Nairobi County Assembly has set aside Sh246 million in its supplementary budget to cater for car grants for its members, becoming the first assembly to implement the BBI carrot dangled by President Uhuru Kenyatta.
The development will enable car loans be advanced to the 122 MCAs at the city assembly converted into car grants.
Interestingly, the supplementary budget was tabled on the same day the assembly was set to debate the Building Bridges Initiative (BBI) Constitutional Amendment Bill, 2020, which was unanimously approved by the House with 114 members voting in support of the bill.
Assembly Clerk Edward Gichana said the move follows the presidential pronouncement on the issuing of Sh2 million car grant to MCAs and speakers of county assemblies.
Thereafter, the Salaries and Remuneration Commission (SRC), through a circular dated February 9, 2021, provided guidelines on the implementation of the conversion of car loan grant.
“In honour of this directive among other financial obligations this supplementary will focus to address the following… additional of Sh246 million for transfer of funds to the County Assembly Fund account to cater for car grant,” said Gichana.
In late January, in a meeting with MCAs from the Mount Kenya region to drum up support for BBI bill, President Kenyatta pledged to help MCAs achieve their demands for a Sh2 million car grant each.
Early last month, SRC gave thumbs up of approval for Sh4.5 billion car grants for MCAs and their Speakers, paving the way for its implementation.
The Commission’s Chairperson Lyn Mengich said they had reviewed and directed the conversion of the car loan benefit to a transport facilitation benefit in form of a grant for the MCAs.
Mengich further directed county governments to administratively undertake the conversion of the car loans to a transport facilitation benefit in the form of a car grant for Speakers and MCAs.
The SRC said conversion of the car loan facility to a car grant will be undertaken within the available car loan facility funds of Sh4.5 billion and will not affect the counties’ expenditure ceiling.
According to the SRC, MCAs are entitled to car loans of up to Sh2 million payable at three per cent interest within their term in office.
“Upon conversion, the existing car loan shall cease and the speakers and Members of the County Assembly who have already benefited from the existing car loan shall convert their car loan to transport facilitation benefit in form of a car grant,” read in part the letter.
But after the approval, Kenya Revenue Authority (KRA) said they are looking into getting a pie of the cake advanced to the MCAs.
KRA Commissioner General James Mburu said the taxman is looking into the car grant with a view to taking 30 percent from the grant, a move that if effected, will leave the beneficiaries with only Sh1.4 million from the initial Sh2 million.
The move by the county assembly will have its budget for the financial year ending June 30, 2021 revised upwards to Sh2.3 billion from the initial Sh2 billion.
The county assembly’s budget was approved at Sh2 billion with recurrent expenditure being Sh1.41 billion and Sh600.7 million for development.
The recurrent expenditure will now stand at Sh1.7 billion from the Sh1.41 billion previously budgeted for.
However, the supplementary budget estimates have seen reallocation of Sh8 million towards payment of salaries for members of staff under leadership offices following their retention by the County Assembly Service Board.
Another Sh19.7 million to cater for committees’ quarterly progress retreats and workshops and Sh17 million to meet legislative activities such as CASA tournament.
There is also the reallocation of Sh18 million towards general administration and support services in facilitating fulfillment of committees and legislative agenda of the assembly as well as Sh9 million for training and development under committees and office of the clerk.
The assembly also set aside Sh171 million as payment of pending bills as a result of suspended payments by the Central Bank during the 2019/2020 financial year
“There is a need to cater for various payments including MCAs and staff car loan and mortgage repayments of Sh26 million that form part of the suspended payments,” said Gichana.