Economy

Cash-strapped counties fail to pick Sh35bn at CBK

cbk

Central Bank of Kenya building in Nairobi. FILE photo | nmg

john-mutua-img
bonface_img

Summary

  • Treasury Secretary Ukur Yatani said the money is part of the Sh133 billion equitable share and conditional grants released to the counties for the financial year to June.
  • The funds disbursed through accounts at the CBK comprise Sh120.2 billion as equitable share and Sh13 billion as conditional grants that mainly funds delivery of health services.
  • The disclosure by the Treasury came even as county chiefs continue to decry delayed disbursements from the National Treasury that they say have disrupted delivery of services like health and payment of salaries.

Some Sh34.6 billion meant for counties is lying idle at the Central Bank of Kenya(CBK) even as the devolved units continue to decry a cash crunch that has disrupted service delivery.

Treasury Secretary Ukur Yatani said the money is part of the Sh133 billion equitable share and conditional grants released to the counties for the financial year to June.

The funds disbursed through accounts at the CBK comprise Sh120.2 billion as equitable share and Sh13 billion as conditional grants that mainly funds delivery of health services.

The disclosure by the Treasury came even as county chiefs continue to decry delayed disbursements from the National Treasury that they say have disrupted delivery of services like health and payment of salaries.

“As at January 13, 2021, the balances of the county governments at the Central Bank of Kenya stands at Sh34.6 billion,” Mr Yatani said.

“We appeal to them to make full use of these funds in the meantime as further disbursements from the Exchequer are made in due course.”

Mr Yatani did not disclose the reasons why the funds remain un-collected six months into the financial year.

Efforts to reach out to Council of Governors chair, Wycliffe Oparanya (Kakamega Governor) and his vice, Mwangi Wa Iria (Murang’a Governor) to establish the reasons why the funds are un-collected were futile as calls and texts went un-answered.

Governors had in September last year threatened to shut down hospitals and sent home county employees in efforts to push the Senate to pass the law that guides sharing of funds between the devolved units.

Counties received the first tranche of the funds for the current financial year in October, a delay of three months after Senate agreed on the formula to guide sharing of the funds.

The National Treasury is yet to release monies for November and December due to a cash crunch following the Covid-19 pandemic that has hurt revenue collections.

Mr Yatani said that with the re-opening of the economy and scrapping of the Covid-19 tax reliefs, revenues will pick up and ease the cash crunch that has disrupted flow of money to the county governments.