The Intergovernmental Budget and Economic Council (IBEC) has approved 370 billion shillings for county governments against the proposed 751.45 billion, for the 2022-2023 financial year.
The council, which was chaired by Deputy President William Ruto, cited public debt and the Covid-19 situation in the country as the major cause of capping the money to 370 billion shillings.
“After discussions and considering many factors including our debt levels and other alternative measures of raising revenue, the council with the concurrence of the council of governors have approved last year level of 370 billion to be the amount due to counties,” Ruto said.
“Let’s appreciate the situation we are in as a country and tighten our belts to ensure we don’t exceed commitment that cannot be funded by revenues and other measures the government is undertaking,” He added.
The Council of Governors had proposed a 751.45 billion shillings and backed up the Constitution of Kenya (Amendment) Bill, 2020 commonly known as the Building Bridges Initiative Bill which proposes an allocation of 35 percent of the total revenue by the Kenya Revenue Authority.
The High Court and the Court of Appeal, however, dismissed the bill terming it illegal and unconstitutional. It’s currently pending in the Supreme Court after an appeal was filed.
On the issue of management of pending bills, William Ruto noted that there will be a meeting chaired by the Controller of Budget and will include the Treasury, Auditor general, and Council of Governors, to check and recommend better mechanisms on how they can be dealt with.
The continuous delay in payment of pending bills has negatively affected businesses and the economy at large.
The Intergovernmental Budget and Economic Council have also agreed that counties can now borrow loans which will be guaranteed by the county government and the county assembly. Laikipia county will be the first to reap from this agreement.
“We have been working on the framework for the last three years and Laikipia county becomes the first county to meet the rigorous criteria set out for counties to meet so that they can borrow. The borrowing will be for the productivity of counties. you cannot borrow for recurrent expenditures, the law is clear on this,” said Ruto.