NAIROBI, Kenya – County governments are on the brink of financial paralysis as the National Treasury delays releasing over Sh60 billion meant for their operations.
Controller of Budget Margaret Nyakang’o revealed counties have not received disbursements since November 2024, forcing many to rely on dwindling reserves to meet obligations like December salaries.
“Most counties have less than Sh100 million in their accounts. They are using that to pay December salaries because they have not received any funds since November,” Nyakang’o said.
She warned that counties, particularly those heavily reliant on Treasury funding, could soon face a cash crunch.
The delays threaten to disrupt the provision of essential services and development projects.
The Treasury has previously attributed such hold-ups to declining revenues and mounting debt obligations.
This is not the first time counties have faced delayed disbursements.
Last year, the Treasury released over Sh100 billion in a single month to avoid a crisis following a four-month delay.
At the time, governors threatened to shut down operations due to the stalled funds.
“We can’t be in November and still be talking about disbursements for August,” Council of Governors chairperson Ahmed Abdullahi said.
By law, the Treasury is required to release counties’ equitable share of revenue by the 15th of every month, as stipulated under Section 17 of the Public Finance Management Act, 2012. However, this timeline is rarely adhered to.
Treasury Cabinet Secretary John Mbadi previously assured counties of timely disbursements, stating that funds through October 2024 had been transferred as of November last year.
“Let them pay workers. Let them make this country liquid because there is money for them,” Mbadi said in November.
The continued delays highlight persistent challenges in the financial management of devolution.
Treasury data shows that county governments received Sh3.5 trillion over the past 11 years, surpassing the constitutional minimum of 15 percent of the national budget.
However, full disbursement of funds has been inconsistent, with exceptions noted during the 2019/20, 2021/22, and 2023/24 financial years.
Governors are now left grappling with how to sustain critical operations amid uncertainty over when the Treasury will unlock the pending Sh63.6 billion for October and November allocations.
