Economy

MPs ask State to loan out Sh6bn fund

uwezo

President Uhuru Kenyatta (right) with deputy President William Ruto (centre) at the launch of Sh6 billion Uwezo Fund in Nairobi last month. FILE

A House committee Wednesday opposed government’s proposal to allocate 25 per cent of the Sh6 billion Uwezo Fund to each constituency as grants to interested groups. They instead want the money disbursed as loans to enhance sustainability of the fund.

The MPs also dismissed Devolution and Planning ministry proposal that religious institutions be given a fifth of the total cash received by each of the 290 constituencies to give women and youths as grants.

Cabinet secretary Ann Waiguru was hard put to explain the reasoning behind the proposed sharing out and administering of the fund initially meant for the presidential run-off. MPs said issuance of grants would deplete the fund and is prone to abuse.

The committee, which is set to receive draft Uwezo Fund regulations and legal framework, advised the ministry to remove the issue of grants and share the entire money among all constituencies equally — a move likely to scrap stipulation for poor constituencies to get a share based on poverty.

“We don’t support the issue of grants at all. We need to look at the fund’s sustainability because it will be depleted and we must know how to replenish the same,” said Teso South MP Mary Emase.

Ms Waiguru asked MPs to support the model of the funding saying the provision of grants had been necessitated by the need to provide seed capital for groups seeking to tenders from government that are below Sh500,000.

(READ: Entrepreneurs set to benefit as Sh6bn Uwezo Fund is launched)

“We have taken bold steps that will address the issues of women and youths with regard to government tendering,” she said.

“We have secured contracts below Sh500,000 for them. We have tried to tie the issue of 30 per cent of government tenders to this groups and the grants will provide seed capital for them.”

Dagoreti South MP Denis Waweru and his Kangema counterpart Tirus Ngahu cautioned the ministry against setting up the fund for failure.

“We have not seen any study conducted and there seem to be no model that the fund will use to ensure sustainability of the same going forward,” said Mr Waweru. “Why can’t we use existing distribution channels including financial institutions to disburse this money?”

Mr Ngahu said: “We have hyped this Uwezo money such that people now believe it’s huge but when you divide the Sh6 billion among the 290 constituencies, you will realise each constituency will get about Sh18 million…it’s better for us as MPs to run away from this because it will mess us.”

Nominated MP Oburu Oginga said that the fund was a political issue and should be best left to the management of county women reps in the House. Dr Oburu said that the fund was not clearly thought out having been promised during the election campaigns.

Ms Waiguru defended the fund saying a lot of studies had been conducted to ensure that an alternative framework in funding of community-driven development is established.