Counties seek Sh100bn devolution bond to curb Treasury cash delays
Kirinyaga County Governor and Council of Governors (CoG) Chairperson Anne Waiguru confers with Kakamega County Governor Fernandes Barasa after a CoG council meeting held at Delta Towers on May 19, 2023. PHOTO | FRANCIS NDERITU | NMG
Governors and senators have joined hands to push for a devolution bond to cushion counties from perennial delays in releasing funds to the devolved units by the National Treasury.
The development comes as devolved units face funding delays, with county governments owed Sh61.1 billion in May and June allocations, nine days to the end of the fiscal year.
To cure the persistent delays that have seen the devolved units stare at paralysis, the Senate and the Council of Governors resolved to engage with the Treasury on the proposal.
“We have agreed that the Senate and the Council of Governors engage with the National Treasury to introduce a devolution bond that would enable the Treasury to meet requests for exchequer releases as they fall due,” said CoG chairperson Anne Waiguru in a joint communiqué with Senate Speaker Amason Kingi.
A brainchild of Senate Majority Leader Aaron Cheruiyot, the two parties said the bond is the only way to ensure timely and adequate resourcing of the devolved units.
He said they would demand the national government to issue a bond specifically for funding devolution and that whatever money the bond attracts be put in a consolidated account.
The Kericho Senator said Kenya could borrow a leaf from the World Bank and China, which have leveraged the same. “We could start with even just Sh100 billion and have the national government know that this is what they will spend in about three to four months,” said Mr Cheruiyot.
This can then be elevated to see the national government issue bonds of between Sh200 billion and Sh300 billion with counties due to receive Sh385 billion as an equitable share of revenue in the financial year ending June 2024.
“If you check over a long period, you will observe that there is always a delay of between two, three or four months most of the time,” said the Senator.
“In between that period, that money will be sufficient such that each county knows that by the second or third of every month, they will have received their expected disbursement on that month.”
The lawmaker argued that a county revenue fund account can be set up at the Central Bank of Kenya to hold the funds.
He said the problem of delayed disbursements was unlikely to go away, given Kenya’s debt burden.
