• The current formula uses population, land area and poverty indicators but the lawmakers want a new one put in place.
• Article 217 of the Constitution stipulates that the revenue-sharing formula be reviewed every five years
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The current formula for sharing revenues between the national and county governments is obsolete, senators have said.
The formula uses population, land area and poverty indicators but the lawmakers want a new one put in place.
Article 217 of the Constitution stipulates that the revenue-sharing formula be reviewed every five years. The last formula was reviewed five years ago.
The senators have criticised the Budget and Finance Committee for sitting on a formula proposed by the Commission on Revenue Allocation more than a year ago.
The proposed formula, which has adopted a sector-specific funding approach, was sent to the Mandera Senator Mohamed Mahamud-led committee to scrutinise and improve for adoption.
The lawmakers halted the process of approving the County Allocation of Revenue Bill, 2020 until a new method was tabled.
The County Allocation of Revenue Bill distributes cash allocated to the 47 counties among themselves.
“I want to ask that you (Speaker) rule on whether, despite the provisions of the Constitution and the fact that it is the same Committee that has sat on the formula for many months, we should proceed with this Bill,” Nairobi Senator Johnson Sakaja said.
The proposed formula weights the performance and pressure of the population on specific sectors, fiscal discipline and accountability and revenue performance.
For instance, the health sector has been assigned a weight of 15 per cent. The commission combined the uninsured, inpatient and outpatient parameters to come up with the index.
In the agriculture sector, it calculated the total number of rural households and their extension services and food security needs to determine the proposed 10 per cent weight.
Population has been weighted 18 from 45 in the current formula while poverty has a weight of 14 from the current 18.
Sakaja said that many counties including Nairobi, have been disadvantaged by the current approach.
“Even if they want to bring the same formula, let them do so and let us consider a formula for sharing revenue. There is no other more serious work that a Senator has apart from determining the manner in which our counties shall divide the money,” he said.
Narok Senator Ledama Ole Kina said his county was still being allocated funds based on the 2009 population census results. The latest headcount showed the population had grown by more than 200,000, he said.
“We cannot be setting the Constitution in abeyance. We need to sit down and discuss so that when we divide the money. It does not matter who gets what, but we are within the law,” he said.
Senators Kimani Wamatangi (Kiambu), Susan Kihika (Nakuru), Ochilo Ayacho (Migori) and Minority leader James Orengo (Siaya) joined in demanding for a new formula.
The demands forced the committee chairman to stop the Bill from proceeding to the second reading.
“On the question of the formula, I urge you to let us get the report because I understand that there is a report and even that report is not being made available to us,” Orengo said.
Mahamud denied they had finalised the report but did not want to release it. He said the committee was still grappling with the formula and had planned a retreat with CRA just before Covid-19 hit the country.
“I do not expect people to cast aspersions on our Committee that we are hiding something. We are not hiding anything. In fact, we wanted to have a two-day informal session to go through this together,” he said.
Governors from Northeastern region have opposed the proposed formula saying it will perpetuate the marginalisation of the ASAL areas.
(edited by o. owino)