MPs, Senators lock horns over funds to counties amid cash crunch

Counties are staring at a serious financial crisis due to an ongoing stalemate between the Senate and the National Assembly in the mediation committee formed to find a common ground on the Division of Revenue (Amendment) Bill.

The National Assembly's Budget and Appropriation Committee, which is co-chaired by Kiharu MP Ndindi Nyoro and Mandera Senator Ali Roba, failed to reach an agreement on Thursday, throwing counties into further uncertainty at a time resources accruing to the devolved units have been delayed by at least two months.

"Let us be here to mediate and look like we are doing it. People in counties are going without salaries," Nyoro said during the session.

In contention is a sum of Ksh.20 billion that was proposed for reduction by the National Treasury, backed by the National Assembly but rejected by the Senate, which says that once resources have been allocated to the counties, they cannot be taken back.

Attempts to steady the mediation constantly ran into headwinds, with the representatives seemingly unable to cede ground.

"If you don't want to give counties money, you can take that money," Nairobi Senator Edwin Sifuna said.

"If you want to mediate, you must also come with clean hands," Soy MP David Kiplagat said.

"If we can't respect each other, then we are engaging in an exercise in futility," Roba added.

Nyoro told the mediating team that counties require money but the national government is experiencing financial strain owing to the withdrawal of the Finance Bill 2024 and revenue shortfalls, and thus counties should let go of the said Ksh.20 billion.

"We need Ksh.766 billion, which is our deficit. We also owe counties Ksh.30 billion that was not released in the last financial year, so we will give counties Ksh.410 billion," he said.

"What we need to do is put in mind that these cuts are affecting budgets in counties," Roba added.

The joint committee was told that counties are experiencing a cash crunch that has left them at the mercy of bank overdrafts and an advisory from the Attorney General that counties can receive up to 50 percent of the monies based on the last allocation pending resolution of the stand-off.

"What we should be discussing now is how do we raise money to pay counties, not who supports devolution or not," said Nyoro.

Senators have stood their ground that the original Division of Revenue Bill, which allocated counties Ksh.400 billion shillings, must be retained.

The National Assembly, on the other hand, insists that counties must share the revenue shortfalls with the national government.