Governor Kang’ata seeks approval from assembly to borrow short term loans

Murang’a, Tuesday, April 18, 2023

K.N.A By Anita Omwenga

Murang’a Governor Dr. Irungu Kang’ata has written to the local county assembly seeking approval to borrow short-term loans from a financial institution. 

In a notification read by Murang’a Deputy Speaker Moses Gachui, the Governor is asking the assembly to permit the County Executive to borrow loans to address the issue of delay of disbursements of funds from the National Treasury.

On March 29, the Assembly received a request from the County Executive Committee Member in charge of Finance and Economic Planning requesting the Assembly to permit the County Executive to enter into an agreement with a financial institution, for the purposes of getting short term loans,” said Gachui.

Pursuant to provision of Public Finance Management Act, the assembly may authorize short-term borrowing by County government entities for cash management purposes only.

“As required by Section 107 and 142 of the Public Finance Management Act, the executive shall ensure that the short-term borrowing is restricted to the management of cash flows,” he said adding that such loans shall not exceed 5 percent of the most recent audited county government revenue,” said the deputy speaker.

Part of the notification read such loans shall be repaid within a year from the date on which it was borrowed and the interest rate charged on the amount borrowed shall not exceed 1.5 percent.

The matter is pending deliberation from the county assembly.

Courtesy K.N.A