Auditor General Nancy Gathungu has accused the National Treasury of breaching the Constitution by failing to disburse Sh46.5 billion meant for marginalised counties under the Equalisation Fund. Her latest audit report reveals that only Sh13.4 billion about 22 per cent of the Sh60 billion accrued since the fund’s inception has been disbursed in the last 13 years.
Established under Article 204 of the Constitution, the Equalisation Fund mandates that 0.5 per cent of national revenue be allocated annually to uplift 14 historically marginalised counties. These include Mandera, Turkana, Wajir, Garissa, Isiolo, Kilifi, Kwale, Lamu, Marsabit, Narok, Samburu, Taita Taveta, Tana River and West Pokot.
Gathungu’s audit reveals a consistent failure by the Treasury to meet its obligations. For instance, in 2012-13, only Sh529 million of the Sh2.6 billion allocation was released. In 2020-21, just a small fraction of the Sh6.7 billion entitlement was disbursed. By June 2024, Sh2.3 billion of the released funds remained unused in government coffers.
“The National Treasury is in clear breach of constitutional provisions,” Gathungu’s report states. “The accumulated shortfall of Sh46.5 billion represents a catastrophic failure in implementing a fund designed to address historical marginalisation.”
Governors from the affected counties have condemned the delays, describing them as economic sabotage. Marsabit Governor Mohamud Ali questioned how government could justify mothers giving birth in bush clinics and children walking long distances to school while billions meant for development projects sit idle.
The Council of Governors, through its Finance Committee chair Ferdinand Barasa, has rejected attempts to account for the arrears in annual Division of Revenue Acts. Barasa insisted that the backlog should instead be handled through a separate Equalisation Fund Appropriations Act to avoid double allocation and ensure transparency.
With the Fund’s constitutional lifespan ending in 2031-32, fears are growing that it may expire without achieving its intended impact. The Council of Governors warned that continued withholding of funds could invite litigation for constitutional violations.
