Governors have threatened to shut down county operations due to the National Treasury’s delay in releasing crucial funds for devolved units. The Council of Governors (CoG) expressed frustration over the issue, calling the delay “unacceptable.”
They revealed that the National Treasury has not yet disbursed Kes.63.6 billion for the October and November 2024 allocations. By December 2024, 50 percent of these funds will be exhausted, meaning counties will not receive any further disbursements from January 2025 unless the issue is addressed.
“We call upon the Controller of Budget to stop being a bottleneck in this process and ensure counties access their funds promptly. We urge the Senate to expeditiously pass the County Allocation of Revenue Act to resolve this delay,” the CoG stated.
CoG Chairperson and Wajir Governor Ahmed Abdullahi underscored the legal implications of the delay, stating that the government’s failure to release funds violates the law. Abdullahi demanded immediate action from the National Treasury, warning that if the funds are not released, county governments will have no choice but to shut down operations completely.
“Failure to release the funds owed to counties will force County Governments to cease operations entirely,” Abdullahi said.
During a meeting at the CoG offices in Nairobi, Abdullahi was joined by other county chiefs to discuss the matter. The governors revealed that they have been closely monitoring the ongoing discussions in Parliament regarding the Division of Revenue (Amendment) Bill 2024. They expressed full support for the Senate’s decision to retain the county allocation at Ksh400.117 billion, a critical funding level for county operations.
The governors also expressed concern over the continued delay in enacting the County Allocation of Revenue Bill (CARB), even though both houses of Parliament passed the Division of Revenue Bill.
With more than five months into the 2024/25 Financial Year, the County Allocation of Revenue Act has not been assented to, causing ongoing disruptions in county finances.
Additionally, the governors questioned how the National Government continues to receive its shareable revenue, pointing out that the National Assembly passed the Supplementary Appropriations Act 2024, while county governments remain in limbo.
“The Council takes great exception to the National Assembly’s decision to reduce the County Equitable Share by Ksh20 billion. This reduction will severely affect service delivery and could bring counties to a standstill, especially considering that the allocated Ksh400.117 billion is based on historical audited accounts,” Abdullahi added.
The county chiefs also emphasized that the Supplementary Appropriations Act 2024, based on the Division of Revenue Amendment Bill, is unconstitutional and procedurally flawed. They argued that the Act is not aligned with the Division of Revenue Act 2024 and violates Supreme Court Advisory Reference No. 3 of 2019, which ruled that Parliament cannot pass an appropriation bill before finalizing the Division of Revenue Bill.
Abdullahi warned that such actions undermine the principle of Devolution and could deliberately destabilize the devolved units, further weakening county governance.
In addition to the financial issues, the governors raised concerns about pending claims from the National Health Insurance Fund (NHIF) and the Social Health Authority (SHA). They stated that the outstanding debts are significantly hampering the delivery of healthcare services in public health facilities across the country.
“We note that as of May 2024, the total outstanding debt owed to county governments by the defunct NHIF stood at Ksh12.9 billion. So far, only Ksh3.8 billion has been remitted, leaving counties with an outstanding balance of Sh9.1 billion. We urge the SHA to expedite the payment of these pending claims. This will allow timely payments to vendors and ensure effective healthcare services for patients,” the governors explained.
With the situation growing more critical, the governors called for immediate action to address these issues, stressing that without timely funding and healthcare support, county operations will be severely affected.
