Kenya's Council of Governors tells State to end cash crunch

The Deputy President William Ruto (C), the Governor Wycliffe Oparanya (L) and the CS for Finance Henry Rotich arrive for the two day national conference on county own resource revenue enhancement workshop at Great Rift Valley Lodge Naivasha. The DP dismissed allegations that the national government had plans to retake over health sector which is facing serious challenges. Pix Antony Gitonga

The Council of Governors (CoG) has asked the Government to suspend all new projects to deal with a financial crisis that has hit the nation.

CoG Finance Committee Chairman Wycliffe Oparanya, said the State should focus on completing old projects before initiating new ones.

He said the financial crunch was as a result of the Government spending more than it collects.

"The Government is strained due to lack of funds. It is clear the Government is broke because it has over expenditure against limited funds collected as revenue. Tax collection is projected at Sh1.2 trillion, yet the Government budget stands at Sh2.37 trillion," said Oparanya.

The Kakamega governor said the crisis had paralysed development projects in counties.

He revealed that county governments had not received funds for the three months of August, September and October.

"The Government owes counties arrears for August, September and October. This has put a halt on operations at the county level. We owe suppliers their money and some counties are unable to pay salaries," he said.

He said there was tension in the devolved units since contractors, suppliers and county staff had not been paid.

He said some counties were unable to pay debts and initiate development projects as they were financially crippled.

"Some counties are completely broke. They are unable to pay debts and this has created tension in management. We are already experiencing the wrath of contractors and suppliers who are demanding their dues," Oparanya said.

Oparanya said CoG had engaged Treasury Cabinet Secretary Henry Rotich to address the challenge.