County Governments will be allocated an additional Sh53.5 billion in the 2021/2022 financial year, the Intergovernmental Budget and Economic Council chaired by Deputy President William Ruto has agreed today.
The new development means the devolved units will get an accumulated amount of Sh409.88 billion in the period under consideration.
The figure comprises equitable share of Sh370 billion, conditional allocations from the share of National Government revenue of Sh7.53 billion and conditional allocations from proceeds of loans and grants by development partners of Sh32.34 billion.
“The increase in resources will facilitate post-COVID-19 economic recovery at the counties as well as ensure sustained service delivery,” explained Dr Ruto.
The Deputy President told the meeting the proposed County Governments’ equitable share of revenue raised nationally for the financial year 2021/22 was arrived at by adjusting the counties’ 2020/21 financial year allocation of Sh316.5 billion by Sh36.1 billion and converting four existing conditional grants to County Governments into unconditional grants.
The growth, he argued, derived from anticipated improvement in revenues raised nationally in the 2021/2022 fiscal period when the effects of COVID-19 are expected to ease.
The meeting was attended by Treasury Cabinet Secretary Ukur Yattani, Governors, Commission for Revenue Allocation Chairperson Dr Jane Kiringai, Controller of Budget Dr Margaret Nyakang’o, Permanent Secretaries and County Executive Committee Members.
The Deputy President asked the Treasury, the Office of the Auditor General and the Counties to work together to establish a committee charged with pending bills.
He said the new mechanism will offer an accurate picture of what devolved units owe their suppliers, most of whom are small businesses, paving way for the timely settlement of the obligations.
Mr Yattani noted that the pending bills issue was still a challenge not only at the counties but even at the national level.
“A permanent solution to this problem will lead to resources trickling down to small businesses hence stimulate economic growth,” said the CS.