Treasury CS Henry Rotich has petitioned
Parliament to reduce county allocations by between Sh15 billion and Sh18 billion in the next financial
year.
Rotich told the Senate Finance committee on Wednesday that the government is 'broke' and unable to raise much in terms of revenue.
The devolved units were allocated
Sh302 billion in the 2017/18 financial year, meaning that in the next one, the amount will decline to between Sh287billion and Sh284 billion.
The Cabinet Secretary said they intend
to introduce an amendment to the Divison of Revenue Act, to reduce monies meant for counties.
"We are running short of revenue. There was a slow-down in business activities because of elections. We are now catching up," he said.
He further explained that the country has a revenue shortfall of Sh70 billion.
"The deficit has implications on expenditure. We have already started austerity measures and are asking Governors to do so too," he noted.
But
Rotich said 'broke' is a loose term "that just means that our estimation for revenue collection has reduced".
"Telling me not to reduce the allocation means the option is to borrow but you are are telling me not to touch borrowing," he told the committee members.
The Minister further told Senators that as
of Tuesday, they had
disbursed Sh134 billion - 43 per cent of what counties are to get.
But he added: "There are a lot of things that even the President wanted to do after elections but the money is not forthcoming and we have had to review [the projects and put them on hold. Nothing stops counties from doing the same."
Governors have been complaining of stalled projects due to the lack of allocations from the national government. But they have also been accused of wasting funds.
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Senators were concerned about Treasury's delays in releasing the funds and had
developed a disbursement schedule to guide the ministry on how to release it.
Treasury is supposed to load county accounts every month but three months to the end of the financial year, only some counties have received 30 per cent of their allocated share.
In February, DP William Ruto said counties will receive Sh368 billion in equitable share of revenue this financial year, up from last year’s Sh326 billion.
Ruto said
Sh54 billion will be in the form of conditional grants.
He noted that
in the last financial year, counties were allocated Sh302 billion and Sh24 billion in conditional grants, bringing the total to Sh326 billion.
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