Economy

Treasury asks MPs to unlock Sh39bn county allocations

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The National Treasury has asked the new Parliament to reintroduce and fast-track a Bill that will unlock Sh39 billion in additional allocations to county governments.

Treasury Cabinet Secretary Ukur Yatani said the delayed approval of the County Governments Additional Allocation Bill, 2022 has affected the transfer of funds from donors and development partners to county governments in the financial year 2022/23.

Out of the Sh39 billion stuck at the Treasury, Sh7 billion is conditional grants from the National Government share while Sh32 billion is donor funds meant for specific projects.

A deadlock between the Senate and the National Assembly saw the Bill lapse, denying the county governments billions of shillings meant for projects.

“In this regard, the Bill has to be reintroduced in Parliament for consideration, to ensure timely disbursement of these additional allocations to county governments,” Mr Yatani told Senators during induction training in Naivasha.

In June, the Treasury warned lawmakers that donors may withdraw the Sh39 billion following the stalemate between the two Houses of Parliament over a legal framework for disbursement.

At the time, Mr Yatani told the Mediation committee comprising members from both Houses of Parliament that development partners had raised concerns over the non-movement of conditional grants to the 47 devolved units.

Conditional grants are funds meant for specific projects including health, agriculture, education and water.

Mr Yatani told the new lawmakers that the delay in the transfer of donor cash to county governments was triggered by a court case filed by the Council of Governors (CoG) challenging the inclusion of conditional allocations in the annual Division of Revenue Bill and County Allocation of Revenue Bill.

The delay in the passage of the Bill was also occasioned by the team that was tasked to hammer out an agreeable version of the Bill after it could not agree on whether the proposed law should be perpetual or enacted annually.

While the National Assembly wanted the Bill to be a perpetual law, the Senate pushed for the same to be approved annually by Parliament.

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