NAIROBI, Kenya, May 12 — The Senate has adopted a resolution compelling the National Treasury to immediately lift the funding freeze imposed on Meru County over concerns linked to foreign debt obligations, arguing that the action was based on a flawed and unconstitutional process.
Senate Finance and Budget Committee Chairperson Ali Roba (Mandera) questioned the rationale behind the Treasury’s decision, asking: “What informed the Ministry’s decision to invoke Article 225 of the Constitution instead of Article 190, if that was the intended course of action?”
Roba also urged the Treasury to establish clearer guidelines on how liabilities arising from externally financed county projects should be managed.
The former Governor argued that withholding funds meant for devolved units undermines service delivery and unfairly punishes residents for disputes beyond their control.
Mombasa Senator Mohammed Faki, who seconded the motion, warned that the move set a dangerous precedent that could weaken devolution and expose counties to arbitrary financial sanctions.
“Any dispute involving debt obligations must follow due process and involve Parliament,” he said.
Faki further questioned the Treasury’s decision to pursue the extreme measure of stopping all transfers to the county instead of exploring intergovernmental intervention mechanisms under Article 190 of the Constitution.
The committee noted that county governments rely heavily on equitable share allocations from the national government to fund critical services such as healthcare, road maintenance, water supply, and payment of workers.
County officials have maintained that the funding freeze created uncertainty among contractors and employees while disrupting ongoing infrastructure and social programmes.
The committee-sponsored motion followed a meeting of the Senate Standing Committee on Finance and Budget convened on Thursday, May 7, 2026, to address delays in county funding and the controversial proposal to suspend transfers to Meru County.
The discussions later shifted to the National Treasury’s request to halt disbursements to the county under Article 225 of the Constitution, following an unpaid arbitral award involving a French investor and Rico Rock Limited.
In response, Treasury Cabinet Secretary John Mbadi revealed that prior intervention by President William Ruto had significantly altered the trajectory of the case. Mbadi explained that the President, in his capacity as Chairperson of the Summit, had committed the national government to settling the remaining principal debt of Sh130.9 million.
The dispute involves French investor Michel Dechauffour, who was evicted in 2018 from a tourism facility in Meru National Park operated through Leopard Rock Mico Limited.
In 2019, the High Court in Meru awarded the investor Sh339 million in compensation following arbitration proceedings. Interest on the amount has been accruing at 14 percent annually since March 2019.
According to Treasury documents, the debt has nearly doubled due to accumulated interest, with the county admitting that the amount had risen to about Sh600 million by February 2024.
Mbadi warned that continued delays in settling the award could strain Kenya’s diplomatic relations with France and place additional pressure on public finances.
The Treasury further indicated that the matter had evolved into a diplomatic concern after French President Emmanuel Macron reportedly raised it during talks with President William Ruto in Berlin.
Mbadi confirmed that he was awaiting formal communication from the Head of Public Service to notify the Controller of Budget and officially withdraw the request to stop the funds.
The Treasury disclosed that Meru County has so far paid Sh200 million through the investor’s lawyers, leaving an outstanding balance of approximately Sh442.9 million as of August 2025.
The county has indicated that it is unable to settle the remaining amount without support from the national government.
The Senate committee expects a formal resolution and communication to the Controller of Budget by next week, either enforcing or withdrawing the proposed fund stoppage.
