National Treasury Cabinet Secretary Ukur Yattani has directed all Government Ministries, Departments and Agencies and the County Governments to clear all their pending bills by 30th June 2021.
Yattani in addition said delays in payment of pending bills to businesses that provide services to both National and County Governments have affected the liquidity and operations of these entities.
“In a number of cases, this has led to the closure of businesses and affected livelihoods of the suppliers,” he said.
The Treasury CS urged Parliament to support the Government’s efforts towards enforcing compliance in payment of all verified pending bills by backing the proposal under Article 225 of the Constitution of Kenya to temporarily stop transfers to County Governments that persistently fail to comply with the directive to clear pending bills.
Meanwhile, the County Governments will receive Ksh 7.5 billion as conditional allocations from the National Government share of revenue and Ksh 32.3 billion from development partners, bringing the total allocation to the County Governments for the FY 2021/22 to Ksh 409.9 billion.
“Indeed, this marks a substantial increase compared to Ksh 353.2 billion allocation in the FY 2020/21, a clear testimony of the Government’s commitment to supporting devolution,” said Yattani.
To support County Governments capacities to enhance their own source revenue and reduce over-reliance on equitable share, Yattani says Treasury has rolled out a nationwide capacity building exercise on interventions contained in the National Policy to Support Enhancement of County Governments’ Own-Source Revenue.
The Policy proposes broadening of the revenue bases while enhancing counties revenue administrative capacities.
The policy further proposes a legal framework to ensure that County Governments 82 comply with Article 209(5) of the Constitution of Kenya when formulating their revenue-raising measures.
In this regard, Treasury re-submitted the County Governments (Revenue Raising Process) Bill, 2020 to this August House in early 2020 for consideration.
In February 2020, the National Government and the Nairobi City County Government entered into a mutual agreement in line with Article 187 of the Constitution, through which the Nairobi City County transferred some of its functions to the National Government.
To ensure that the process of such a transfer of functions is fully re-enforced in law, the National Treasury is developing legislation to operationalize Articles 187 and 189 of the Constitution 81 on Transfer of Functions and Cooperation between the National and the County Governments.
According to Yattani, to facilitate the performance of the transferred functions, by NMS, Treasury has proposed to allocate Ksh 27.2 billion which will comprise Ksh 18.0 billion for recurrent expenditure and Ksh 9.2 billion for development expenditure.
Further the Government through a multi-agency task force has reviewed existing revenue management systems with a view to deploying one Integrated County Revenue Management System for use by all the 47 County Governments.
“The task force has completed its work and made appropriate recommendations for consideration by the two levels of Government,” stated Yattani.
By Beth Nyaga