Kenya: City Assembly Freezes Spending on Projects Amid Looming Cash Crunch

The Nairobi County Assembly has temporarily frozen all development projects being run by the city administration for the financial year ending June 30, 2021 as a cash crunch looms.

The assembly also announced that the county government will operate on less than half of the projected Sh31.4 billion annual budget.

This follows the delay by the Senate in passing the County Revenue Allocation Bill set to give clarity on the equitable revenue share and conditional grants due to the county government as well as how allocations to the Nairobi Metropolitan Service (NMS) will be treated.

While reading the county's budget estimates Monday, the assembly's Budget and Appropriations Committee chairman Chege Mwaura said the delay in the passage of the Bill has made it difficult for the county assembly to effectively appropriate money to the various departments.


This means the county government will be operating on 40 per cent of its Sh31.4 billion budget until such at a time when the appropriations Bill is passed by the county assembly.

"Without the approval of the County Revenue Allocation Bill into law, the county assembly would be engaging in guesswork if it purports to appropriate sums whereas amounts meant to fund more than half of the budget have not been agreed on," said Mr Mwaura.

The Ngara Ward MCA said that for the assembly to come up with its appropriations Bill, Parliament needs to pass the County Revenue Allocation Bill which will give guidance on how much money will be allocated to Nairobi County government as equitable revenue share for the remaining functions.


However, the assembly approved the withdrawal of Sh12.5 billion from the County Revenue Fund to allow for operations to continue and prevent service delivery at City Hall from grinding to a halt.

Nonetheless, the budget committee chairman said that the county government will not use the money for development as there is no authority granted for expenditure on projects.

"The decision to withdraw Sh12.5 billion through the vote on account is a temporary and an important middle ground that grants the county authority to spend certain amounts on recurrent expenditure such as payments of county employees and members' salaries and ensuring seamless delivery of services in critical sectors such as health and education," he said.


Out of the Sh12.5 billion approved for withdrawal, Agriculture sector will get Sh148.9 million, ICT and e-government Sh104.1 million, Liquor Board Sh100 million, Urban Renewal and Housing Sh69.8 million, Emergency Fund Sh50 million, County Public Service Board Sh34.2 million and the Ward Development Fund Sh15 million.

The largest share of Sh3.23 billion has been allocated to the Health sector, Sh2.47 billion to the Finance department while the office of the Governor will receive Sh2.48 billion.

The Environment department will receive Sh816.8 million, county assembly Sh740 million, Education Sh694.8 million, Public Works and Transport Sh573.4 million, Public Service Management Sh499.5 million, Trade and Tourism Sh250.7 million and Urban Planning and Lands Sh209.9 million.

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