Nakuru county government debt hits Sh438 million

Nakuru Governor Susan Kihika. [Daniel Chege, Standard]

The Nakuru county government's debt has surpassed Sh438 million, a report by the County Assembly’s Committee on Budget and Appropriation has revealed.

The report, tabled on Tuesday before the assembly by the committee chairman Alex Mbugua, shows that the county owes Kenya Revenue Authority (KRA), Kenya Power Company and Local Authorities Pensions Trust (LapTrust).

According to the report relating to the second Supplementary Budget estimates for the financial year 2023/2024, the county owes KRA Sh240 million.

“The KRA demand notice stands at Sh240 million but only Sh100 million was provided for in the supplementary budget, leaving a deficit of Sh140 million,” read the report.

The county owes Kenya Power Company at least Sh200 million and LapTrust 98 million.

Mbugua said that investigations by the committee showed that there was a need to realign various departments’ funding, depending on emerging priorities.

One of the priorities, the committee identified was meeting the World Bank programmes after it emerged that it reduced its conditional grant.

First, the committee took note that the World Bank reduced the National Agricultural Value Chain Development Project (NAVCDP) grant by Sh50 million.

The World Bank is also said to have reduced its grant to National Agricultural and Rural Inclusive Growth Projects (NARIGP) by Sh145 million.

“World Bank reduced its conditional grants for Kenya Informal Settlement Improvement Project II (KISIP II) by Sh150 million,” read the report in part.

However, the report showed that the World Bank increased the Financing Locally-Led Climate Action (FLLOCA) Program County Climate Resilience Investment Grant by 63.21 million.

The report further shows that the national government’s conditional grant for aggregated Industrial Parks Programmes was also increased by Sh150 million.

The committee regretted that the county government continues to report pending bills and inherited debt.

“The pending bills have a negative impact on the business community as well as the economy in general,” the report reads.

To tackle the bills, the committee urged the county to fast-track the implementation of projects across departments, to ensure absorption of the budget.

Further, the committee called on the county to put in place measures that would ensure set revenue targets are achieved.

This is after the report revealed that out of Sh1.9 billion approved budget and Sh2.1 billion supplementary budget, the actual collection until March this year was Sh1.33 billion.

The committee stressed that there was a need for re-allocation from different departments to reflect the current economic reality.

The report adopted by the assembly is pushing for the approval of the supplementary budget before the year ends in June.

In the budget, allocation to the Department of Water, Energy, Environment, Natural Resources and Climate Change will be 7.5 per cent of the total budget, second after infrastructure at 8.8 per cent.

In total, the department will receive Sh1.75 billion including Sh242.22 million for compensating employees, operations and maintenance (Sh95.73 million), total recurrent expenditure (Sh337.95 million) and Development expenditure (Sh1.42 billion).