On Wednesday, Treasury Cabinet Secretary Njuguna Ndung'u was summoned before the Finance Parliamentary Committee to explain why the State had failed to release funds intended for the National Government Constituency Development Fund (NG-CDF).
Ndung'u stated that the government is committed to ending the standoff as soon as enough funds are available to distribute to the counties.
The Treasury Secretary also claimed that the government's coffers are running low on cash and that revenue collection still needs to assist the government in meeting its financial objectives.
"NG-CDF will be released as soon as government has enough funds, at the moment we are not getting taxes as required and the government is having challenges paying salaries, so please bear with us, we are working around the clock to make things work," Ndung'u told legislators.
"We are doing everything possible to ensure the disbursement of CDF funds no matter how little we can."
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The CS went on to say that the Kwanza administration in Kenya has faced unprecedented challenges, such as the global economic downturn, which has caused inflation in the country.
He said that the economic crisis had unavoidably pushed the country deeper into debt, forcing the government to take drastic structural measures to protect Kenya's ailing economy.
"The changing movement and international infrastructure has actually amplified our debt repayment and increased our debt by Ksh.145 billion which is close to 0.9% of our GDP and it was threatening to raise our deficit from 4.4% to 5.3% which was unacceptable," he said.
"In the end, we were only able to accommodate 0.3% to 4.7% but it means that we have to raise 0.6% which is about Ksh.90 billion."
To raise the Ksh.90 billion, CS Ndung'u proposed that the same amount cut government expenditure or that external resources be sought. "That is why our president is very busy contacting our friends."
Members of Parliament are outraged, claiming that NG-CDF funds have not been disbursed for the last six months while supporting its Executive programs.
The uproar prompted MPs to stage a walkout from plenary on Tuesday, demanding that the funds be released immediately.
Meanwhile, NG-CDF board CEO Yusuf Mbuno informed MPs that only Ksh. 10 billion of the intended Ksh. 44.2 billion had been disbursed.
This is also consistent with the Controller of Budget Margaret Nyakang'o's revelations about the government's financial irregularities.
Nyakang'o stated that she has seen a tripling of state officer salaries and increased travel budgets for government officials and their delegations totaling Ksh. 20 billion.
