Governors say Ksh.43.5 billion disbursed by Treasury ‘not sufficient’ to run counties

The Council of Governors (CoG) has acknowledged a disbursement of Ksh.43.5 billion by the National Treasury, however adding that the amount is not enough to clear all pending bills and still run the counties effectively.

The CoG, in a statement to newsrooms by Finance, Planning and Economic Affairs Committee Chair Ndiritu Muriithi, said the amount disbursed comprises of Ksh.39 billion as equitable share.

Out of this, Ndiritu said, Ksh.3.5 billion is arrears owed to the Nairobi County government, Ksh.8.692 billion is arrears owed to 16 county governments for the month of March, and Ksh.27.052 billion is owed to 47 county governments for April.

“It is important to note that these amounts are the normal monthly allocation to County Governments to facilitate delivery of services to the citizen,” said Ndiritu, who is also the Laikipia Governor.

The governors said the delay in disbursement by Treasury led to the county governments owing employees salaries from March to present, hence a big chunk of the funds will be used to settle these arrears as well as statutory deductions to KRA, NHIF and NSSF.

They now want Treasury to release funds for May and June amounting to Ksh.58 billion to enable them facilitate operations in the counties.

“Whereas county governments remain committed to clear all the eligible pending bills, it is important to note that the National Treasury is yet to release funds for the months of May and June Financial Year 2020/2021 amounting to Ksh.58 billion, to adequately facilitate seamless service delivery and payment of the pending bills,” read the statement.

“As such, the amount disbursed yesterday is NOT sufficient to clear all the pending bills and at the same time facilitate normal County operations.”

CoG further added: “The knock-on-effect of the perennial delay in disbursement of funds by the National Treasury is now costing the citizen services by county governments, development expenditure absorption rate and subsequently Counties have been operating on commercial loans which are expensive leading to a big percentage of equitable share going towards the payment of interest rates.”