In a significant development for Kenya’s county governments, President William Ruto announced on Sunday, June 25, 2023, that the national government had successfully cleared all outstanding disbursements owed to the counties for the financial year ending June 30, 2023. With this announcement, President Ruto assured county governors that they now have access to the funds required to continue their essential work of serving their citizens.
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The late release of funds had been a bone of contention between the national government and county governments. President Ruto acknowledged the challenges faced by the counties and assured them that his administration would prioritize revenue collection to address the perennial cash crisis while avoiding excessive borrowing.
This development comes after several counties threatened to shut down due to approximately Ksh100 billion owed to them by the national government. The delay in disbursements had affected service delivery and development in the counties, prompting concerns about the functioning of essential public services and forcing county administrations to focus on recurrent expenditures, particularly salary payments, with limited funds available for development projects.
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According to a recent report by the Controller of Budget, the 47 counties had accumulated pending bills amounting to Ksh158 billion as of February 2023. Notably, Nairobi accounted for the largest share of these pending bills at 63.2 percent. Other counties with substantial pending bills include Wajir, Ksh 5.50 billion; Kiambu, Ksh 4.98 billion; Mombasa, Ksh 4.97 billion; Machakos, Ksh 2.88 billion; and Muranga, Ksh 2.57 billion.
The third-quarter report released indicated only 12 percent of the budget released to counties between July 2022 and March 2023 was used to finance development projects, compared to the requirement of at least 30 percent.
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Only Ksh 29.73 billion was spent on bankrolling development projects in the Ksh 239.67 billion released to counties. Ksh 135.85 billion (56.7 percent) was channelled to pay salaries, while Ksh 74.09 billion (30.9 percent) was used on operations and maintenance.
Moving forward, it is expected that with the timely disbursement of funds, county governments will be able to allocate resources to both recurrent expenditures and development projects. By providing adequate and timely funding, the government strengthens the capacity of county governments to address local needs and promote sustainable development at the grassroots level.
