Relief as Treasury sends Sh50b to counties

Wednesday, September 18th, 2019 00:00 |
President Uhuru Kenyatta, accompanied by top State officials assents to the Division of Revenue Bill 2019 at State House, Nairobi, yesterday. Photo/PSCU

Zachary Ochuodho and Hillary Mageka 

It was a big relief for counties after the National Treasury disbursed Sh50 billion to ease the biting cash crunch which has besieged counties for the last two months.

This is after President Uhuru Kenyatta signed the Division of Revenue Bill (DoRB) 2019 yesterday, which will see counties receive the cash immediately out of  Sh378.1 billion approved by Senate and the National Assembly.

It will even be a bigger relief for suppliers and contractors of counties as Treasury directed counties to pay delayed payments amounting to Sh40.5 billion immediately out of Sh100 billion pending bills as at the end of February.

The immediate payment will also sort out pending bills to Kenya Medical Supplies Agency for medical supplies to facilitate the delivery of the ongoing Universal Health Coverage  programme, while 25 per cent of the cash or Sh10.1 billion will go to Kenya Revenue Authority in outstanding tax remittances and other statutory deductions.

Recurrent expenditure

Speaking during a press briefing yesterday, acting National Treasury Cabinet Secretary Ukur Yatani, said: “We are releasing Sh50 billion today to cover for July and August period.

We plan to disburse more before October 1 to cover September. The money will hit the counties’ accounts by Friday this week.”

“It should be emphasised that such levels of pending bills generate detrimental economic impact that include contraction in the operations of private firms and stalling of initiatives such as Access to Government Procurement Opportunities (AGPO) which seek to expand economic prospects for target groups,” he added.

He applauded legislators for approving DoRB, which has allocated Sh378.1 billion to the devolved units for both development and recurrent expenditure in the current financial year (2019/20).

He said the amount includes Sh316.5 billion for the equitable share of revenue raised nationally, while Sh61.6 billion comprised of conditional grants for strategic projects and money for the Equalisation Fund.

The total allocation of Sh378.1 billion to county governments represents 36.46 percent of the audited and approved revenue of the National Government for the financial year 2018/19 against the constitutional threshold of 15 per cent.

The delay in approving DoRB was the result of an impasse on allocations pitting the two houses — National Assembly and  Senate — led to non disbursement of funds for July and August 2019, which Treasury according to Yatani drastically affected budget implementation.

Mediation talks

The counties which get the lion’s share of allocation include Nairobi which will receive Sh15.9 billion, Turkana at Sh10.5 billion, Nakuru Sh10.4 billion.

Those who will receive the least include Lamu at Sh2.5 billion, Elgeyo Marakwet (Sh3.8 billion) and Tharaka Nithi (Sh3.9 billion).

The big boys’ club is closely followed by Kiambu, Bungoma, Kitui, Narok and Meru counties in that sequence. 

However, the County Allocation Revenue Bill 2019, which was introduced in Senate yesterday following the meditation talks, will see  Mombasa as the biggest loser in the new county allocation of revenue bill.

Governor Ali Hassan Joho-led government will receive a reduction of Sh1.2 billion translating to Sh7 billion down from Sh8.2 billion.

However, it will be the sixth time the counties of Nairobi, Turkana and Kakamega will be bagging the highest share of allocation since the launch of devolution after the 2013 General Election.

It will be for the second time Kilifi and Nakuru will be joining the league of big boys.

Nairobi will get Sh15. 9 billion compared to the Sh15.7 billion it received in the last financial year, while Turkana will get Sh10.7 billion up from the Sh10.5 billion that the county received in the previous financial year.

Nakuru will be the biggest beneficiary as it will have an increment to Sh10.4 billion from Sh9.4 billion.

Kilifi will pocket Sh10.4 billion slightly lower compared to Sh10.8 billion it got in the previous year and will be closely followed  by Kakamega that will benefit from Sh10.4 billion up from Sh10.3 billion it received in the 2018/19 fiscal year.

On the flip side, Lamu, Tharaka Nithi, Elgeyo Marakwet, Isiolo and Embu counties will get the lowest share of the revenue allocation. The Lamu funding will be reduced from Sh3.5 billion to Sh2.6 billion in 2019/20 budget. 

Tharaka Nithi will have an increase from Sh3.6 billion to Sh3.9 billion, Elgeyo Marakwet will get Sh3.8 billion down from Sh3.7 billion.

Isiolo and Embu counties will get Sh4.2 billion and Sh4.3 billion respectively.

The county governments will also be given an additional allocation of Sh6.2 billion to facilitate the leasing of medical equipment.

Another grant is the allocation for level five hospitals at a cost of Sh4.3 billion which will be distributed to all the 47 county governments.

The level five hospitals will play a key role in the implementation of the Universal Healthcare Coverage, which has already been piloted in four counties of Kisumu, Isiolo, Machakos and Nyeri.

Pending bills

The implementation of the Road Maintenance Fuel Levy fund has been appropriated Sh8.98 billion, which is an increase from Sh8.3 billion in the financial year 2018/19.

Upgrading and rehabilitation of village polytechnics has been allocated Sh2 billion.

Yatani said counties must focus on sorting out pending bills accrued from previous financial years, which had squeezed key growth areas over time.

For the money to be released, however, this will depend on approved budgets at the country governments, whose budgets  must have been ratified by the Office of Controller of Budget.

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