Counties will wait longer to receive conditional grants after the Senate rejected amendments by the National Assembly on the County Governments Grants Bill, 2021.
The Bill which was sponsored by Senate Finance and Budget Committee chairman Charles Kibiru (Kirinyaga) is meant to come up with a legal framework for the disbursement of conditional grants from the national government and donors to county governments.
“The Bill proposes to allocate county governments conditional allocations amounting to Sh7.537 billion from the national government share of revenue raised nationally in line with Article 202(2) of the Constitution and Sh32.343 billion as conditional allocations financed from loans and grants from development partners,” reads the Bill in part.
Some of the grants mentioned in the Bill include Sh2.2 billion for the World Bank, Sh701 million from Danish International Development Agency (Danida) and Sh5 billion for the Water and Sanitation Development Project (WSDP) credited by the World Bank.
Amendments made on the Bill include deleting the word “grants” and “conditional” and replacing them with “additional allocation”- changes the Senate Finance and Budget Committee says overhauls the entire principle of the Bill and converts it to a money Bill.
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The Amendments state that additional allocation will comprise of resources required for transfer of function to counties from the national government, loans and grants from development partners.
“The National Treasury shall facilitate any agreement between a county government and a development partner and shall table the agreements in the National Assembly and the Senate before inclusion in the Budget Policy Statement,” reads the amendment document in part.
The amendments are a stark difference from the initial Senate Bill which required the National Treasury to enter into an agreement with the respective counties which involves a layered process pulling in the county assembly, county executive, the public, the Senate and the Treasury.
“By changing the long title and the short title of the Bill, would leave out conditional allocations from the processing of loans and grants from the development partners which form part of the transfers to the county governments,” said Kibiru.
He further stated that the changes made by the National Assembly defeat the principal object of the Bill and amount to its complete erosion.
“We reject the amendments because this is a Bill we thought through. We met a lot of stakeholders including the Council of Governors (CoG), Commission on Revenue Allocation (CRA), the Governor of the Central Bank, the Treasury and the Attorney General,” argued Kibiru.
The Bill was engendered in May 2021 after the High Court ruled out the allocation of conditional grants from the Division of Revenue Bill. According to the court, only matters of division of nationally raised revenue between the national and county governments are to be included in the Division of Revenue Bill.
According to the Bill, the Treasury shall enter into an agreement with the respective county government for the transfer of respective conditional allocation made to the county government.
In the financial year 2021/2022, no county has received grants a move that has denied the devolved units crucial funds for development projects.
According to the law, the Bill was to go through mediation that normally attempts to build consensus and concurrence on contended provisions of a Bill or the entire Bill. The move is to eventually come up with an agreed version of the Bill that can be passed by both Houses.
