Treasury CS Ukur Yatani has promised to release Sh39 billion to counties by Friday to avert shutdown as he lifted the lid on the financial crisis hitting the government.
Yatani pledged the disbursement when he appeared before a Senate committee to explain the delayed releases, just a day after governors threatened to shut down the devolved units for lack of funds.
They decried delayed cash disbursements amounting to Sh102 billion that has accumulated since January and affected critical services, payment of salaries and statutory deductions and clearance of pending bills.
On Tuesday, Yatani came under fire from members of the Senate Finance and Budget Committee for treating counties like “stepchildren” while national government operations run normally.
“Counties are easily being treated like a stepchild in Kenya. We cannot continue like this. People are going to give up on devolution and shut down counties at some point,” Makueni Senator Mutula Kilonzo Jr said.
Bungoma Senator Moses Wetang’ula questioned why the national government seemed to be operating optimally when counties had been subjected to suffering.
“If you look at what is going on at national government, it is business as usual; military is working, Treasury and Parliament are working but counties are under very severe stress,” the lawmaker said.
Yatani denied any preferential treatment in the release of the funds before going ahead to spill the beans on the financial crisis cutting across the government in the wake of Covid-19 pandemic taking a heavy toll on revenue performance.
“Just because we are giving priority to Parliament and Parliamentary Service Commission, you can think that the rest are also smiling. We have serious issues,” the CS said.
“There is no preferential treatment. It is a challenge of revenue performance as a result of slowed down economic activities. This is not only unique to the counties. We have challenges disbursing funds to MDAs. We are really falling behind,” he added.
Yatani told the committee chaired by Kirinyaga Senator Charles Kibiru that the government faces serious cash flow challenges that have affected operations across the ministries and agencies and the county governments.
Revealing the frustrations and the extent of the dire situation, the CS, who last week unveiled the country’s biggest ever budget of Sh3.6 trillion, said implementation of various government projects has fallen behind as is the disbursement to counties.
“I just want to confirm to you, as at today, our funding sources and quite a number of windows have not been realised,” he told the committee.
The CS, disclosed that the Treasury has pending Exchequer requests running into billions of shilling that it cannot fund because of cash problems.
Though he did not divulge the total amount his ministry is yet to release to national government agencies, the Treasury’s pending disbursements to counties stood at Sh98.1 billion yesterday.
The funds comprise outstanding balance for Nairobi, which has accumulated since January, Sh14.4 billion for some 25 counties for March and allocations for April, May and June for all the 47 devolved governments.