Treasury CS John Mbadi addresses concern over budget cuts to counties
Mbadi said the claim that the National Treasury was diverting funds was completely out of tune with the normal budgetary process.
Treasury CS John Mbadi has clarified the fuss between the National Treasury and the county governments over the recent budget cuts.
Mbadi explained that the reason for the cuts is the low absorption of the funds by the county governments.
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He said the budget line that faced cuts are donor funded, funds whose expenditure is dependent on the County Governments Additional Allocations Bill 2025, a proposed law he says is stuck in the National Assembly and the Senate.
“Therefore, even if you leave that money in the budget, you will not spend it anymore. As the National Treasury, looking at our fiscal space, instead of allowing that money to sit in the budget and reflect a higher budget, which again would impact our budget organisation, we thought it was wise to reduce that budget because [the funds] are not being spent and they may not be spent,” Mbadi said.
Nevertheless, CS Mbadi said the claim that the National Treasury was diverting funds was completely out of tune with the normal budgetary process.
“That money cannot be spent anywhere. Donors have conditionalities. The conditionalities are that the money was supposed to be spent in the counties. If you don't spend it in the counties, we will not spend it. What we did was remove it from the books,” Mbadi said.
“If Parliament, Senate and the governors are still flexing their muscles on whether to allow some road maintenance levy to go to counties or not, we as National Treasury are not involved in that politics. So, what do we do? Do we allow the figures to still remain there and show a higher budget? The answer is no.”
In a statement issued on Friday last week, the Council of Governors demanded the immediate release of Sh78.03 billion in delayed county equitable share funds and the restoration of Sh38.4 billion diverted from county allocations.
They warned that county services would be shut down if the funds were not released.
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