After two months of the 2024/25 without funds, the National Treasury wired KSh 32.8B to counties in September. This marks the first disbursement to the devolved units in the new financial year.
Parliament is accused of dragging legislation of a framework to enable fresh disbursements from the exchequer. The legal hurdle led to the freezing and delay of the funds.
The Legal Hurdle
The 2024 Finance Bill rejection led to the freezing of county funding and the reintroduction of the County Allocation of Revenue Bill and the Division of Revenue Bill.
This triggered a cash blockage to the counties hurting workers’ salaries and suppliers.
Intervention of the Attorney General
Treasury didn’t have a problem funding the counties; the issue was largely legal following the rejection of the Finance Bill.
“There are legal experts who felt that we couldn’t give the counties money unless Parliament passes the county revenue allocation bill and the division of revenue bill,” Treasury Cabinet Secretary John Mbadi said.
The Treasury revealed that it has begun fresh disbursements to counties on the advice of the Attorney General’s office.
It said that Dorcas Owour’s office has allowed for the disbursement of funds of up to 50% of the previously approved county funding framework.
“I personally wrote to the Attorney General to get her opinion, and it is in concurrence with my thinking and so we’ve started disbursing funds. I am aware that we will be releasing the August allocation this week so we will only be in arrears for September.” said John Mbadi, The Treasury CS.
The Numbers
The statement of actual exchequer revenues and net exchequer issues covering the period to September 30, 2024, reveals the fresh funding that complements Sh30.8 B sent to the units earlier in this financial year to cover arrears from the 2023/24 fiscal period.
Counties have now received a combined Sh63.5 billion since July 1 including the arrears for June 2024.
“I’ll Clear Arrears Before The End of the Year”
Previous delays in funding counties were due to the underperformance of revenues.
The exchequer says it’s seeking to clear arrears to counties by the end of the calendar year.
“My strategy is to have all of the arrears cleared by the end of the calendar year 2024,” Mr Mbadi said.
