Mbadi to governors: State can only afford Sh380 billion for counties

The National Treasury has confirmed that only Sh380 billion will be disbursed to counties this financial year, a figure that is Sh20 billion less than previously agreed upon.

Speaking Thursday during a high-level consultative meeting in Naivasha, Nakuru County, attended by National Treasury officials and the Council of Governors’ Committee on Health, National Treasury Cabinet Secretary John Mbadi insisted that the current administration under President William Ruto cannot meet the Sh400 billion demand from the 47 governors.

“We cannot afford to pay Sh400 billion being demanded by the county bosses,” he said.

During his address, Mbadi also criticised the Controller of Budget Margaret Nyakang'o, accusing her office of creating unnecessary delays in the disbursement of funds to the devolved units, claiming they were engaged in "rent-seeking" behaviour.

“Once we transfer money to counties, let that money reach the counties; there should be no bottlenecks,” Mbadi insisted.

The CS expressed a desire for a public forum to voice his concerns directly to Nyakang'o, asserting that his comments were constructive rather than confrontational.

In response, the governors, led by Nandi's Stephen Sang, expressed their frustration over the government's funding cuts, especially after counties had already gone three months without allocations.

“We will not accept anything less than Sh400 billion, and yet you are adding us more roles,” he said.

“If there is no money, I’d rather return the county to the National Government,” said Baringo Governor Benjamin Cheboi.

The debate over county funding intensified last week when the Senate rejected President Ruto's proposal to lower the county allocations from Sh400.1 billion to Sh380 billion for the current financial year.

This decision has led to a mediation process that threatens to delay essential legislation needed to release funds to the counties.

The Senate Finance and Budget Committee supports the original Sh400.1 billion allocations.

“The sharing of the revenue shortfall... appears arbitrary. There is no justification for the reduction of the equitable share by Sh20.12 billion,” reads a report of the committee.

While the proposed Sh380 billion allocation meets the constitutional requirement of at least 15 per cent for counties, it still falls short by Sh5.4 billion compared to the previous year's allocation of Sh385.4 billion.

This reduction is likely to strain county operations and disrupt crucial public services.

The report of the committee that is led by Mandera Senator Ali Roba noted that counties should not shoulder the burden of revenue shortfalls faced by the national government.

“An attempt... to provide that counties shall bear any shortfall in revenues would be unconstitutional,” the report said.

Additionally, counties are facing mandatory expenses from the national government, totalling Sh39.98 billion.

This includes Sh4 billion for the housing levy and Sh5.8 billion required to honour a collective bargaining agreement for doctors, among other obligations.