This archive report was first published on 4 August 2020.
Reprieve as Treasury Disburses Sh30 Billion to Counties ¶
On the eve of a Senate debate on a contentious revenue sharing formula, the Treasury has moved to avert a cash crisis in the counties by disbursing Sh29.7 billion to the devolved units.
The move comes as more senators voiced their opposition to the proposed revenue sharing formula, which would see allocations to less populated, marginalized counties reduced while the share of those with bigger populations would increase.
According to Treasury Cabinet Secretary Ukur Yatani, the government had resolved to disburse the close to Sh30 billion which it had held from the previous financial year as 'balance of sharable revenue of the financial year 2019-2020.'
Speaking to People Daily after meeting Attorney General Kihara Kariuki, Senate Speaker Ken Lusaka, and the Controller of Budget Margaret Nyakang'o, Yatani said they had agreed to cushion the counties while awaiting the outcome of the Senate debate.
'We agreed to release their undisbursed balance of the last financial year immediately. Sh29.7 billion will be released to counties by tomorrow,' the CS said.
The announcement was welcomed by Machakos Governor Alfred Mutua, who said it would go a long way in helping counties pay salaries and establish structures to fight the Covid-19 pandemic.
'This is something we had discussed during the summit with the President. The government agreed that it would release the money so that we are able to pay salaries, to buy sanitisers, to buy ambulances, to pay electricity for our health facilities especially at this time of Covid-19,' said Mutua.
Yatani explained that to further shoulder the financial burden counties are bearing in light of reduced incomes as a result of the pandemic, the national government will invoke a Supreme Court decision which allows Treasury to release up to 50 per cent of the last financial year's allocation if senators fail to resolve the impasse in the revenue sharing formula.
According to the Supreme Court advisory, the National Assembly will be required to authorise the withdrawal of money from the Consolidated Fund in the event an impasse occurs between it and the Senate over the Division of Revenue bill in the future.
The apex court said the percentage of money to be withdrawn shall be based on the equitable allocation to the counties in the Division of Revenue Act for the preceding financial year, which translates to 50 per cent of total equitable share.
