The transition to county governments will face major challenges, including a debt of Sh17 billion.
According to Local Authorities Administration Secretary Ambassador Philip Owade, the 175 local authorities are reeling under a debt of Sh17,281,183,162, which will complicate smooth transition.
“We will be transiting to county governments from the current dispensation. We are moving to 175 local authorities with functions, personnel, revenues, assets and debts,” he said.
Owade was addressing a mayors’ conference on how to manage transition into the new urban era following the legislation of the Urban Areas and Cities Act, Intergovernmental Relations Act and the Transition to Devolved Governments Act 2012.
KRA, NSSF, Saccos
Local authorities are also choked with salary arrears worth Sh1 billion among other statutory debts owed to National Hospital Insurance Fund, National Social Security Fund, Pensions Fund, Kenya Revenue Authority, Saccos and suppliers.
“Out of the 175 local authorities, only 44 of them can pay salaries from their own revenues,” stated Owade.
According to Owade, local authorities are also burdened with bank debts of close to Sh10 billion.
With the devolved government, substantial revenue generating services like mortuaries, markets and bus parks, schools and health facilities, solid waste management and housing will move to county governments.
He said revenue collected from these facilities between 2010 and 2011 amounted to Sh19 billion.
“The immediate consequence of repealing Cap 265 is that the jurisdiction under which these services are rendered will move to the county governments and the implications for this movement is vast and complex and entails taking over assets and debts,” he added.
While taking over assets is gratuitous, Owade regretted that debts are problematic particularly since they are substantial.
He said the main problem of local authorities, other than massive debt, is overemployment that ends up eating 70 per cent of revenue collected that goes to payment of salaries.
“The Nairobi City Council needs 7,716 workers compared to the current 11,392, most of who are semi-illiterate or semi-skilled,” he added.
He said with the transition, all local authority staff will be taken over by county governments though there is need to find alternative ways of paying workers.
By Lucianne Limo, The Standard