attorney General and CBK Governor.

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“If the National Treasury does not respond appropriately to the demand letter then we will go to court.

“This is a legal obligation and we cannot have the Treasury breaking the law,” Abdikadir Mohamed, counsel for FCDC said on phone.

Frontier Counties Development CouncilEqualisation FundNational Treasury