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Kwisha!! Govt Has Approved Borrowing By Counties.
The Government has for the first time approved borrowing by Counties, with Laikipia set to be the first beneficiary of the agreement.
Deputy President William Ruto says regulations on the PFM Act have been amended accordingly and there is now a legal framework for a Sub National Government entity to borrow.
Speaking during the 15th Ordinary Session of the Intergovernmental Budget and Economic Council (IBEC), Ruto said Laikipia has applied through the issuance of an infrastructure bond for over Ksh 1b for various interventions by the County Government.
“We have been working on a borrowing framework by Counties for last 3 years and Laikipia becomes the first County to meet the rigorous criteria set out to enable Counties to borrow,” Ruto said.
Kwisha!! Govt Has Approved Borrowing By Counties. Photo Courtesy
The Deputy President said the borrowing will be guaranteed by the National Government saying they will support Laikipia on the process to ensure the borrowing becomes a success
IBEC with the concurrence of the Council of Governors has also agreed that the shareable revenue due to counties will remain as the last financial years’ at Ksh 370b.
This after discussion and considering the COVID-19 situation, debt levels and that other alternative revenue collection measures are not tenable
Ruto said Treasury will make every effort to ensure the cash is paid to the Counties in full.
And on pending bills, the Council says there will be a meeting between the Controller of budget, Auditor General, Treasury as well representatives from Counties to agree on what constitutes pending bills and to come up with mechanisms on how they will be sorted once and for all.
Ruto said he will consult the Speakers of Parliament with a view to fast track the Own Source of Revenue bill and the conditional grant bill to provide a proper framework for Counties to seek their own sources of revenue.
Either the Council has urged relevant stakeholders to agree on the framework on sharing of royalties from natural resources between the National Government and the Counties to enable Treasury to release funds to deserving Counties.
Ruto said going forward all conditional grants to vocational training centers under County govts will be included as shareable revenue for Counties.
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