MPs reject Rotich proposal to reduce counties budget | The Star, Kenya Skip to main content
August 21, 2018

MPs reject Rotich proposal to reduce counties budget

Treasury CS Henry Rotich./HEZRON NJOROGE
Treasury CS Henry Rotich./HEZRON NJOROGE

The budget committee of the National Assembly wants county governments allocated Sh46 billion more than last year’s, sidestepping a proposal by Treasury to slash the money.

The committee chaired by Kikuyu MP Kimani Ichung’wa did not factor the adjustment request by the Treasury as CS Henry Rotich did not make a written and formal proposal to that effect.

This dispels fears that counties would have their national allocation trimmed by between Sh15 billion and Sh17 billion, a proposal that had sparked uproar by governors.

Read : 'Broke' Treasury plans to slash county budget by Sh15 billion

In the 2018/19 Division of Revenue Bill published by Ichung’wa the committee proposes that counties receive a total of Sh372.7 billion, inclusive of all the grants, up from a total of Sh326 allocated in 2017/18.

According to the committee, this allocation comprises of an equitable share of Sh314 billion and additional conditional allocations from amounting to Sh58.7 billion.

Last year, counties were allocated Sh302 billion and Sh24 billion in conditional grants, totalling to Sh326 billion.

Counties' equitable share of revenue for next financial starting in July is arrived at by growing their equitable share for 2017/18 of Sh302 billion by a growth factor of 4.0 per cent.

This yields an adjustment of Sh12 billion.

Last week Rotich told the senate that counties should start tightening their belts under the national government’s news austerity measures that would affect their budgets.

Rotich said the government was planning to cut down expenditure on non-priority areas that would slash counties allocations by at least Sh15 billion over Sh80 billion revenue shortfall.

In his presentation to the Senate Committee on Finance and Budget, Rotich blamed the drought for the shortfall in revenue collected by Kenya Revenue Authority.

Also read : We have run out of cash, Rotich admits

“We are looking at Supplementary II to cut expenditure at both levels of government, which must contribute to lowering of budget deficit so that we can match revenue with expenditure. We have discussed with governors to also institute austerity measures,” Rotich told the Committee.

However, his proposal has not been captured in the proposed sharing of revenue formula between the two levels of government.

The bill must be passed by both the Senate and the National Assembly before it is assenting to law by the president .

Senate, the Commission on Revenue Allocation and National Treasury last week differed sharply with each institution proposing its own figure, setting the stage for rigorous negotiations.

Senators are demanding the state to allocate counties Sh327.7 billion, the Commission on Revenue Allocation (CRA) proposes Sh337.2 billion contrary to National Treasury's Sh314 billion contained in the 2018-19 Budget Policy Statement (BPS).

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