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Alarm as County debts hit KES 2.02 billion

15 October 2015, 12:11 Dareel Eric

Vihiga - Stakeholders in Vihiga County have raised alarm over KES 2.02 billion pending bills accrued during the just ended financial year.

Contractors, businesspersons and general public want Governor Moses Akaranga to crack the whip and explain how the County has ended up in debts yet there is no flagship project to contend with.

Musalia Mudavadi's Amani National Congress party said it was concerned the debts may derail the process of devolution.

"There is so much corruption at the County and that is how we end up having debts of KES 2.02 billion in one financial year alone. This is despite the fact that counties that are larger have lesser debts," said Godfrey Osotsi, ANC national secretary general.

He added, "If Kisumu has debts of KES 2.53 billion and Bungoma KES 2.5, how comes Vihiga, which is smaller than all these counties has debts of KES 2.02?"

Read Also: House suspends session to discuss MCAs' loyalty to Governor

Osotsi addressed the media at Sosa Cottages in Vihiga County in the company of other ANC officials Beatrice Adagala, Jackline Mwenesi, Mwendwa Aligula, among others.

"As a party that will field a Presidential candidate from this County and who is a champion of devolution, it saddens us that devolution may likely fail at his doorstep. We have the right to question the County leadership on where they have gone wrong," said Osotsi.

The party warned that the huge debt may hinder implementation of devolution in the County, and called for sacking of officers responsible.

"All projects that were being worked on by contractors had been budgeted for. How come then that the County accrued extra costs on contractors, suppliers and hoteliers?" posed Aligula.

The group said the Governor's strategy of only reshuffling officers in his cabinet and not sacking anyone responsible for theft in the County was opening up avenues for more debts.  

Controller of Budget Agnes Odhiambo released a report indicating that Vihiga was ranked third after Kisumu and Bungoma for owing banks, suppliers and contractors billions of shillings.

Hoteliers in the County have since locked doors on County officials from holding meetings in their premises, with one influential businessperson having caused a storm at the County headquarters while threatening to strip naked to be paid millions of shillings owed.

The County's total budget is KES 4.5 billion for the financial year 2015/2016, whereas Commission for Revenue Allocation has set KES 3.8 billion for the County.

The County can only raise up to KES 200 million in revenue, with the Auditor General's report for 2013/2014 having indicated that the County only collected KES 80 million a drop from the previous KES 200-300 million collected by former County council.

Last month, contractors met Governor Akaranga and bemoaned that their operations have been grounded for almost a year over non-payment.

Akaranga promised to pay them in a week's time, but they have since not been paid.

In August, the County assembly approved the County government's proposal to borrow a bank overdraft of KES 200 million from the Kenya Commercial Bank (KCB) to pay its workers who were threatening to go on strike.

The approval of the loan facility was meant to salvage grounded County operations and enable the County's administration pay a total of KES 100 million salaries.

Debate on the proposal was marred with chaotic scenes from the two factions that pulled in different directions on the floor of the House; one supporting and the other opposing.

According to the indicative term sheet from KCB Mbale branch, the loan would be repaid in a year at an interest rate of 16 per cent, and further attract an appraisal fee of 0.5 percent of approved amount.

After the first loan, the County can however renew the overdraft facility after every six months without attracting appraisal fees.

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