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Governors are demanding the release of Sh13.8 billion for stalled projects being rolled out in marginalised counties, accusing the National Treasury of frustrating the completion of projects.

The governors have also raised concern over 112 projects financed by the equalisation fund which are yet to be handed over to the counties despite being completed.

Council of Governors (CoG) vice chair Ahmed Abdullahi (Wajir) said that the equalisation fund had proposed allocation of Sh54 billion to marginalised areas.

However, only Sh26.2 billion was approved by Parliament out of which only Sh12.4 billion has been released by the Exchequer, leaving Sh13.8 billion as outstanding.

Marginalised counties

Appearing before the Senate committee on Finance and Budget yesterday, Abdullahi charged that Sh12.4 billion was then released to ministries, departments and agencies (MDAs) where 352 projects were identified in the 14 marginalised counties for implementation.

He explained that a number of projects under the first policy of the equalisation fund in 14 counties have either stalled or not been handed over as a result of the pending bills amounting to Sh3 billion.

The projects included provision of basic services covering water, roads, health facilities and electricity in the marginalised areas.

The CoG official said that contractors have not been paid and consequently they have not handed over the projects to the county governments.

“You find hospitals shut for the last five years and are of no use to the public. This is because the contractors are yet to be paid by the MDAs implementing the projects,” said Abdullahi.

Abdullahi told the Senator Ali Roba led committee to ensure completion of the ongoing and stalled projects under the first policy so that they can be transferred to the counties.

“The Exchequer is in blatant disobedience of the Constitution. They are spreading the funds thin like butter on bread leading to the frustrations,” he said.

At the same time, Commission on Revenue Allocation (CRA) also questioned why the National Treasury was withholding the funds yet all the administrative and regulation hurdles that had bedevilled the fund have been sorted out.

The Commission’s Chief Executive James Katule said they have been on the ground but they are concerned over the actual existence of the projects and their level of completion.

He also said there is dispute over the ownership of the projects with MPS under CDF and the national government both claiming ownership of the projects.

“We have the board and the regulations in place. Now we have to ensure that the balance is released and what has been implemented is paid for,” said Katule.

The Commission’s vice chairperson Koitamet Ole Kina echoed Katule’s sentiments, accusing the National Treasury of going against what the Constitution says.

Commissioner Dr Isabel Waiyaki wondered why the Exchequer is delaying the disbursement of the funds yet every required framework is in place.

“We are done with the second marginalisation policy and we are on the third one but all will not make sense if the policies are not being implemented,” she said.

Pressed on delays in the release of the funds, Equalisation Fund Board chief executive officer Guyo Boru, appearing on behalf of Treasury CS Prof Njuguna Ndung’u, said funds have been released to the MDAs for payment of pending bills for the first policy projects.

“We have released the funds and we are waiting for a report on the status of the projects on March 31, 2023. We will get to know how far they are on the issue of payment of the pending bills as they are well resourced. There is nothing holding them from our side,” said Guyo.

On the balance of Sh13.8 billion, he said they had budgeted for the same in the financial year ending June 2024, only for the National Assembly’s Budget committee to slash the allocation by Sh3.2 billion.

He said in the recent supplementary budget, the Exchequer considered and included Sh6.8 billion being the budget for the financial year ended June 2022 and Sh7.8 billion for the financial year ending June 2024.

Amount approved

The CEO said that although the entitlement is Sh54 billion, Parliament has only approved Sh26.2 billion out of which Sh12.4 billion has been appropriated.

“We are committed to release all the funds once they are appropriated. But we cannot release funds based on what counties are entitled to but on what has been appropriated,” said Guyo.

“Between 2020 and 2021, the fund was in limbo but now that all the instruments are in place, the funds will now flow immediately,” he added.