Governors reject Treasury's plan to slash budget by Sh5bn

When the Council of Governors Led by Ann Waiguru held a consultative meeting with the Ministry of Health to discuss the implementation of Universal Health Coverage in Kenya and, the transition from NHIF to SHIF. [Courtesy, MoH]

Governors yesterday rejected the Treasury’s plan to reduce budgetary allocation to devolved units in the current financial year by Sh5 billion.

They have also called for the immediate release of Sh63.6 billion owed to county governments for May and June 2024 by the National Treasury.

“We wish to state unequivocally that the council rejects this proposal in totality,” said Council of Governors (CoG) Chairperson Anne Waiguru, at the council’s headquarters in Nairobi.

“The decision undermines devolution and jeopardizes essential services for millions of Kenyans.”

The Division of Revenue Act, of 2024 allocated counties Sh400.12 billion. Waiguru also cited Section 51 of the law, which stipulates that any shortfall in nationally raised revenue should be borne by the national government, not counties.

She said the Treasury retained the county equitable share as outlined in the Act after the mediated process.

They said many counties were struggling to pay salaries, noting that allocations for April were only received recently.

“We are now asking that the allocation for May and June be disbursed so that we can meet our obligations, especially in health and paying healthcare workers and county civil servants,” the chairperson said.

The governors further raised concerns about delays in unbundling of functions and transfer of resources to counties.

They added that despite the completion of a consultation process in March 2024, the transferred functions have not been gazetted three months on. The CoG views this delay as a “clawback on devolution” affecting all 14 devolved sectors.

They further took a swipe at the Water Service Regulatory Board’s public consultation on licensing Athi Water Works Development Agency, which, according to them, conflicts with Nairobi County’s mandate.

“We have continuously witnessed outright clawback on devolution. For instance, the Water Service Regulatory Board (Wasreb), has issued a notice for a public consultation meeting regarding the licensing of Athi Water Works Development Agency as a provider for the Northern Collector Tunnel,” Waiguru said.

Addressing the implementation of Universal Health Coverage (UHC), The Council chair also revealed that several agreements were struck in a recent meeting with Health Cabinet Secretary Susan Nakhumicha.

The governors also called for the payment of Sh8 billion owed to county health facilities by the defunct National Health Insurance Fund (NHIF), as the country transitions to the new Social Health Authority.

Additionally, the county bosses stressed the need to settle these debts for a smooth transition, particularly with outstanding bills at Kenya Medical Supplies Authority (Kemsa), which they said requires a resolution by the National Government.

“It will not be possible to settle those debts for Kemsa unless we get our full disbursement, because we have to make a hard choice between paying the debt for Kemsa and paying salaries for the workers who are working in those hospitals,” said Tharaka Nithi Governor Muthomi Njuki, who also chairs the Council of Governors’ Health Committee.

Njuki said counties are struggling due to inconsistent funding. He also called for a consistent disbursement pattern, referencing President Ruto’s precedent of clearing all dues by the fiscal year’s end.