Nairobi — President William Ruto has boasted that his administration has cleared all the arrears on equitable share disbursement to counties following heavy criticism from his opponents.
Azimio La Umoja One Kenya Coalition had accused the government of stifling devolution by affecting service delivery and development due to delays in exchequer disbursement.
Speaking during an inter-denominational service in Kajiado County on Sunday, the President stated that unlike his predecessor, he has managed to release all revenue owed to counties by the National Government.
"They were quarreling me six months ago but today I have paid all the arrears. There's no county demanding even a shilling from me. Last year they crossed the financial year with debt but this year I decided not to cross with county debt," Ruto stated.
The outstanding funds were for the allocation of May and June which had delayed due to the cash crunch.
He however, explained that his government will not borrow domestic or external debt to solve the perennial cash crisis saying his administration will bank on revenue collection.
"The governors told me that their money had been delayed and that the National Government is sabotaging the counties.I told them that I will not borrow anyhowly we would rather wait for ome month so that we collect revenue from Kenyans,"Ruto said.
Cash Crisis
The late release of funds by the Treasury has been at the centre of a clash between the two levels of government.
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For months since Ruto assumed office,County governments had warned they could grind to a halt if National Treasury fails to address delays in disbursements.
The cash crisis facing the government has forced the devolved units to focus on recurrent expenditure with minimal spending on development projects.
With the delays in the disbursement of the equitable share across the 47 counties, the county bosses have focused on paying salaries to avoid stifling operations in counties.
In the third-quarter report released by Controller of Budget (COB) Margret Nyakang'o on Wednesday only 12 percent of the budget released to counties between July 2022 to March 2023 was used to finance development projects.
In the figures released, in the Sh239.67 billion released to counties, only Sh29.73 billion was spent on bankrolling development projects.
The aggregate development expenditure allocation requires that at least 30 percent of the budget be allocated for development programs.
The huge chunk of Sh135.85 billion (56.7 percent) was channeled to pay salaries while Sh74.09 (30.9 percent) billion was used on operations and maintenance.
"When you have limited incomes, there is certain things that you need to prioritize.When revenues are limited, you would rather go for the most urgent and here we are talking about salaries. When cash flows are limited, development suffers," Nyakang'o said.
Nyakang'o mentioned that the situation of low spending when it comes to budget allocation might be worsened due to shrinking revenue.
"As the year progress if revenue does not come in, they (Counties) prioritises salaries and that is why we end up with low development," she said.
