14 Kenyan counties joins hands to form regional bank worth USD28M amid cash crunch
The Bloc’s interim Head of Secretariat Abala Wanga says that each county will factor in a contribution of Sh200 million in their 2018/2019 financial year.
14 counties found in former Western and Nyanza regions are in the process of establishing a regional bank with each county agreeing to inject Sh200 million towards the formation of the bank.
The regional bank is a flagship project of the Lake Region Economic Bloc and will focus on the economic opportunities supporting sectors of the bloc’s other sectors including agriculture, tourism, health, education, infrastructure and the ICT Sector.
The Counties forming the Bloc includes Bomet, Bungoma, Busia, Homa Bay, Kakamega, Kericho, Kisii, Kisumu, Migori, Nandi, Nyamira, Siaya, Trans Nzoia and Vihiga.
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Already the Central Bank of Kenya (CBK) has opened an account for the initiative, according to the official.
“Through Controller of Budget a legal instrument was made and a special purpose account was opened at CBK and the money is deducted from the Counties and channeled to the account,” he said.
Initial capital will be in the custody of CBK until the bloc registers the new Bank.
Mr. Wanga said County Assemblies will play a crucial role and will be taken through the legal instruments establishing the Bloc.
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“This is to help them come up with a bill which will domesticate and ratify the legal instruments in their individual counties,” he said.
The announcement comes days after the national government said it was broke and facing difficulties in financing some of its development projects.
While appearing before the Senate committee on Finance and Budget Wednesday Treasury Cabinet Secretary Henry Rotich tabled a proposal to slash county funds by up to Sh17 billion ($170m).
He further added that by October this year, all the counties will have paid the required injection of the capital.
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Already some counties have made full payments while others have made partial payments for the establishment of the Bank.
“Kisumu has given already contributed Sh100 million. Kakamega is in the front line, they have given Sh200 million,” he said.
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