Cabinet Secretary of the National Treasury Ukur Yatani.
The national treasury disbursed 24.6 billion shillings to the counties, reducing its two-month arrears which threatened to cripple the operations of the decentralized units.
In a statement released yesterday, Cabinet Secretary of the National Treasury Ukur Yatani said cash held by the counties of the Central Bank of Kenya stood at 61 billion shillings with additional funds to be released “in due course. “.
“We hope that the county governments will prioritize the settlement of outstanding supplier invoices as well as other statutory assessments to enable the institutions concerned to carry out their mandates effectively,” he said.
The disbursement comes a day after China agreed to grant Kenya debt repayment leave on loans worth 27 billion shillings due between January and June.
The money released will be used to offset other spending obligations, including disbursements to counties, Yatani said in an interview with Spice FM, a radio station owned by Standard Group.
Besides China, Kenya has also benefited from debt relief from 10 countries under the Paris Club, with the country saving 32.9 billion shillings which will be used to deal with the adverse effects of the pandemic. .
Failure to disburse funds to counties has been a headache for treasury officials, with the Chairman of the Board of Governors (CoG) threatening to take legal action to force the treasury to release 94.7 billion shillings.
Last week, CoG Chairman Wycliffe Oparanya challenged Yatani’s claim that 34.6 billion shillings was inactive in the Central Bank County Revenue Fund (CRF) accounts, saying the money was intended for projects already budgeted by the counties.
He said the money transferred so far as a fair share was 93.9 billion shillings and not 120.2 billion shillings as claimed by the CS, adding that the money did not cover what was due to counties for October, November, December and January.
Yesterday, Kisii Governor James Ongwae also blamed Yatani, saying the county had no money in the Central Bank and that he was paying salaries and making sure service delivery was not disrupted by bank loans.
“What’s in the CRF is from donors and it’s around 200 million shillings,” he said.
The financial stalemate rages on as the Income Allocation Commission (CRA) released recommendations for counties to get 370 billion shillings out of the 1.8 trillion shillings in fiscal year 2021-2022.
However, county heads are already nervous after it emerged that the provision for the conditional allocation from the national government and donors has been included in the county total.
Kisumu Governor Anyang ‘Nyong’o said that although the ARC hinted that it had consulted parliament and the CoG, they had yet to hold a meeting and take a common position.
“We still have to discuss this within the CoG. They consulted yes, but the result is not necessarily what the CoG recommended. We have to meet and look at the same thing, ”he said.
In the radio interview, Yatani said that with the improvement of the economy following the relaxation of the Covid-19 containment measures and therefore the increase in revenue collection, his ministry will grant the priority to disbursements to county governments.
The increase in economic activities in December of last year saw the Kenya Revenue Authority surpass its target for the first time during the Covid-19 period, bringing in more than 166 billion shillings.
[Reporting by Dominic Omondi, Roselyne Obala and Everlyne Kwamboka]
