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Financial crisis hits Kenyan counties as national government delay funds

By Alex Wakhisi | January 11th 2016
Council of Governors (CoG) Finance Committee chairman Wycliffe Oparanya

KAKAMEGA: Development projects and payments to suppliers and contractors at the counties may be put to hold due to a financial crisis at the devolved units.

Staff at the counties will also have to persevere with the harsh reality for delayed payments especially this January due to failure by the national government to release funds for the counties.

Council of Governors (CoG) Finance Committee chairman Wycliffe Oparanya said since October last year the national government has starved the counties by delaying to release funds.

"Since October we have not received funds to pay staff, suppliers, contractors and also finance development projects at the county level," said Oparanya.

He said the delays to release the funds also already caused a crisis at the counties as it has started affecting development projects.

He said the delays are caused by cash flow problems at the national treasury.

Mr Oparanya who is also Kakamega Governor said the solution to the cash flow problems being experienced is for the national government to finalize the borrowing framework to allow county governments to access funds from banks.

"There is likelihood that the cash flow crisis will not end any soon. The solution is for the national government to speed up and finalize the borrowing framework to allow counties to access short term overdraft and funds either from the Central Bank of Kenya or Kenya Commercial Bank," he said.

He said all 47 governors are under pressure and experiencing hard times to deal with the crisis due to lack of funds.

He said in Kakamega already suppliers are on his neck demanding for their dues and unless the national government releases the funds on time suppliers may stop offering their goods and services to the county government.

"I am under pressure because I have to juggle from one point to another to get funds to pay the suppliers who are already demanding for their dues. We have also been forced to well program our projects to fill the gap," he said.

He accused the Jubilee administration for undermining and frustrating county governments' efforts to implement projects.

He said they risk suspending projects at the counties until they receive money from the national government claiming the Government has not even shown interest of disbursing the funds soon.

"County governments are strained in project implementations. We do not have money for development projects as per now," he claimed.

He also accused the Jubilee government for holding on county roads despite the court ruling in favor of CoG to have some roads devolved.

He asked the Government to honor the court ruling and devolved county roads together with funds meant for construction, rehabilitation and maintenance of the roads.

"As CoG we petitioned the court to rule on the issue of roads. The court ruled in our favor and what we want is the Government to honor the court and devolve county roads and funds for the roads," he said.

He lamented that failure by the Government to release funds for construction of roads has affected road network in the county.

He said they are forced to divert funds from other sectors to construct roads to make them passable.

"We have poor road networks in the county because our hands are tied. We do not have funds for roads what we are doing is to divert funds meant for construction of polytechnics to ensure our roads are passable," he said.

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