Deputy President Rigathi Gachagua has asked the governors to clear pending bills at the counties for the private sector to thrive.
Speaking when he addressed the 21st Ordinary Session of the Intergovernmental Budget Economic Council at the Official Residence at Karen, Nairobi, the Deputy President said bills are slowing economic growth, especially for the upcoming investors.
“Some counties are still holding a lot of money, yet there are pending bills. The bills should be settled in the first in first out structure,” the Deputy President said.
The Controller of Budget recently said pending bills increased by Ksh 11.74 billion to reach Ksh 164.76 as of June 2023. This has thrown suppliers into financial crises due to financial challenges, with some facing actions and shut downs.
The law requires that money not spent within the required period is returned to The National Treasury.
The matter formed part of the discussion of the Session, the meeting adopting a resolution.
“It is noted that some counties did not follow the first in first out basis criteria. The council has decided that a meeting be convened involving the Controller of Budget, Council of Governors, and The National Treasury to address and resolve the persistent issue of the pending bills,” read the resolution, presented by the Deputy President.
At the same time, Mr Gachagua called on the counties to pay salaries on time for smooth serviced delivery.
“Delayed salaries should be a thing of the past. You need to establish structures of paying salaries on time. The National Government is ready to support you on this matter,” he said.
On the other hand, the Deputy President asked the counties to adopt technology to meet their own source of revenue targets.
“We urge you to enhance revenue collection by digitising and automating your systems. This will also seal leakages towards meeting revenue collection targets,” he said.
The meeting noted that most counties have consistently failed to meet revenue collection targets since the advent of devolution.
“This shortfall has had adverse effects on service delivery, besides accumulation of pending bills. We acknowledge that the Commission on Revenue Allocation has intervened by disseminating its own source of revenue allocation potential report implementing tax administration and diagnostic assessment tools and formulating the tariff pricing policy,” read part of the resolution.
Mr Gachagua also asked the counties to manage the wage bill below the 35pc of the budget adding that it is one of the ways of saving for development.
The Deputy President assured the governors that the national government is committed to working with them in realization of their mandate for the public good.
“I wish to thank the counties for creating a good working relationship with the National Government. The National Government Administration Officers at the counties have irrevocable instructions to work with the counties for better service. A stable devolution is good for our country,” he said.
One of the areas he pointed out is the distribution of subsidised fertiliser and registration of farmers. As farmers embark on harvesting, Mr Gachagua called for collaboration in saving the harvest.
“I urge the counties to work with the national government in forestalling postharvest losses,” he said.