Debt crisis hits counties as Treasury delays funds
Governor Wycliffe Wangamati has blamed the National Treasury for accumulating debt and stalled projects in the county.
Mr Wangamati said the county owed contractors up to Sh1.5 billion because Treasury was yet to release funds budgeted for development, leading to a cash crisis.
Treasury proposes laying off staff at broke varsities
Speaking in Busia during a meeting with his executive staff and members of the county assembly yesterday, Wangamati admitted that a number of projects had stalled for lack of funds.
“We do not have money to pay the contractors and complete the projects they started,” he said.
According to the governor, the last time the county received cash was in November 2017.
He said following the delay, the amount of debt owed by the county government was piling.
Avoid fake news! Subscribe to the Standard SMS service and receive factual, verified breaking news as it happens. Text the word ‘NEWS’ to 22840
“Even if we get money, we are likely to use it to pay the outstanding debts so that stalled projects can be completed,” the governor said.
He said donor communities were avoiding sponsoring projects in the counties due to the huge amounts of money owed to contractors.
“Conditions are very strict – that our books should be clean – but here, we have huge debts,” he said.
The governor said the newly-launched Lake Region Economic Bloc would benefit residents in the 14 counties in the region immensely.
New Bill gives MCAs control over billions
“We shall, beginning June, have our own regional bank and our people will be getting loans from there at a fair interest rate,” said Wangamati.
Meanwhile, Busia Governor Sospeter Ojaamong has assured residents that the county government will complete projects that have stalled once his administration receives money from the national government.
Most of the counties are yet to receive money from Treasury, two months to the next financial year.
Devolution Cabinet Secretary Eugene Wamalwa last week said he had raiseed the matter with his Treasury counterpart Henry Rotich, and that the cash would be released.