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Economy

Slowed funding of counties hurts business, job creation

Counties received Sh95.59 billion in a similar period last year. FILE PHOTO | NMG
Counties received Sh95.59 billion in a similar period last year. FILE PHOTO | NMG 

Treasury allocations to counties in the five months to November dropped by a third to Sh65.45 billion slowing business and job creation in the 47 devolved units.

Counties received Sh95.59 billion in a similar period last year and the Sh30.1 billion cut this year has delayed suppliers’ pay, workers’ salaries and frozen projects.

The counties endured a four-month cash crunch following contradictions between the County Allocation of Revenue Act (Cara), 2017 assented to by President Uhuru Kenyatta, and the disbursement schedule approved by the Senate.

The anomaly, which has since been corrected, meant that the Treasury could not release funds to counties. At the close of the first quarter that ended in September, none of the 47 devolved units had received funds, which compelled the Treasury to loan them Sh20.3 billion to pay workers’ salaries.

In the period to November, Nairobi received Sh7.68 billion or nearly half of its allocation, topping the list of counties with the highest share, followed by Kiambu’s Sh3.27 billion, Kakamega Sh2.3 billion, Kilifi Sh2.2 billion and Homa Bay and Narok’s Sh2.1 billion each.

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