A standoff between governors and the National Treasury over Sh425 billion revenue allocation threatens to paralyse services in the 47 counties.

Yesterday, governors warned that health services would be among those to be adversely affected if Treasury fails to release the money meant to fund devolved operations. They are demanding at least Sh425 billion as shareable revenue to the 47 devolved units but Treasury has committed Sh370 billion — a Sh55 billion shortfall.

The Sh370 billion also falls short of the Sh407 billion recommended by the Commission for Revenue Allocation (CRA) as shareable revenue to county governments.

Governors yesterday insisted they would not accept anything less than the Sh425 billion, accusing Treasury of plunging county governments into financial misery by delaying release of the money.

Council of Governors (CoG) Vice-Chairperson Ahmed Abdullahi, who is also the Wajir Governor, accused Treasury of failing to build consensus with CRA over the shareable revenue. Such a deal would pave the way for disbursement of the money.

“We express our discontent over the National Treasury’s failure to build consensus on the county equitable share of revenue despite recommendation issued by CRA,” Abdullahi said. “As such, the CoG reiterates its position of Sh425 billion as the equitable share for the 2023-2024 financial year.”

He said if the situation is not resolved, services like health would be affected.

“Our health officers are speaking in low tones, enquiring about their welfare. If we are not careful we may have the mother of all strikes, and lose many lives,” he warned.

According to him, some counties were staring at a paralysis of services because workers were yet to receive their salaries.

“There is no way someone who has not received his salary for four months will continue to work when there is no hope the money is forthcoming,” Abdullahi said.

At least 16 counties have not received their disbursements since October.

Devolved functions

Abdullahi lamented that from the Budget Policy Statement (BPS) for this financial year, the national government has been allocated huge sums of money even for functions that are devolved, such as health and agriculture. “The council is apprehensive that the continued allocation of funds set aside for devolved functions to the national government is an affront to devolution. The council shall not relent in its quest to make devolution work,” he said.

After the press conference, governors present headed to Harambee House Annexe for the Intergovernmental Budget and Economic Council (IBEC) meeting chaired by Deputy President Rigathi Gachagua.

Yesterday’s meeting followed a similar one held last week and which failed to resolve the impasse, with frustrated governors now demanding that President William Ruto intervenes. The IBEC meeting was also expected to address the issue of transfer of functions to counties.

The National Treasury has made it clear that it can only increase the 2023/2024 financial year’s shareable revenue from Sh370 billion to Sh380 billion.

The 19th Ordinary session of the IBEC was also expected to deliberate on late disbursement of money to county governments, amounting to Sh103 billion.

On this, Gachagua assured the county chiefs that the national government was committed to ensuring timely disbursement. He said a technical team from the Treasury, the CoG and CRA was agreed on and tasked to streamline any disputed areas on shareable revenue for the 2023/24 year and submit a report in a week.

Controller of Budget Margaret Nyakang’o, who was present, raised the issue of pending bills, the bulk of which accrued under the previous county administrations whose tenure ended in September.

Nairobi leads with the biggest debt burden. The eligible pending bills are estimated at Sh9.6 billion, while ineligible bills are a whopping Sh75.1 billion.

Other counties with huge eligible bills include Kiambu (Sh3.3 billion), Mombasa (Sh2.3 billion), Kajiado (Sh969 million), Meru (925 million), Kisumu (Sh772 million), Machakos (Sh725 million), Kericho (Sh715 million), Vihiga (Sh696 million) and Narok (Sh670 million).