Since the onset of devolution in 2013, Kenya’s counties have struggled with financial instability, often teetering on the brink of shutdown due to delayed disbursements from the National Treasury. The persistent issue of erratic cash releases, combined with low revenue generation, widespread wastage, and graft, has left county governments in a perpetual financial crisis, crippling service delivery to millions of citizens.
Last week, the Council of Governors (CoG) issued an ultimatum to the National Treasury, threatening to halt essential services if the prolonged delays in fund disbursements were not addressed. “We demand the National Treasury immediately releases the funds owed to counties, failing which, county governments will have no choice but to shut down operations completely,” CoG chairman Ahmed Abdullahi warned.
For three consecutive months, the 47 county governments have operated without the much-needed financial injections, causing disruptions in critical sectors such as healthcare, infrastructure development, and public administration. The delayed disbursements have brought local governments to their knees, with contractors, suppliers, and healthcare workers left unpaid, exacerbating the situation.
A Decade of Financial Woes
Devolution, a cornerstone of Kenya’s 2010 Constitution, was designed to bring governance closer to the people and enhance service delivery. Since the 2012/2013 fiscal year, the National Treasury has been tasked with releasing funds to counties, which are allocated based on an equitable revenue-sharing formula. However, the process has been anything but smooth.
The first decade of devolution has been marred by chronic delays in exchequer releases, often spanning months. County chiefs have consistently pointed fingers at the Treasury, accusing it of derailing operations and violating constitutional obligations. Such delays have sparked heated debates on the sustainability of devolution and the capacity of county governments to operate autonomously.
While the Treasury cites revenue collection challenges as a key reason for the delays, critics argue that financial mismanagement and corruption within county governments have also played a significant role. Billions of shillings meant for development projects have reportedly been lost to graft, further exacerbating the financial strain.
Impacts on Service Delivery
The financial constraints have had dire consequences on service delivery. Healthcare, one of the most devolved and critical sectors, has borne the brunt of the cash crunch. Hospitals across the country have reported severe shortages of essential drugs and medical supplies. Healthcare workers have gone unpaid for months, prompting strikes that disrupt services for vulnerable populations.
Other essential services, including road maintenance, waste management, and water provision, have also suffered due to stalled projects and resource shortages. These disruptions undermine the primary objective of devolution—to improve the quality of life for citizens by decentralizing services.
Calls for Urgent Action
The Council of Governors has called on the National Treasury to prioritize counties in its cash flow plans to avoid further disruptions. “The lack of funds is not just an operational issue; it’s a constitutional crisis,” Abdullahi said, emphasizing that the delays undermine the principles of devolution and good governance.
Governors have also urged Parliament to push for legislative reforms that would ensure timely disbursements and shield counties from the volatility of national revenue collection. Additionally, stakeholders are calling for enhanced accountability within county governments to address wastage and graft.
The Way Forward
As the financial standoff continues, experts are calling for a comprehensive review of Kenya’s fiscal policies to ensure the sustainability of devolution. Reforms in public financial management, increased local revenue generation, and strict anti-corruption measures are crucial to addressing the root causes of the counties’ financial woes.
Unless swift action is taken, the vision of devolution as a tool for development and equity risks being derailed, leaving counties stuck in a cycle of dependency and inefficiency. For millions of Kenyans relying on county governments for essential services, the time for solutions is now.
