Economy

Cabinet holds key to billions for marginalised counties

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National Treasury Cabinet Secretary Ukur Yatani. FILE PHOTO | NMG

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Summary

  • The Cabinet is yet to approve a proposed law that would unlock billions of shillings to finance projects in 14 marginalised counties.
  • National Treasury Cabinet Secretary Ukur Yatani said a multi-agency committee had handed in Draft Public Finance Management (Equalisation Fund) Regulations to the Cabinet for consideration.

The Cabinet is yet to approve a proposed law that would unlock billions of shillings to finance projects in 14 marginalised counties.

National Treasury Cabinet Secretary Ukur Yatani said a multi-agency committee had handed in Draft Public Finance Management (Equalisation Fund) Regulations to the Cabinet for consideration.

“Once approved by the Cabinet, the draft Regulations will be drafted by the Attorney-General, gazetted and submitted to Parliament for approval,” Mr Yatani said in the Draft 2021 Budget Policy Statement.

The multi-agency committee comprising representatives of the National Treasury, National Assembly, Senate, Council of Governors, Commission on Revenue Allocation(CRA) and Controller of Budget (CoB) was constituted to develop a new statutory instrument on administration of Equalisation Fund after the High Court in 2019 quashed the guidelines developed in 2015.

Equalisation Fund is established under Article 204 of the Constitution to accelerate the level of services in marginalised areas bringing them up to par with the rest of the country.

The money is meant to provide basic services, including water, roads, health facilities and electricity to marginalised areas.

It constitutes one half percent of all revenue collected each year by the national government.

But the money has never been disbursed since 2012 due to failure by the Treasury and MPs to agree on the model for the fund in line with the Public Finance Management Act.

The undisbursed funds stood at Sh28.3 billion as at January 2019. The fund runs for 20 years from August 2010 when the Constitution was promulgated.

“During the financial year 2019/2020, Counties received a total of Sh5.76 billion as allocation to the Equalisation Fund in line with Article 204 of the Constitution,” Mr Yatani said. Beneficiaries of the fund are Turkana, Lamu, Mandera, Wajir, Marsabit, Samburu, West Pokot, Tana River, Narok, Kwale, Garissa, Kilifi, Taita Taveta and Isiolo.