County governments will have to adjust their budgets to make do with the available resources in the next financial year. Deputy President William Ruto told governors yesterday the country can only share the revenue it has.
Speaking during a closed-door Intergovernmental Budget and Economic Council (IBEC) meeting at his Karen home, the DP was also categorical that in light of the current financial crunch, the country cannot borrow to sustain lifestyle but rather to finance major development projects.
Ruto stressed the country could not share resources beyond its capacity but only revenue raised nationally as specified in Article 203 of the Constitution.
The National Assembly is recommending Sh285 billion to counties, against the Commission of Revenue Allocations (CRA)’s figure of Sh331 billion.
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Treasury wants Sh70 billion slashed from the counties’ allocation, a proposal that does not go down well with governors and ward reps. “We should share real money. We cannot share what we do not have. We cannot tell the people that we have money that we are borrowing. I must say that we are reluctant to continue borrowing monies,” said the DP.
Ruto told counties that despite the prevailing financial constraints, the Government is working on an austerity programme including managing what is available for the country to share.
“We should not allow our country to sink because of borrowing. We should live within our means,” said Ruto.
He noted that since there was a difference between proposals by the CRA and the National Treasury, the matter would be referred to Parliament. “I urge for patience as we wait for Parliament to resolve this matter.”
Responding to the concerns raised at the IBEC meeting, Ruto said the counties’ huge appetite for funds may burden the country with debts.
He took issue with demands by county governments that they should be allocated 42 per cent of revenue, while the Treasury has proposed a 31 per cent share.
Council of Governors (CoG) Chairman Peter Munya said county governments were willing to accept a 35 per cent increase even as he called for close working relations between the two levels of government. “We should take a common ground in sharing of revenue so that we have smooth running of programmes at the counties,” urged Munya.
He said the counties are ready to accept the suggestion to come down from their earlier figure of 42 per cent to 35 percent.
Munya called for an agreement on the funding of some devolved units of governance. “Counties should be told for how long should they wait for some funds to facilitate running of functions devolved, so that we plan,” said Munya.
Treasury Cabinet Secretary Henry Rotich said State will respect the Constitution on sharing of funds. However, he asked counties to understand limitations of resources do occur.