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Counties gobble up Sh120.5b as development gets leavings

BUSINESS
By Kepher Otieno | June 9th 2020
Controller of Budget Margaret Nyakang'o before the National Assembly Finance Committee on November 28, 2019. [File, Standard]

The recurrent expenditure for the 47 counties gobbled up Sh120.5 billion in the first six months of the 2019/2020 financial year.

This represents 41.7 per cent of the annual recurrent budget.

According to the latest Budget Implementation Review data from the Controller of Budget (CoB), development projects took Sh22.7 billion, signifying an absorption rate of 11.6 per cent of the annual development budget.

According to Controller of Budget Margaret Nyakang’o, the law requires that at least 30 per cent of the national budget be set aside for development expenditure.

In the first half of 2019/2020, the CoB approved a transfer of Sh117.29 billion from the Consolidated Fund to the 47 Counties Revenue Fund (CRF) as per the law.

The total expenditure by the county governments in first half of the year before Covid-19 pandemic was reported amounted to Sh143.27 billion, while the total funds available to the devolved units in the same period were Sh179.77 billion.

This includes Sh117.29 billion as equitable share of revenue raised nationally and Sh47.15 billion opening balance from the previous financial year 2018/19. Of the Sh47.15 billion, Sh15.33 billion was raised from the counties’ revenue.

Most counties spent monies on paying salaries, personal emoluments and maintenance, and on operations costs.

The recurrent expenditure on personnel emoluments hit Sh80.9 billion and Sh39.6 billion was used on operations and maintenance.

Although CoB had warned against over spending on recurrent activities, the report still shows governors had high appetite to spend on capital projects.

For instance, Nairobi City had the highest recurrent expenditure of Sh10.5 billion and only Sh625 million on development of the Sh11.1 billion allocated for the period under review.

Kiambu County spent Sh5.1 billion on recurrent expenditure and Sh1.1 billion on development of the aggregate sum of Sh6.17 billion.

Kakamega followed with Sh3.4 billion spent on recurrent expenditure and Sh1.7 billion on development of the total Sh5.12 billion.

The CoB report presents the status of budget implementation by the county governments during the period from July to December 2019.

It revealed that Samburu, Isiolo and Lamu recorded the lowest expenditure during the six months period.

An analysis on development expenditure in proportion to approved annual development budget revealed that Murang’a, Kakamega and Kisii counties attained the highest absorption rate at 32 per cent, 24.2 per cent and 23.9 per cent, respectively.

Samburu spent Sh1.4 billion on recurrent expenditure, but CoB did not capture any expenditure on development activities.

Isiolo followed with Sh1.1 billion on recurrent expenditure and Sh244 million on development that comes to Sh1.36 billion of the total allocated expenditure over the same period.

Lamu County spent Sh726 million for recurrent budget but like Samburu did not provide any tangible proof of expenses on development.

The CoB said the county governments generated Sh15.3 billion, about 28.2 percent of the annual target, which is Sh54.28 billion.

This was a slight decrease from Sh15.37 billion generated in a similar period of financial year 2018/19.

The budget report is a review of in-year budget execution by the 47 counties prepared in fulfillment of Article 228(4) and 6 of the Constitution and Public Finance Act.

In the report, Uasin Gishu County’s recurrent expenditure was Sh2.3 billion against development of only Sh329 million.

Kirinyaga spent Sh1.6 billion on recurrent and Sh170 million development while Kitui spent Sh3.5 billion on recurrent and Sh571 million on development.

Meru spent Sh3.2 billion on recurrent and development Sh284 million.

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