Governors have asked the Treasury to release Sh59 billion owed to counties within two weeks to facilitate clearing of pending bills as the country reopens its economy gradually.
The Treasury has disbursed Sh257 billion of the Sh316 billion sharable revenue to the devolved units in the current financial year that ends on June 31.
The delayed release of funds, coupled with poor own-revenue collections, have resulted in a cash crunch that has seen counties struggle to meet their financial obligations in good time, leading to an increase in pending bills.
“We, therefore, urge the National Treasury to immediately disburse the remaining funds to county governments to enable them meet their commitments for the current financial year and also enable them pay the pending bills,” said Council of Governors chairman Wycliffe Oparanya.
The 47 counties have since cleared 71 percent of their pending bills, which is equivalent to Sh37.6 billion, according to the Council of Governors data.
The Constitution requires the Treasury to disburse to the counties a share of revenue by the 15th date of every month.
Late dispatch of funds has led to projects stalling, delayed workers’ salaries and frozen payments to suppliers, slowing down operations in the counties.
Last year, companies complained of accumulating pending bills amid credit rationing by commercial banks due to interest rate capping that had forced them to put on hold investment and expansion plans, hitting creation of jobs for the rising unemployed skilled youth.
President Uhuru Kenyatta consequently directed ministries, departments and agencies to prioritise payment of debts to companies for goods and services supplied, while the Treasury pegged release of funds to the counties on progress in clearing arrears to suppliers.