Shared funds get governors tough budget balancing act

Top on the list of those with the toughest assignment are governors Evans Kidero of Nairobi (centre), Hassan Joho of Mombasa (right), Jack Ranguma of Kisumu (left) and Kinuthia Mbugua of Nakuru who inherited huge debts from the defunct local authorities, but prepared ambitious budget estimates pegged mainly on direct financing from the national government. Photos/FILE  Nation Media Group

By George Omondi

In Summary

• Sharing of the amount among the 47 counties has left nearly all the governors with gaping budget holes that can only be filled through two equally unpopular choices of suspending some of the election promises or raising the cost of services.

Parliament’s decision to cap the county governments’ share of the national revenue at Sh210 billion has left governors with a tough budget balancing assignment and the risk of tarnishing their political fortunes.

Sharing of the amount among the 47 counties has left nearly all the governors with gaping budget holes that can only be filled through two equally unpopular choices of suspending some of the election promises or raising the cost of services.

Top on the list of those with the toughest assignment are governors Evans Kidero of Nairobi, Hassan Joho of Mombasa, Jack Ranguma of Kisumu and Kinuthia Mbugua of Nakuru who inherited huge debts from the defunct local authorities, but prepared ambitious budget estimates pegged mainly on direct financing from the national government.

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“This is an issue that governors can discuss only after sitting down with their cabinets, but from the figures we have we will only pay salaries and other recurrent expenses as we wait for the next budget,” said Council of Governors chairman Isaac Rutto.

Nairobi County, which runs Kenya’s administrative and investment capital but has the capacity to finance less than half of its 31.5 billion budget from local resources, faces the biggest budget assignment.

The county received only Sh9.9 billion - 58 per cent of the Sh16.9 billion that Dr Kidero had factored in its budget.

READ: Kidero hints at job cuts, higher fees in county revenue plan

The direct financing together with internally generated revenue are hardly enough to pay for the Sh5.7 billion debt inherited from defunct City Council of Nairobi and another Sh9.6 billion (Sh800 million per month) in workers’ salaries.

The county’s secretary, Lillian Ndegwa, Thursday led top officials in setting priorities for the first 100 days in office with the treasurer only committing to raise additional Sh5 billion over the period.

The officials also pledged to cut traffic snarl ups in Nairobi by 50 per cent and raise collection of garbage by 270 tonnes a day over the period.

The officials, however, declined to discuss the possibility of adjusting rates and single business permits, saying such decisions could only come from the cabinet.

Among Nairobi’s priority projects that are likely to face a cash crunch are the Sh1.8 billion Pumwani Hospital rehabilitation programme, Sh3.1 billion road maintenance programme and Sh724 million waste management plan.

In Mombasa, Governor Ali Hassan Joho faces a huge deficit of Sh21.4 billion and a Sh2.8 billion debt inherited from the former local authorities.

Mr Joho, who received only Sh5.82 billion from the central government, had prepared an ambitious Sh33.9 billion spending programme for the 2013/14 financial year, and is already nursing a Sh13 billion financing gap.