Senators back writing off county debts

May 15, 2013 12:19 pm
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Twenty-seven Senators voted for the Motion filed by Siaya Senator James Orengo seeking to have the government shoulder the burden of debt incurred by the 175 obsolete local authorities, with five rejecting it/FILE
Twenty-seven Senators voted for the Motion filed by Siaya Senator James Orengo seeking to have the government shoulder the burden of debt incurred by the 175 obsolete local authorities, with five rejecting it/FILE
NAIROBI, Kenya, May 15 – The Senate on Wednesday approved a Motion seeking to compel the national government to write off debts held by defunct local authorities.

Twenty-seven Senators voted for the Motion filed by Siaya Senator James Orengo seeking to have the government shoulder the burden of debt incurred by the 175 obsolete local authorities, with five rejecting it.

The 175 local authorities became invalid after the March 4 elections. Some 33,000 workers were transferred alongside liabilities to the new county governments.

Those supporting the Motion argued that it would be impossible for the county governments to be fully operational and provide the necessary services if the debts were not written off.

Moving the Motion, Orengo said some counties alike Nairobi, Mombasa and Kisumu owed billions in loans and the work and performance of county governments could be undermined and frustrated by the debts.

“Recognizing that devolved system of government must be protected and defended in order to attain the underlying principles, objects and functions as set out in Articles 1, 6, 10, 174, 175 and 186, the Senate resolves that the National Government takes over the servicing and payment of all major debts and loans owed and incurred by all the local authorities or other such entities that existed before the establishment of County Governments,” the Motion stated.

Meru Senator Kiraitu Murungi who was for the Motion argued the devolved system of government were under serious threat since the county governments would lack sufficient resources after paying staff and offsetting their debts.

Murungi gave an example of Kenya Power and Lighting Company and Kenyan Airways which were bailed out before they were allowed to operate on the their own.

He said: “These companies would have collapsed had the government not sorted out their loans and this is likely to happen to the devolved governments if they are left to tackle the loans. Let government help them.”

Those against the Motion said the total loans incurred by the local authorities should be audited first before the Motion is passed by the House.

An amendment to Orengo’s Motion by Kisumu Senator Anyang’ Nyong’o seeking to have the debts audited first before being taken over by the government failed to pass before the House.

“We cannot just ask the government to pay loans without knowing how much they are paying. If we approve we will have county governments inflating their loans and individuals coming out to say they have not been paid for services rendered to the local authorities,” Mandera Senator Billow Kerrow said.

According to House Speaker Ekwe Ethuro, the debt portfolio has not been ascertained since the Transition Authority is currently compiling a list of assets and liabilities that will be transferred to counties or retained at the national government.

Most of the former local authorities had debts that exceeded their assets and were depending on the Local Authorities Transfer Fund (LATF) from the central government to pay staff and offer services.

Former Prime Minister Raila Odinga also recently called on the national government to write off debts of the defunct authorities throughout the country so that county governments are not crippled by such liabilities.

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