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Sigh of relief as cash-strapped counties to receive Sh79 billion

By Moses Nyamori | October 9th 2020

President Uhuru Kenyatta when he signed into law the 2020/2021 County Revenue Allocation Bill at State House, Nairobi, paving the way for the disbursement of exchequer funds to the counties. [PSCU, Standard]

Cash starved county governments will next week receive Sh79 billion from the National Treasury.

This is after the Senate yesterday approved the county government cash disbursement schedule for 2020/2021 financial year, ending months of the financial crisis in the counties.

The House in a report by the Senate and Budget Committee recommended that the National Treasury disburses Sh79,125,000,000 to the counties within seven days.

The amount is for the first quarter of the current financial year which covers the months of July, August and September.

The approval by the senators followed the signing into law of the 2020/2021 County Revenue Allocation Bill by President Uhuru Kenyatta at State House earlier yesterday.

Submit quarterly reports

By assenting to the Bill, the President paved the way for the disbursement of exchequer funds to the county governments.

The new law allocates Sh369.87 billion in the current fiscal year to the devolved units.

Of the amount, Sh316.5 billion is Equitable Share and Sh13.73 billion conditional grants by the national government.

Also included is Sh9.43 billion from the road maintenance/fuel levy as well as Sh30.2 billion in loans and grants.

The conditional allocation will be utilised for provision of services such as leasing of medical equipment and rehabilitation of youth polytechnics across the 47 counties.

The development was a relief to the counties that have been facing cash crunch following a protracted battle in the Senate over the controversial third-generation revenue sharing formula.

The formula had stalled in the Senate after the lawmakers failed for a record 10 attempts to reach a consensus on how much each of the counties should receive from the national government.

It was until Uhuru committed to allocate additional Sh50 billion to the counties in the 2021/2022 financial that the House reached a consensus.

The lack of funds also forced the county governors to suspend all non-essential services.

Without deductions

The Finance Committee chaired by Senator Kibiru recommended that the National Treasury transfers equitable share to the counties without undue delay and deductions and submit quarterly reports on the transfers to the Senate.

The House was unanimous in approving the schedule, saying it was a matter of emergency for the counties to receive the funds.

“The National Treasury should transfer Sh79,125,000,000, the total allocations for the first quarter of financial year 2020/2021 within seven days after approval of the cash disbursement schedule,” reads the committee recommendation.

The House also directed the county governments to move with speed in preparing and adopting their annual budgets and Appropriation Bill to ensure service delivery.

Monitoring and evaluation

“To ensure in-year monitoring and evaluation of the disbursed funds, the National Treasury should submit quarterly reports to the Senate on the disbursed funds to respective county governments for each of the allocations as per the schedule,” added the report adopted by the House.

The 2020/2021 County Revenue Allocation Bill was presented to the Head of State for signature by Speaker of the Senate Ken Lusaka at a ceremony attended by Speaker of the National Assembly Justin Muturi and the Treasury Cabinet Secretary Ukur Yattani.

Also present were Leaders of Majority in the Senate and the National Assembly Samuel Poghisio and Amos Kimunya, Clerks of Parliament Jeremiah Nyegenye (Senate) and Michael Sialai (National Assembly), Solicitor General Ken Ogeto and State House Deputy Chief of Staff Njee Muturi.

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