KENYA: Governors set to lose control of Sh13bn health grants

January 2016 DailyNation; Governors are set to lose control of Sh13 billion health grants from the Treasury after Parliament approved their transfer to the National Health Insurance Fund (NHIF) and a yet to be established health fund.

The county bosses will lose Sh3.4 billion for free maternal healthcare to NHIF and the balance (Sh9.6 billion) to the health fund once a Bill seeking to anchor the establishment of the kitty is enacted into law.

The Budget and Appropriations Committee (BAC) secured the backing of MPs to ring-fence Sh4.5 billion conditional allocation for leasing of medical equipment, Sh4.2 billion for Level 5 hospitals and Sh900 million for compensation for user fees foregone  under the proposed health fund, clipping the hands of governors from accessing the money freely.

Parliament has allocated a total of Sh13 billion to counties as conditional grants for the health sector in 2017/18 budget.

BAC wants a county health fund Bill enacted to provide for the setting up of a health fund in each of the 47 county governments.

Currently, billions of health funds that are devolved  to the 47 counties are deposited in the County Revenue Fund, lumping it up with other resources including those generated locally by the units.

The MPs approved the creation of a health fund where conditional grants from the national government will be channelled directly to benefiting county health facilities.

“This (County Health Fund Bill) will improve the management of funds for health sector in counties by ensuring these funds are ring-fenced,” says the Budget committee report.

The committee, chaired by Mbeere South MP Mutava Musyimi reckoned that the management of health institutions in the counties has faced huge challenges of prompt financing.

Timely disbursements

“This is situation is attested to the fact that funds for the health sector are all paid into the County Revenue Fund and therefore not ring-fenced for the health institutions.

The committee said the ring-fencing of the funding for county health institutions will ensure timely disbursements.

“The fund should have specific accounts for each hospital to ensure that each receives a fair share of the reimbursement for the services rendered,” Mr Musyimi said.

MPs unanimously adopted recommendation of the BAC requiring that the conditional allocation for free maternity to county governments be channelled as a special grant to the NHIF.

The NHIF will then disburse the money to benefiting health institutions as reimbursement for user fees foregone.

The Budget committee said that in order to streamline the concept of reimbursement through the NHIF, free maternal healthcare allocation should be expunged from the County Allocation of Revenue Bill and the Division of Revenue Bill as a conditional grant and be disbursed as a special grant to NHIF towards free maternal healthcare.

“The committee therefore requests this House to adopt this report and resolves that the conditional allocation to County Governments meant for free maternal healthcare of Sh3.4 billion be allocated as a special grant to the National Hospital Insurance Fund to be disbursed as reimbursements,” Mutava Musyimi, who chairs BAC said in the report on the Budget Policy Statement (BPS) for 2017/18.

MPs adopted the report in record time and without much debate during a special session called to discuss the now contentious Election Laws (Amendment) Bill, 2015 on December 20.

MPs are expected to debate the County Allocation of Revenue Bill 2017 and the Division of Revenue Bill 2017 when Parliament reconvenes on January 24 and will be expected to adopt the BAC recommendations moving maternal healthcare funds to NHIF.

President Uhuru Kenyatta in 2013 announced provision of free maternity services leading to the waiver of user fees in all public health facilities in line with the Jubilee manifesto.


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