•Setback for Senate as MPs reject attempt to increase revenue allocation to counties by Sh25 billion
•Contractual agreements will be affected if the lease of medical equipment funds is reduced to zero
Image: FILE
Senators yesterday suffered a setback after MPs rejected their bid to increase revenue allocation to counties by Sh25 billion.
Members of Parliament unanimously agreed to throw out the motion to amend the Division of Revenue Bill, 2019, to increase the revenue share from Sh310 billion to Sh335 billion.
Senators also sought to remove the Sh6.2 billion allocated for the lease of specialised medical equipment, eliciting a conversation on what happens to the contracts with the suppliers.
The rejection exposes the frosty relationship between the two Houses. The Bill will now be subjected to mediation.
Had it been approved, counties would have received Sh396 billion as the total share of the revenue from the initial Sh371 billion.
The amount includes conditional allocations by the national government (Sh14.16 billion), Road Maintenance Fund (Sh8.98 billion), and donor grants (Sh38.7 billion).
Budget and Appropriations Committee chairman Kimani Ichung’wa, whose team is responsible for the Bill in question, said the changes proposed by the Senate would alter the country’s fiscal framework.
The Kikuyu MP said the proposed allocation will have a huge impact on the fiscal deficit which stands at 6.8 per cent of the GDP.
Treasury intends to spend Sh2.7 trillion in the next financial year, an amount in which loan obligations are factored. This would have been adjusted if the addition county cash is considered.
“We understand that the Senate has the duty to protect the counties. But the interest of the counties should not override our national interest,” Ichung’wa said.
“Let us reject in totality all these amendments and that will give us a second opportunity to sit with our colleagues in the Senate to reason together and arrive at figures that will not distort the fiscal framework that we passed in the Budget Policy Statement, 2019,” he added.
Makali Mulu, a member of the Budget Committee, echoed Ichung’wa’s remarks, saying that much as counties need more money, the proposers should state where the money will come from.
“We fixed the percentage of the deficit to GDP ratio. The balance is not coming out in the Senate proposal,” the Kitui Central MP said.
He was concerned that contractual agreements with suppliers of special medical equipment will be affected if the money allocated to the vote is reduced to zero.
“We are likely to destabilise macroeconomic variables should we consider the amendment. This will destabilise the country’s economy,” Mulu said.
Speaker Justin Muturi was compelled to amend the question on the motion to include the phrase ‘considered and rejected’ as proposed by Suba South MP John Mbadi.
The Minority leader said the amendment removes ambiguity as the National Assembly’s intention is to reject the proposal.
Mbadi reminded members of a similar situation in 2013 when there was a split on whether the DoRB should be debated by the two Houses.
“Article 95 of the Constitution is clear that the National Assembly shall determine the share of revenue between the county and national governments. Article 96 has no provision stating the Senate shall determine the allocation of revenue, except among counties,” he explained.
“If the DRoB was to be worked on by the two Houses, the Constitution would have made it a special bill as the County Allocation of Revenue Bill,” Mbadi said, further warning that the ‘important’ Bill risks being lost.
Leader of Majority Aden Duale said the national budget is not formulated in a vacuum and is based on a framework that considers the economic environment and the policy agenda of the current administration.
“The budget must be framed and formulated within the Jubilee agenda. The budget committee has approved the budget policy statement which must be adhered to,” the Garissa Township MP said.
He criticised the Senate for removing the conditional allocation for leasing of medical equipment further without offering any alternative sources.
Duale was concerned by the increasing risk in counties in the face of the audit queries arising from the devolved units.
“I categorically reject the message from the Senate on the Division of Revenue Bill and send the Bill for mediation as spelt in Article 113 of the Constitution,” the lawmaker said.
Kiminini's Chris Wamalwa played the devil's advocate, saying it is not proper to deny counties money just because of the allegations of corruption.