County governments will not be allowed to transfer monies to their various regional blocs to undertake common projects until new legislative framework is put in place.
Some regional blocs had already started aggressive stimulus economic projects to leverage their economies of scale.
Council of Governors and Lake Region Economic Bloc (LREB) Chairman Wycliffe Oparanya said all financial contributions to the blocs have been put on hold pending the new law.
"We have been advised by Devolution CS Eugene Wamalwa to wait until the government comes up with a regulatory framework to guide the use of the funds towards our regional blocs’ project," he said at a press briefing in Kisumu on Wednesday.
The legislative framework for the regional economic blocs is expected to address the nature of instruments of co-operation, the powers of the regional economic blocs and their financing models.
It will also put in place mechanisms of leveraging synergies with the national government, private sector and international frameworks in expanding economic frontiers of the counties to boost their economies.
The policy guideline will also address issues of shareholding or ownership of regional blocs’ projects and dispute resolution mechanisms to be applied in arbitrating disputes.
Already, the government has drafted the policy, which is awaiting the Cabinet’s discussion and subsequent approval before it is submitted to the National Assembly, and thereafter the Senate.
"It is after the draft Regional Blocs Bill has been tabled and ratified by Parliament that we shall now be allowed to go ahead and contribute monies toward joint regional bloc projects," said Mr Oparanya.