The National Treasury has disbursed Sh24.6 billion to counties, reducing its two-month arrears that had threatened to cripple operations of the devolved units.
In a statement yesterday, National Treasury Cabinet Secretary Ukur Yatani said the cash belonging to the counties at the Central Bank of Kenya stands at Sh61 billion, with the additional funds expected to be released “in due course”.
“It’s our hope that county governments will prioritise the settlement of pending bills to suppliers as well as other statutory dues to enable concerned institutions discharge their mandates effectively,” he said.
The disbursement comes a day after China agreed to give Kenya a debt repayment holiday for loans valued at Sh27 billion that were due between January and June.
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The freed-up cash will go towards offsetting other spending obligations including disbursement to counties, said Yatani in an interview with Spice FM, a radio station owned by Standard Group.
Besides China, Kenya has also received debt repayment relief from 10 nations under the Paris Club, with the country saving Sh32.9 billion that will be used to address the adverse effects of the pandemic.
The failure to disburse funds to counties has been a headache for Treasury officials, with the chairman of the Council of Governors (CoG) threatening legal action to compel Treasury to release Sh94.7 billion.
Last week, CoG Chairman Wycliffe Oparanya disputed Yatani’s statement that Sh34.6 billion was lying idle at Central Bank’s County Revenue Fund (CRF) accounts, saying the money was for projects already budgeted for by the counties.
He said the cash so far transferred as equitable share was Sh93.9 billion and not Sh120.2 billion as claimed by the CS, adding that the money did not cover what was owed to the counties for October, November, December and January.
Yesterday, Kisii Governor James Ongwae also faulted Yatani, saying the county has no money at Central Bank and they have been paying salaries and ensuring service delivery was not disrupted through bank credits.
“What is in the CRF is from donors and it’s about Sh200 million,” he said.
The money standoff rages as the Commission on Revenue Allocation (CRA) publicised the recommendations for the counties to get Sh370 billion of the Sh1.8 trillion revenue in the 2021-22 financial year.
However, the county bosses are already jittery after it emerged that the provision for the conditional allocation from the national government and donors have been included in the total to counties.
Kisumu Governor Anyang’ Nyong’o said despite the CRA alluding to the fact it consulted Parliament and CoG, they are yet to hold a meeting and take a common stand.
“We are yet to discuss it in the CoG. They consulted yes, but the outcome is not necessarily what the CoG recommended. We need to meet and review the same,” he said.
In the radio interview, Yatani said with the improvement of the economy following the easing of Covid-19 containment measures and thus increased revenue collection, his ministry will prioritise disbursements to county governments.
Increased economic activities in December last year saw Kenya Revenue Authority surpass its target for the first time during the Covid-19 period, netting more than Sh166 billion.
[Reporting by Dominic Omondi, Roselyne Obala and Everlyne Kwamboka]