The National Treasury has said it will disburse Ksh.38 billion to Ksh.39 billion between June 15 and June 18, 2021, to counties, a few days after County Governors threatened to cease operations in their respective counties.
Once the funds are released, County bosses are expected to settle Ksh.28 billion April arrears while the remaining balance will settle Ksh.9.97 billion arrears for the month of March.
Appearing before the Committee on Finance and Budget, National Treasury Cabinet Secretary Ukur Yatani shifted the blame over delayed funds on the underperformance in revenue collection that was greatly impacted by the negative effects of the coronavirus pandemic.
“We’re quite optimistic that between now and end of the month we’re likely to get substantial inflows funding and that’s what we’ll use to settle all these obligations and county governments will be prioritised,” said C.S Yatani.
On June 14, Council of Governors Chairman Martin Wambora, revealed that the Treasury was yet to release funds to counties in excess of Ksh.102.6 billion. As a result, CoG gave the Ukur Yattani-led Ministry till this Friday to respond or risk crippling activities including critical health services across the country.
The Committee acknowledged the consequences of shutting down county activities but challenged the exchequer and the County Governments to find a permanent and realistic solution for constant funding even during unprecedented times.
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“Treasury is only accessible to the National government and not to the counties. Isn’t it possible for Treasury to get into an arrangement with the Central Bank of Kenya (CBK) where money is released to the counties and when funds are available through collection your accounts can be replenished,” asked Machakos Senator, Mutula Kilonzo Jr.
C.S Yattani, however, opposed the proposal saying the procedure would still fall under the borrowing framework and would result in more debts.
With the current financial year almost coming to an end, C.S Yatani said settling arrears at the county level will be given precedence in the next financial year 2021/22 should the Treasury fail to meet its current fiscal year deadline.
He urged County bosses to settle pending bills especially those owed to the private sector to reduce the risks of damaging Kenya’s business environment.
County bosses are currently looking at how they will settle pending bills should Parliament back the proposal under Article 225 of the Constitution of Kenya which seeks to temporarily stop revenue transfers to County Governments that persistently fail to comply with the directive to clear pending bills.
