New money headache for Jubilee

President Uhuru Kenyatta and his deputy, William Ruto. The government Friday admitted to having difficulties releasing funds to departments and paying suppliers. . Photo/File 

By JOSHUA MASINDE 

In Summary

• By Thursday, a total of Sh78 billion remained undisbursed— drying up the government cash cycle. However, Mr Rotich said the amount had since been reduced to less than Sh40 billion by yesterday as the system picked up. 
• Many contractors in the road and energy sector are yet to be paid following the devolution of functions and funds intended to implement the projects of Rural Electrification Authority, Kenya Urban Roads Authority and Kenya Rural Roads Authority.

The government Friday admitted to having difficulties releasing funds to departments and paying suppliers.  

In an interview with the Saturday Nation, National Treasury Secretary Henry Rotich said the delays were due to technicalities surrounding restructuring of national government functions, and measures to bring county governments into the funds disbursement system.

In the new dispensation, for instance, the Sh210 billion allocated to counties in the budget has to be disbursed as a separate vote.

State House, in a statement, said the matter squarely lay with the Treasury.

“If you have talked to the Cabinet Secretary at the National Treasury, those are the President’s people. You should take what they have told you because they are the experts. They are in the know.”

Mr Rotich’ spoke amid speculation that the government was actually broke — the early pain of lofty campaign promises it is struggling to keep and a lukewarm relationship with donors.

“Get this from me: development partners… are cutting down on engagement with government because of impunity and corruption levels, which are forbidden by their own statutes back home,” said a civil society activist.

But Mr Rotich said “the issues have been technical, not cash flow problems”.

By Thursday, a total of Sh78 billion remained undisbursed— drying up the government cash cycle. However, Mr Rotich said the amount had since been reduced to less than Sh40 billion by yesterday as the system picked up. 

The hitch reportedly left over 450,000 civil servants, who are normally paid by 25th of every month, waiting for more than a week for their salaries.

Piecing the pieces together

“We still had the old payrolls of the 44 ministries in the former government and there were technicalities in trying to harmonise them in line with the new structure of 18 ministries,” Mr Rotich said.

The most affected ministries are Health, Agriculture, Livestock and Fisheries— whose functions have been devolved and funds allocated to the counties.

Request by counties for the national government to handle the payroll on their behalf complicated the process.

“The officials who were supposed to be paid under the county government structure now want to be paid by the national government. The county governments don’t have payrolls now and we are being hit left, right and centre by the people who wanted functions to be devolved.” Mr Rotich said. “We have, however, agreed with the county governments that all these issues should be streamlined and addressed in the next six months.”

The confusion has since seen doctors and nurses issue strike notices, saying they needed clarity on who between the national government and counties would pay their salaries. They have expressed preference for remaining as employees of the national government.

On Thursday, the ministries of Devolution and Planning, Health and the National Treasury sought to allay fears over the delayed salary disbursement, saying the on-going restructuring as stipulated in the Constitution was to blame.

“The National Treasury will immediately facilitate the disbursement of funds to ministries to cater to the July 2013 payroll following authorisation of the office of the Controller of Budget,” read the statement signed by Mr Rotich, Ms Anne Waiguru (Devolution) and Mr James Macharia (Health).