The Treasury had disbursed 53 percent of the county allocations to the devolved units with three months to the end of the financial year, triggering a cash crunch in the regional governments.
Official data show that the devolved units had received Sh212.8 billion of the Sh399.6 billion in the nine months to March.
This made it difficult for counties to pay salaries, which account for the larger share of their budget, as they freeze development spending, hurting job creation and infrastructure projects.
The disbursement is down from Sh216.3 billion received by counties in the same period a year earlier, which accounted for 58.4 percent of their total allocation for the year.
President William Ruto won a hotly contested election last August on a platform of planning to lift millions out of poverty, but he is facing challenges addressing the high cost of living and growing debt repayments that have triggered a cash squeeze.
Development spending is critical to building infrastructure like roads and sewerage and putting money in private hands through demand for raw materials, which ultimately creates new jobs.
County authorities are the biggest buyers of goods and services at the grassroots, meaning that reduced spending on projects has a negative impact on job creation and cash in circulation.
Cement makers, steel manufacturers, contractors and the thousands of workers who are employed in infrastructure projects all benefit from public spending and feel the pinch in times of project expenditure slowdown.
Counties, which rely primarily on allocations from the national government, have struggled to run critical services such as the purchase of medicines and doctors' salaries as well as clear mounting pending bills.
Delayed payments of salaries have prompted medics in Kisumu, Mombasa, Nyamira, Vihiga, Bomet and Nyandarua counties to issue strike notices.
Half-year data from the Office of the Controller of Budget indicate the devolved units had received only Sh141 billion in the six-month period and had collected Sh13.1 billion from their own sources.
With own-source revenue accounting for only 7.0 percent of total revenue in the first half of the year, the 47 units had spent Sh94.7 billion in payment of salaries and wages.
“Challenges faced by counties are majorly as a result of underperformance of own-source revenue, delayed disbursements by the Treasury, and high level of pending bills,” said the Controller of Budget.
Over the six-month period, the 47 units reported pending bills worth Sh159.9 billion with Nairobi county accounting for 62.7 percent (Sh100.3bn).
Other counties that reported huge amounts of pending bills were Wajir (Sh5.5bn), Kiambu (Sh4.9bn), Mombasa (Sh 4.9bn) and Murang’a (Sh3.1bn).
Personnel emoluments consumed 65 percent of total spending in the six-month period followed by operation and maintenance Sh38.7 billion (27 percent).
Over the half-year period, devolved units have only spent eight percent (Sh11.6bn) on development projects.
