Calls for county shutdown gain heat as cash crunch bites

Governors are pushing for a total shutdown of counties to force the National Treasury to release funds to counties as a biting cash crunch threatens to bring vital operations to a halt.

As the wait continues, county workers claim they are barely surviving while others are contemplating quitting the workforce as they grapple with huge debts.

Council of Governors (CoG) Finance, Planning, and Economy Committee Chairperson Fernandes Barasa says the National Treasury owes counties Sh104 billion for a period of three months.

Barasa said governors are unable to perform their duties effectively and implement their development projects adding that critical services in the counties are at a standstill.

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“Governors had their agendas and development projects to implement. But it is becoming difficult due to erratic disbursement of funds which has made many counties accrue pending bills,” said Barasa.

Yesterday, Trans Nzoia Governor George Natembeya said the only solution to the financial woes is a total shutdown of counties.

Natembeya asked the Council of Governors (CoG) to shut down the devolved units, claiming that major activities in counties have been paralysed thanks to the delay in the release of sharable revenue by the National Treasury.

“I am asking the CoG to seriously consider closing all the counties. What is the point of continuing operating if the national government cannot give us the funds we need to function? It would be better to shut down operations than to keep struggling like this,” Natembeya said. He painted a very grim picture of the situation.

Yesterday, workers in several counties told The Standard they are unable to meet their families’ financial obligations while others claimed they had been kicked out of their homes as a result of the delays.

In Kisumu, Joseph Oyugi, a contractor claimed they have been forced to live on debt. 

“I have been living on debts. Even if I receive my pay, it all goes to paying debts. This is not sustainable,” he said.

He is among thousands of contractors who are struggling to make ends meet as the tough economic conditions, coupled with the delays in offsetting their dues, continue to bite.

At the Coast, most counties have turned to the costly monthly salary overdrafts due to delays in the disbursement of shareable revenue and low revenue collections to avert industrial strikes.

Officials of the six counties, Mombasa, Taita Taveta, Tana River, Kwale, and Kilifi, said they had invented a “secret plan to navigate the crises” but sources said they all depend on overdrafts.

“It is through wisdom we can find ways to pay the salaries. National government’s last disbursement was three months ago,” said Mombasa Governor Abdulswamad Nassir.

Mombasa Kenya Medical Practitioners, and Dentist Union (KMPDU) Secretary Ghalib Ali said salaries for all medical staff are up to date. The county had also purchased drugs for hospitals.

“On salaries, we are up to date. Even our third-party deductions have been paid. The only thing we are fighting for now is promotions,” Dr Ali said.

In 2022, Mombasa signed a Memorandum of Understanding (MOU) with KCB to guarantee timely remittance of staff salaries and other dues. It is not clear how much interest the lender charges the county but most salary advances attract a rate of up to 17 per cent.

In Taita Taveta, the Union of Kenya Civil Servants (UKCS) has vowed to join the medical workers’ strike today if the county fails to remit two financial year statutory deductions amounting to Sh1 billion.

“The workers’ salary is up to date,” said Joyce Nyange, an employee of Taita Taveta County, adding the county has a deal with financial institutions to pay the salaries on time.

Last week, acting Finance and Economic Planning Executive Martine Tairo said the county was struggling due to the failure of the national government to disburse the shareable revenue.

“It is true there is a major problem. Third-party deductions were deducted and were never remitted and the county has no funds to clear the county debts,” Tairo told the assembly yesterday.

In Rift Valley, however, a majority of counties are up to date with payments of salaries after counties entered into agreements with banks. Other functions, however, are facing uncertain times.

Workers in Narok, Kericho, Nakuru, Bomet, Nyandarua and Baringo counties have received their salaries that had been delayed for over two months.

A similar situation was reported in Narok, Bomet, Nyandarua and Samburu counties.

Report by Martin Ndiema, Benard Lusigi, Clinton Ambujo, Benard Sanga, Nikko Tanui, James Munyeki, Yvonne Chepkwony and Michael Saitoti.