Kenya's Senate has summoned Treasury Cabinet Secretary John Mbadi and Meru Governor Isaac Mutuma after the National Treasury halted fund transfers to the county. The measure, effective from April 10, enforces payment of a court-awarded debt to a foreign investor but sparks fears of salary delays and service disruptions. Lawmakers question the decision's proportionality.
The Senate Standing Committee on Finance and Budget has intervened after the National Treasury halted fund transfers to Meru County, voicing concerns over potential salary delays and disruptions to essential services such as healthcare and water provision.
Lawmakers warned that the freeze could trigger a liquidity crisis in the county. To probe the matter thoroughly, the committee summoned Treasury Cabinet Secretary John Mbadi, Governor Isaac Mutuma, the Controller of Budget, and the Auditor General.
“We must proceed by first inviting the National Treasury, the County Government of Meru, the Controller of Budget and the Auditor General,” said Ali Roba, the committee chairperson and Mandera Senator.
The Treasury withheld up to 50 per cent of Meru County's equitable share allocation, effective from April 10, invoking Article 225 of the Constitution over the county's persistent material breach in failing to settle a court-awarded debt to a foreign investor. The debt, originally Ksh339 million, has ballooned due to 14 per cent annual interest and now rivals the county's total pending bills.
Senators acknowledged the legal duty to honour debts but questioned the suspension's proportionality, with some calling it excessive. They raised alarms over the precedent it could set for Kenya's other 46 counties. The decision lapses on May 10 unless approved by both Houses of Parliament.
“If the decision is not approved within 30 days, it will be deemed never to have taken place, and any retained funds must be released immediately,” explained Mombasa Senator Mohamed Faki.
