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Councils to miss LATF money over debts

By | Jun 30th 2010 | 2 min read

By George Olwenya

A crisis is looming in most local authorities in Nyanza Province after it emerged they may not qualify for Local Authorities Transfer Funds (LATF) this year. The councils stand to lose millions of shillings after failing to beat the June 30 deadline set by Parliament to repay all outstanding statutory debts.

The Nyanza Provincial Local Government Officer (PLGO) Isaac Kirui yesterday confirmed that only two councils in the province would qualify to get LATF funds since most of them had not complied with the directive.

"Most civic bodies in the province have not complied and their debt burden runs into millions of shillings," said Kirui. He could not, however, reveal the amount or institutions owed the money as he was away in Nairobi. When LATF came into effect in 1999, local authorities in the country were required under LATF regulation 19 to settle all outstanding debts owed to statutory bodies within five years.

At the expiry of the period in 2005, most civic bodies had not cleared the debts and Parliament extended the period by five years ending 2009/2010 financial year.

Many local authorities in the country are likely to be affected. In Nyanza, the situation has sent shivers in almost all the councils because they cannot operate without LATF money. Mayors and chairmen of councils have been looking for alternative sources of money throughout the week to settle the debts.

Siaya Municipal Council owes creditors over Sh28 million while the Siaya County Council has a debt of Sh12.5 million. Siaya Mayor Agutu Ochiam who confirmed the figures said they have secured a loan from a commercial bank to repay the debts.

Dead councils

"We have not been idle. If we miss LATF then the council is as good as dead," said Ochiam.

Siaya County Council chairman Aggrey Onyango disclosed that they had also approached a bank for a loan and the agreement forwarded to the ministry headquarters in order to secure LATF money.

Ugunja Town Council clerk, Livingstone Alego, said they were trying to raise Sh400,000 before today’s deadline while Ukwala Town Council chairman Sylvester Wire said his council had repaid all debts.

According to a circular from the Local Government Ministry dated May 31, all local authorities were required to pay up by today to avoid loosing the money.

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