County governments are yet to receive nearly half of their equitable revenue share from the Treasury four months before to the close of the financial year, worsening a cash crunch at the devolved units.
Data published by the Treasury on Friday shows the exchequer had released Sh206.06 billion in equitable share of revenue to the 47 counties by February 29, 2024. This is 53.4 percent of the Sh385.424 billion that the devolved units were allocated for 2023/24.
Article 202 of the Constitution states that revenue raised nationally shall be shared equitably among the national and county governments.
County governments may also be given additional allocations from the national government's share, either conditionally or unconditionally.
Besides the equitable revenue share, the County Governments Additional Allocations Act, 2024 provides additional allocations to the devolved units of Sh46.362 billion for the financial year 2023/24 which will be disbursed through the respective ministries, departments, and agencies.
The delayed disbursements to counties come even as the Treasury faces a cash crunch due to below-par revenue collections.
The Kenya Revenue Authority (KRA) has so far collected Sh1.374 trillion in tax revenue, which is equivalent to 55 percent of the Sh2.495 trillion target for the full financial year.
This means that to hit the tax revenue target for the year, the KRA will have to collect Sh1.121 trillion between this month and June, which is an average of Sh280.25 billion monthly.
But Senators last month warned that the delayed disbursements to counties threaten to paralyse services in the devolved units.
“The government remains committed to ensuring the success of devolution. Delays in disbursing allocations to county governments have had tremendous negative effects over time. This has been due to inadequate revenues flowing to the exchequer,” said the Treasury in the 2024 Budget Policy Statement.
