How Treasury divided Ksh.10bn among counties in September disbursement

The National Treasury disbursed a total of Ksh.32.761 billion in July to counties as the first batch of the Ksh.385.425B counties annual allocations from the National government. In the said release, traditionally, leading counties with the highest allocations for the July releases were Nairobi, Nakuru and Turkana with Ksh.1.706 billion, Ksh.1.155 billion and Ksh.1.117 billion respectively. 

The bottom on the list of allocations were the Elgeyo Marakwet and Isiolo Counties each receiving Ksh.408.1 million and Ksh.416.4 million respectively while Lamu closes the list of least monthly receipts of Ksh.275.1 million as first batch allocation.

This was in the wake of struggle among counties struggling failing to honour the pending bills due for payments to various persons and institutions that rendered goods and varied services. Kemsa as this point was following the counties to get her over Ksh.8 billion owed to her for supplies of medical goods while the pension funds like the CPF were also making claims for more than Ksh. 15 billion worth of bills by the counties.

On August 31, the National Treasury was prompt to release Ksh.6.506 billion as August allocations, being within the 15th day of the subsequent month as required by law.

The release was, however, done for only 13 counties that had zero or lowest cash balances in their accounts and seemed to require replenishment. They included counties like Vihiga, Tharaka Nithi, Taita Taveta, Nyamira, Nandi, Meru, Laikipia, Kisumu, Kirinyaga, Kajiado, Isiolo, Elgeyo Marakwet and Bomet.

Counties are usually encouraged to clear their balances by making payments to their various suppliers of goods and services. This way then, the National Treasury releases the available funds to the ‘most needing’ counties.

On September 22, the National Treasury further released Ksh.10.068 billion as August allocations to some 15 more counties.

Kakamega got the highest allocation in this send batch of release with slightly over Ksh. 1 billion followed closely by Mandera County which received Ksh. 930 million. Bungoma County got Ksh. 888 million while Narok received Ksh. 735 million.

Other counties that benefitted from this release included Garissa, Homa Bay, Kericho, Kwale, Mombasa, Murang’a, Nyandarua, Samburu, Trans Nzoia, Uasin Gishu and the West Pokot Counties all having a range of between KSh. 447 million and KSh. 686 million.

This consequently means that the Treasury has done about 50% of August releases having a balance of over Ksh.16.6 billion not released. The 19 counties with no August allocations will therefore have to wait for the Treasury to consolidate more funds for release. 

With raising non-food and fuel inflation hitting the country, we expect to see the counties calling for supplementary budgets to adjust to the inflationary pressures. The rising inflation has a ripple effect to enterprises and this would subsequently affect the county own source revenue collections thus contracting the budget even further on the revenue side of the equition.

The National government for instance, will be submitting to parliament some budgetary changes in the end of October as their 1st 2023/24 Supplementary Budget. This supplementary budget will include some legislative proposals for enhancing tax collection which has shown some red flags.

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Murungi Ndai

Mr. Ndai is an experienced public sector economist, experienced in sub-nationals having greatly influenced development of policies relating to revenue mobilization by Counties Governments. He collaborates with the private sector, governments and NGOs to address critical topics, including county growth strategies, borrowing and leasing by counties, MSME support and public finance management.

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