Counties

Treasury fails to send Sh51bn to counties in six months

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Finance Cabinet Secretary Ukur Yatani. PHOTO | FRANCIS NDERITU | NMG

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Summary

  • The latest data from Treasury shows counties received an equitable share of Sh144.9 billion in the review period against a target of Sh196.1 billion, resulting in cash-flow challenges.
  • Delayed exchequer disbursements usually result in late payment of suppliers and workers’ salaries.
  • Early this week, more than 12,000 Nairobi county workers downed their tools to protest delayed salaries and poor work conditions.

The National Treasury failed to transfer Sh51.2 billion to counties in the six months to December, explaining the cash crunch that hit devolved units.

The latest data from Treasury shows counties received an equitable share of Sh144.9 billion in the review period against a target of Sh196.1 billion, resulting in cash-flow challenges.

“Total transfers to County Governments for the period ending 31st December 2021 amounted to Sh144.9 billion, against a target of Sh196.1 billion,” said Treasury Secretary Ukur Yatani said in the Quarterly Economic and Budgetary Review report for the first half of 2021/2022.

Delayed exchequer disbursements usually result in late payment of suppliers and workers’ salaries.

Early this week, more than 12,000 Nairobi county workers downed their tools to protest delayed salaries and poor work conditions, including non-functioning lifts and toilets, lack of a steady supply of water and uncollected garbage.

Over the past two financial years, several counties risked total paralysis in operations after employees threatened to go on strike over delays in payment of their salary.

Lack of sufficient funds for development means that counties cannot spend on infrastructure projects like roads and sewerage, denying them an opportunity to put money in private hands through demand for raw materials, which ultimately creates new jobs.

County Governors have repeatedly blamed delayed disbursements for their woes, including industrial action and stalled projects.

In the previous financial year, governors threatened to shut down county services and send home staff following a cash crunch due to a stalemate at the senate.

Senators had failed to strike a deal on the formula for sharing Sh316.5 billion among the 47 devolved units resulting in a three-month delay.

Counties are required to prioritise settlement of pending bills to suppliers as well as other statutory dues to enable the concerned institutions to discharge their mandates effectively.

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