Counties are struggling to stay afloat as delays in Treasury disbursements, declining donor funds and a ballooning backlog of unpaid bills continue to disrupt essential services across the country, even as governors mark notable progress in key devolved sectors.

Delivering the Annual State of Devolution Address on Thursday, Council of Governors chairperson Ahmed Abdullahi said that while counties had recorded achievements in sectors such as health, agriculture, transport and water, the gains were being undermined by severe cash flow problems.

“Despite the strides made, service delivery was hindered by delays in exchequer releases and fluctuations in donor funding,” Abdullahi stated.

He revealed that counties had gone for months without receiving funds from the National Treasury, leaving them unable to sustain operations.

The total pending bills had climbed to Sh172.51 billion, with Nairobi alone accounting for Sh115.69 billion, nearly 70 per cent of the total owed by all 47 counties.

“The accumulation of pending bills is largely due to delays in disbursement of funds by the National Treasury,” he added.

Despite this, Abdullahi highlighted gains under devolved functions. In the health sector, 24.4 million Kenyans have been registered under the Social Health Insurance Authority, enabling access to free care at Primary Health Care facilities.

By the end of 2024, 9,365 public health facilities,  about 78 per cent, had been empanelled under the new scheme, an increase of 594 from the number enrolled under the previous National Health Insurance Fund.

Out of the Sh35.66 billion disbursed under SHA, public facilities received Sh12.7 billion, while private and faith-based providers received 48.8 per cent and 15.6 per cent respectively.

Under the Primary Health Care Fund, Sh5.9 billion has been paid out, with 54 per cent of the funds going to public health institutions.

However, some Primary Health Care centres are still waiting for payments despite submitting claims.

“Despite improved disbursement, some PHC facilities have yet to receive payments after submitting claims,” said Abdullahi.

He further disclosed that 1,544 licensed facilities are still without the tablets required to submit claims digitally, and urged the Ministry of Health to speed up their distribution.

The ministry has so far distributed 8,316 tablets to counties to support digitisation in health, including patient data and claims processing.

The Council of Governors is now requesting Sh7.8 billion annually from the Ministry of Health to absorb 8,287 Universal Health Coverage staff into county payrolls under guidelines approved by the Salaries and Remuneration Commission.

In agriculture, the sector recorded a 4.4 per cent growth in Gross Value Added, reaching Sh1.71 trillion. Although this was slower than the previous year’s 7.1 per cent, it still created more than 308,000 new jobs. Of these, 14.1 per cent were in the private sector, while 90 per cent were in the informal economy.

The governors have urged the national government to address funding challenges urgently to ensure that the progress made under devolution is not eroded.