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Economy

Treasury’s Sh55bn counties payout eases cash crunch

National Treasury building
National Treasury building. FILE PHOTO | NMG 

Treasury disbursements to counties more than doubled to Sh55 billion in the three months to September, easing a cash crunch that had threatened to stop service delivery.

Data published in the Kenya Gazette shows disbursements increased by Sh31.5 billion or 134 percent from Sh23.5 billion during a similar period a year ago.

Counties had been starved of cash since the start of the financial year in July.

The disbursement delay was caused by a stalemate over a Bill that guides revenue sharing between the national government and the devolved units.

The cash hit the counties’ Revenue Fund accounts within a week after the Senate approved a disbursement schedule which guides the National Treasury in the release of funds and assists counties in making their budgets.

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“The disbursements for July, August and September should hit the counties’ Revenue Fund accounts within seven days in full,” Senate Finance Committee chairman Mutula Kilonzo Jnr said after Senate approved the disbursement schedule on September 24.

Amendments to the County Allocation Revenue Act (Cara) for the current financial year demand that Treasury remits first quarter of shareable revenue to counties in arrears and within seven days of Senate approving the schedule.

In the four months to October in the financial year to June 2018, the Treasury did not release county funds due to contradictions in the Senate’s approved disbursement schedule and the cash allocation law President Uhuru Kenyatta approved.

Delayed dispatch of funds has led to projects stalling, delayed workers’ salaries and frozen payments to suppliers, slowing down operations in the regional governments.

The Constitution requires the National Treasury to disburse counties’ share of revenue by the 15th date of every month.

In the latest disbursement, Nairobi got the lion’s share of Sh2.7 billion, followed by Nakuru (Sh1.8 billion), Kakamega (Sh1.8 billion) and Mandera (Sh1.7 billion).

Lamu received the least (Sh451.5 million) followed by Elgeyo Marakwet and Tharaka Nithi at Sh682.8 million and Sh682.8 million respectively.

Total equitable share allocation to the counties in the year starting July is Sh316.5 billion.

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