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COVID-19 has delayed release of county funds, ‘broke’ Treasury says

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In Summary
  • COVID-19 and the subsequent containment measures slowed down the pace of economic activities.
  • Treasury has transferred only KSh133 billion to the counties for the financial year ending June 30.

The adverse effects of COVID-19 is the reason why disbursement of funds to county governments has fallen behind by two months, National Treasury has said.

In a statement on Tuesday, Treasury CS Ukur Yatani says that COVID-19 and the subsequent containment measures slowed down the pace of economic activities in the country.

Yatani says the global pandemic brought with it disruptions in the economy, affecting the ability of the government to raise revenue.

“Nonetheless, the National Treasury notes that as at 13th January 2021, the balances of county governments at the Central Bank of Kenya stands at KES 34.6 billion and appeal to them to make full use of these funds in the meantime, as further disbursements from the Exchequer are made in due course,” reads the statement from CS Yatani.

Treasury, however, remains optimistic that with the reopening of the economy and the reversal of COVID-19 tax reliefs, “the National Treasury will improve from the current Quarter and will prioritise disbursements to county governments with a view to clearing the arrears.”

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Treasury has transferred only KSh133 billion to the counties for the financial year ending June 30. The funds include KSh120.2 billion from counties’ equitable share and KSh13 billion as conditional grants.

This means that Treasury has only disbursed 38 per cent of the expected KSh316.5 billion equitable share, yet the financial year is halfway.

Council of Governors Chairperson Wycliffe Oparanya has blamed the national government of wanting to kill devolution by starving the counties of cash.

The Kakamega governor said that counties have no funds to operate, yet the national government is operating normally without disruptions.

He recently admitted that county governments have no financial capacity to meet the striking health workers’ demands.

“Even if the strike will take a whole year, we have no capacity to handle the demands. We are limited by funds and we cannot lie to the Unions that we will give them money,” said Oparanya.

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