Big Blow To Treasury As Governors Threaten To Do This After It Denies Owing Counties Funds

Kenyan governors are threatening to shut down services in their counties due to a financial dispute with the National Treasury. 

The issue, which sparked an emergency meeting of the Council of Governors on Monday, revolves around the disbursement of funds to the devolved units.

 Governors are claiming that their counties are facing severe financial challenges, and they are not receiving the funds promised to them by the national government.

According to the governors, the delay in funds has left many counties struggling to meet their financial obligations, such as paying workers and delivering essential services. 

Wajir Governor and Chairperson of the Council of Governors, Ahmed Abdullahi, expressed his frustration by saying, "We can’t be in November and still talking about disbursements that should have been made back in August." 

He highlighted the growing tension as counties continue to face financial difficulties without clear solutions.

However, Treasury Cabinet Secretary John Mbadi insists that the national government does not owe counties any money, except for the month of November. 

"We have sent counties money...we don’t owe counties any money except for November," Mbadi said. 

He pointed out that a significant amount of money had already been released to counties, totaling Ksh.158 billion since July 2024, the start of the financial year.

Despite this claim, the governors maintain that the funds they have received are insufficient and have not been disbursed on time. 

In addition, the Central Bank of Kenya's report reveals that some counties, like Nairobi City, have large sums of money—such as Ksh.6.4 billion—sitting idle in the bank. 

This situation has raised concerns about the management and allocation of the funds.

The Treasury has accused counties of poor absorption of funds, suggesting that they are not using the resources effectively. 

This accusation has further fueled tensions between the national government and the counties. 

With the governors threatening a shutdown of services if the issue is not resolved, it is clear that this financial dispute could have significant consequences for the country’s devolved system of government.