Counties to get Sh1 billion less than proposed amount - IBEC

In Summary

• The Intergovernmental Budget and Economic Council - IBEC has come to an agreement that will see county governments get Sh316.5 billion less from 317.5 billion for the 20220/2021 financial year.

• The consensus at the IBEC level has now paved way for early approval in Parliament of Division of Revenue Act as well as the County Allocation of Revenue Act, thus enabling timely commencement of budget implementation activities at both levels of Government.

COG chairperson Wycliffe Oparanya, Deputy President William Ruto and Murang'a governor Mwangi wa Iria at DP's Karen home
COG chairperson Wycliffe Oparanya, Deputy President William Ruto and Murang'a governor Mwangi wa Iria at DP's Karen home
Image: DPPS

The Intergovernmental Budget and Economic Council (IBEC) has come to an agreement that will see county governments get Sh316.5 billion, rather than the proposed Sh317.5 billion, for the 20220-21 financial year.

In a meeting chaired by the Deputy President at his Karen office on Tuesday, IBEC said the amount is like what was allocated to the devolved functions last year.

This they said is occasioned by reduced collections by the National Treasury.

The consensus at the IBEC level has now paved way for early approval in Parliament of Division of Revenue Act as well as the County Allocation of Revenue Act, thus enabling timely commencement of budget implementation activities at both levels of government.

Speaking after the meeting Commission on Revenue Allocation (CRA) Chairperson Jane Kiringai said the National Government would retain a reduced figure of Sh1.54 Trillion.

“Based on the continued underperformance of ordinary (shareable) revenue, the budget committee of IBEC recommends that the allocations to each level of Government be maintained at the Financial Year 2019-20,” she said.

The CRA boss said the commission was well aware that the financial year 2020-21 division of revenue was being made in a constrained fiscal framework owing to the depressed revenue, high debt repayment and rising wage bill.

Kiringai noted that the commission was in agreement with the budget committee of IBEC that the shareable revenue to each level of government in the financial year 2020-21 be maintained at the financial year 2019-20 levels.

She called on both levels of government to exercise austerity to tame unnecessary expenditure.

On his part, DP Ruto asked counties to match their budget to the country's revenue to ensure that the country does not spend more that it can collect.

"We have lowered our revenue projections so that we try to live within our means. We have been projecting resources that we cannot collect," he said.

In a draft paper, IBEC had proposed that the counties get Sh317.5 billion which would be an increase of Sh1 billion compared to last years' allocation.

According to its supplementary estimates the IBEC had said the national government should get Sh1.864 trillion.

While the executive had been allocated Sh1.814 trillion, the judiciary would get Sh13.650 billion as parliament gets Sh36.222 billion.

The consolidated Fund Service would get Sh580.450 billion while the counties getting the Sh317.5 billion to make a grand total of Sh2.762 trillion for the 2020-21 financial year.

"The baseline estimates reflect the current ministerial spending levels in sector programmes. In the recurrent expenditure category, non-discretionary expenditures take the first charge. These include payment of public debts and interest therein, salaries for Constitutional office holder and pensions," Yattani had said in the estimates.

According to him, development expenditures had been shared out on the basis of the flagship projects in Vision 2030, the “Big Four” Plan and the MTP III priorities.

He said emphasis would be given to completion of on-going capital projects and in particular infrastructure projects with high impact on poverty reduction, equity and employment creation.

The CS said the government would finalise its medium-term budget after thorough scrutiny to curtail spending on non-productive areas and ensure resources are directed to priority programmes.

"Expenditure prioritization will be undertaken with a view to ensuring the provision of core services and minimising costs through the elimination of duplication and inefficiencies," he said.

Early in the year, the Commission on Revenue Allocation (CRA) had proposed that County Governments be allocated Sh321.74 billion for the 2020/21 financial year.

The Commission said it was working with National Treasury to forestall any stalemate, as it happened last year when parliament, National Treasury and the Senate, could not agree on amounts of money that should be allocated to County Governments.