Sh4.7b debt from defunct council haunts county

Mombasa County is struggling to clear Sh4.7 billion in debts inherited from the defunct Mombasa Municipal Council.

Officials say the debts amount to about 50 per cent of the county’s budget or the entire annual wage bill.

The bills, some as old as 20 years, include Sh2.7 billion statutory deductions and amounts owed to suppliers and contractors. A number of creditors have already gone to court and obtained orders to recover their debts. According to the County Executive for Finance and Economic Planning, Mariam Mbaruk, the debts cannot be settled until the Inter-Governmental Relations Committee (IGRC) comes up with a report and modalities for settlement.

She said the defunct Transition Authority (TA) did not finalise its report on assets and liabilities of defunct local authorities to allow county governments to start paying inherited debts.

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The IGRC was established after TA was dissolved in March 2016.

Ms Mbaruk said the county government has written to the IGRC seeking guidance on how the huge debts inherited from the defunct local authority should be handled.

Once finalised, the IGRC report is expected to go through several stages before the county government gets clearance to start settling inherited debts.

On Wednesday last week, Nairobi High Court Judge John Mativo summoned Mbaruk to appear in court and show cause why she should not be committed to a six-month civil jail for failing to pay Sh37 million owed to a car dealer.

The order to pay the car dealer was issued last month by Justice David Majanja.

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Murage Juma and Company Advocates filed the application for contempt on behalf of Associated Automobiles Distributed Limited, who sued the defunct Mombasa Municipal Council for failing to pay for five vehicles delivered to it 20 years ago. The company is demanding Sh13,541,815.

Mbaruk said TA wound up before concluding its report on the handing over of assets and liabilities of local authorities to county governments which were established in 2013.

“Counties are not in a position to get into illegal payments. We have written to the IGRC seeking guidance on the matter,” she said.

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Mombasa CountyMombasa Municipal CouncilIGRC