NAIROBI, Kenya, Feb 21 – County governments in dire need of quick funds but have nothing in their coffers will now be able to get ‘soft’ loans from The National Treasury.
This is according to The National Treasury Cabinet Secretary Henry Rotich who says his ministry and Central Bank of Kenya have established the mechanism to provide the funds to counties upfront.
“After discussion with the Central Bank of Kenya, we have found a mechanism to provide funds to counties upfront in the event there is an urgent need,” Rotich said.
Deputy President William Ruto says the move will enable counties get funds at cheaper rates, devoid of high interest rates and guarantees from local banks.
He was speaking during the Inter-Governmental Budget and Economic Council which he chaired at his Karen residence in Nairobi where the decision was ratified.
“The Central Bank of Kenya is comfortable with The National Treasury issuing the loans because The National Treasury can guarantee itself,” Ruto said.
CS Rotich also announced at the meeting that donors have given the national government Sh5.5 billion for health transformation, agriculture and county facilities.
Additionally, county roads fund will be increased from the current 15 per cent to 25 per cent, with funds collected from the fuel levy used to maintain county roads.
Rotich said The National Treasury would also disburse Sh1.4 Billion free maternity care funds to counties within a month. According to Rotich, the service will in due course be administered by the National Hospital Insurance Fund, which will have representation from county governments.
County representatives will also sit in the Kenya Medical Supplies Authority (KEMSA).
Others in attendance at the meeting were Kakamega Governor Wycliffe Oparanya, Busia Governor Sospeter Ojaamong, Taita Taveta Governor John Mruttu, Laikipia Governor Joshua Irungu, Health Cabinet Secretary Cleopa Mailu and Controller of Budget Agnes Odhiambo.
The Deputy President also stated that the government is working with county governments to resolve the issue of pension for county workers.