Why Treasury is opposed to a CDF-type fund in counties

The Treasury has opposed a bill seeking to create an equivalent of the Constituency Development Fund at the ward level, saying it claws back the fiscal powers of county executives.

If enacted, the Treasury said, the bill will entrench inequalities and marginalisation of some communities.

It argued that enacting the bill may lead to double allocations in some counties, spread the resources thin and reduce the capacity of county governments to fund some high capacity development programmes.

Through Nelson Gaichuhie, the chief administrative secretary in the ministry, the Treasury argued that counties are distinct entities, which derive their operational powers through boundaries set by law, warning that these powers do not extend to appropriating funds outside the law. It thus wants the sponsor of the bill to withdraw it.

The County Wards Development Equalisation Bill, 2018, sponsored by Murang’a Senator Irungu Kang’ata who says the bill aims at ensuring equity in distribution of resources.

But the Treasury argued that only a county executive has powers under the Public Finance Management Act (PFMA) to create a fund. 

“The sponsor has not explained whether the bill complies with the requirements of establishing such funds as provided in the PFM Act,” said Mr Gaichuhie when he appeared before the Senate Finance and Budget Committee during the public hearings on the bill.

He told the committee that enacting the bill may lead to double allocations in some counties, spread the resources thin and reduce the capacity of county governments to fund some high capacity development programmes.

Controller of Budget Agnes Odhiambo is also opposed to the bill, arguing that the county assemblies have the necessary powers to ensure the objective of the bill is achieved.