Counties are set to receive Kes 42 billion in grants after President William Ruto signed into law a Bill allowing the Exchequer to disburse the funds.
The County Governments Additional Allocations Act 2022 establishes a legal framework for the National Treasury to release long-overdue funds to counties.
The Treasury has cited a lack of enabling legislation as the reason for the delay in passing the Bill.
On November 22, the Senate passed the Bill before referring it to the National Assembly for consideration. The National Assembly debated the Bill on November 30, 2022, and passed it without amendments on December 1, 2022.
“I have transmitted the Bill to His Excellency the President for assent,” Senate Speaker Amason Kingi.
The new law provides for the transfer of conditional allocations from the national government’s revenue share and from development partners to county governments.
It establishes a legal framework for releasing additional national government funding, loans, and grants from development partners to the 47 devolved units in the fiscal year ending June 2023.
Governors have been pleading with Parliament to pass the Bill to release the funds, claiming that the stalemate was impeding service delivery.
Initially, the grants were included in the Division of Revenue Bill, which divides national revenue between the federal and state governments.
However, in a case filed by the Council of Governors, the High Court ruled that the funds be separated, stating that only equitable shares should be captured in the Division of Revenue Bill (DoRB).
The Bill was introduced for its first reading in the 12th Parliament. However, the August House died before it could be signed into law.
Governors have warned that further delays to the legislation will have a negative impact on many projects and programs funded by donors.
The Act allocates Kes 5.6 billion to devolved units for constructing county headquarters and a medical equipment leasing program.
The law also allocates Kes 13.47 billion to 34 counties as an equalisation fund, with Kes 6.62 billion set aside for the fiscal year ending June 2022 and Kes 6.85 billion for the fiscal year ending June 2023.
Another Kes 454 million has been allocated to Tana River, Tharaka-Nithi, and Nyandarua counties that have yet to complete their headquarters construction.
The Act also provides counties with Kes 23.7 billion in development partner loans and grants. Another Kes 5.2 billion has been allocated for the managed equipment service program to all 47 devolved units.
It also includes Kes 3.56 billion in World Bank funding for the National Agricultural and Rural Inclusive Growth Project and Kes 1.99 billion in World Bank funding for the Kenya Climate Smart Agriculture Project.
The World Bank has also contributed Kes 5.9 billion to the Water Sanitation Development Project, and Danida has contributed Kes 667 million to primary health care.
The World Bank has also provided Kes 1.19 billion for emergency locust response, Kes 2.7 billion for an improvement project in informal settlements, and Kes 5.43 billion for locally-led climate change programs.
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