Senate, Assembly wars put Sh39bn donor funds at risk
Three Nigerians suspected to enjoy the backing of a powerful Kenyan politician and two Kenyans wired Sh25.6 billion between October and November 2020. FILE PHOTO | NMG
The National Assembly and the Senate have hit a deadlock over a Bill that seeks to provide a framework for disbursement of the conditional grants from donors.
On Tuesday, the Treasury told Parliament that development partners have raised concerns over non-movement of conditional grants to the 47 devolved units.
Conditional grants are funds meant for specific projects including health, agriculture, education and water.
Donors may withdraw Sh39 billion meant for projects in counties following a stalemate between the two Houses of Parliament over a legal framework for disbursement.
The National Assembly and the Senate have hit a deadlock over a Bill that seeks to provide a framework for disbursement of the conditional grants from donors.
On Tuesday, the Treasury told Parliament that development partners have raised concerns over non-movement of conditional grants to the 47 devolved units.
“We have not disbursed county governments’ grants for this financial year. This is our concern and the concern of development partners.
“Donors are telling us that they have timelines on disbursement of the grants and reporting deadline,”the They are asking us to find another way to disburse the cash because the absorption rate has been very low, sometimes 15 percent due to delays in disbursements,” he said.
The stalemate on a framework for disbursements may deny thousands of businesses, women and youth the opportunity to benefit from the projects.
Conditional grants are funds meant for specific projects including health, agriculture, education and water.
Businesspersons, women and youth could lose lucrative projects if development grants from donors would not be disbursed in the two months that are remaining to close of the current financial year.
Ukur Yatani, the Cabinet Secretary told the mediation committee comprising equal number of MPs from both Houses to make a final decision either way arguing delay in disbursing the Sh39 billion has attracted concerns from development partners.
He said the stalemate has attracted the eyes of development partners who two days ago piled pressure on the Treasury to find an alternative framework to disburse the conditional grants before the close of the financial year in two months’ time.
He said development partners want the national government to take up the grants and give line ministries to implement the projects.
Mr Yatani asked MPs to quickly take a position and unlock the flow of funds to county governments.
The committee on Tuesday failed to reach an agreement on the County Governments Conditional Grants Bill, 2021.
The team that is tasked to hammer out an agreeable version of the Bill could not agree on whether the proposed law should be perpetual or enacted annually.
While the National Assembly wants the Bill to be a perpetual law, the Senate is pushing the same to be approved annually by Parliament.
The stalemate arose after the National Assembly deleted a number of sections of the Bill that originated from the Bill, a perpetual law instead of the Senate position of an annual bill.
This is the point of disagreement between the two Houses that has stalled the approval of the Bill that originated from the Senate.
If the two Houses fail to reach a compromise and one defeats the mediated version of the Bill, the proposed law will be lost.
The Treasury on Tuesday sided with the National Assembly while the Council of Governors (CoG) threw its weight behind the Senate in demanding that the law be approved annually.
“The National Treasury is in support of the National Assembly’s position in making the Bill a perpetual Bill. This is in line with the Public Finance Management Act,” Treasury secretary Ukur Yatani said.
He said the conditional grants disbursement schedules will be factored annually in the Budget Policy Statement and the money appropriated through line ministries.
The CS said the Treasury had consulted the Controller of Budget Margaret Nyakango, the Commission on Revenue Allocation chairperson Jane Kiringai and the Council of Governors finance chairperson Nderitu Mureithi and had agreed that the Bill should be perpetual.
Mr Mureithi rejected the Treasury position and asked the committee to make the Bill an annual law.
“Putting disbursements schedules in the BPS makes it complicated. You can’t open a BPS of budget estimates midway the financial year. What we want is a law that allows the Treasury to disburse money midway if they close a grant with a development partner,” Mr Mureithi said.
