10 DAYS TO GO

Crunch talks on county funds stalemate resumes

Senators and MPs in rush against time to agree on what allocation to be made to counties in the budget

In Summary

• The crucial talks are set to resume this week as the committee rushes against time to beat the June 14 deadline to save the counties.

• Senators want counties allocated Sh335 billion against Sh310 billion proposed by their counterparts in the National Assembly.

Finance Cabinet Secretary Henry Rotich presents the budget for the year 2018/19 financial year in Parliament on June 14, 2018.
Finance Cabinet Secretary Henry Rotich presents the budget for the year 2018/19 financial year in Parliament on June 14, 2018.
Image: Jack Owuor

The next 10 days will be crucial for counties as Senators and MPs resume crunch talks to decide the amount to be allocated to counties in the budget.

Members of the mediation committee appointed to unlock the impasse are still sharply divided over what the devolved units should get in the next financial year.

The crucial talks are set to resume on Wednesday as the committee rushes against time to beat the June 14 deadline to save the counties from running into financial problems that could disrupt their operations.

 

While senators maintain they will not accept an allocation of less than Sh327 billion, MPs want the counties given Sh316 billion.

The 10-member committee chaired by Kikuyu MP Kimani Ichung'wa was appointed by the speakers of the bicameral parliament after the houses clashed over the Division of Revenue Bill, 2019.

The bill stipulates the amount that should be allocated to counties. Its passage is, therefore, key to the devolved units as it will enable them to get funds from the National Treasury starting July 1.

Initially, Senators wanted the counties allocated Sh335 billion from the current Sh314 billion, but the proposal was rejected by the National Assembly.

The senators sided with the Council of Governors and the Commission on Revenue Allocation on the increased allocation while the MPs endorsed figures provided by the National Treasury.

 
 

The allocation proposed by the National Assembly is the same amount of Sh310 billion that was proposed by the National Treasury. The two say the government was facing cash flow challenges hence the need to slash the budget.

Yesterday, Senators Mutula Kilonzo Jnr (Makueni) and Ledama Ole Kina (Narok), who are members of the mediation committee, said they will not accept a figure below Sh327 billion.

 

Mutula said that their hard stance was informed by the four per cent inflation that was recorded in the last year. "If you factor that, with Sh314 billion as the baseline, we get a figure of Sh326.57 billion,” he said.

I will not accept anything less than Sh327 billion. If other members  agree, I will decent, but I can assure you the same will be rejected in the House.
Narok Senator Ledama Ole Kina

Should the mediation committee fail to agree on a figure within the set timelines, then the whole process of budget making will start a fresh, a situation that will cripple counties and disrupt operations.

Kilonzo said Senators have already scored a plus over their counterparts after they managed to convince them to accept Sh314 billion as the baselines and not Sh304 billion as they had earlier stated.

“The biggest issue we had with them was the reduction of the base allocation by Sh9 billion (from Sh314 billion to Sh304 billion). This was going to be the beginning of bad precedence. We have been able to persuade them that shareable revenue can’t be interfered with irrespective of the shortfalls at the national level,” he said.

He said that the stalemate is on the amount the counties should get on top of the Sh314 billion.

“The issue now is to what extent we should increase the allocation. We are basing it on the various arguments. The increase in allocation at the national level is at 13 per cent and inflation is at four per cent. Why should we not do the same for the counties and increase their allocation?” 

More: