•The Commission on Tuesday recommended that the counties be allocated Sh370 billion as equitable share, up from Sh316.5 billion in the current financial year
•In its recommendations on the basis for equitable sharing of revenue between national and county governments, CRA suggest that the national government should receive the huge chunk of the national cake – Sh1.44 trillion.
The Commission on Revenue Allocation has endorsed President Uhuru Kenyatta’s pledge to allocate county governments an additional Sh53.5 billion in 2021-22 financial year.
The Commission on Tuesday recommended that the counties be allocated Sh370 billion as equitable share, up from Sh316.5 billion in the current financial year
In its recommendations on the basis for equitable sharing of revenue between national and county governments, CRA suggests that the national government should receive the huge chunk of the national cake – Sh1.44 trillion.
The allocation is out of the projected shareable revenue of Sh1.81 trillion and projected Road Maintenance Levy Fund of Sh65.13 billion.
Articles 216(1) (a) and 203 (1) of the Constitution mandates the commission to recommend to Parliament the vertical (between National and County governments) and horizontal (among counties) sharing of revenues generated nationally.
In September, the President pledged the additional allocation, ending months of standoff in the senate over the third generation formula.
Uhuru said the additional allocation will go towards strengthening devolution. However, his pledge was pegged on the performance of revenue collection by the Kenya Revenue Authority.
The National Treasury has admitted experiencing cash flow challenges owing to the Covid 19 pandemic that has hit revenue collection.
In a statement, the commission its consulted Parliament, the Council of Governors and the National Treasury.
According to the recommendations, the allocation of Sh370 billion to county governments constitutes a baseline equitable share allocation of Sh316.5 billion, which is the baseline and unconditional allocation of Sh17.02 billion to be shared by all counties.
“These allocations were previously allocated as conditional grants for health, roads and education,” reads the statement in part.
In addition, some Sh36.48 billion will be transferred from Ministries, Departments and Agencies to the devolved units for performance of concurrent functions in the areas of health, crop development, livestock, fisheries, water, irrigation and sanitation.
“Further, in accordance with the provision of the PFMA 2012 Section 190(b), the Commission presents the determination of each county's equitable share based on the Third Basis for revenue sharing approved by Parliament in September 2020,” it added.
The contentious third basis for sharing revenue among the counties had last year split the senators down the middle, with those whose counties were set to ‘lose’ revenue in the proposed formula, vehemently rejecting it.
Some counties that were to lose billions of shillings in revenue formula backed by Senate committee on Budget and finance include those from the Northern Frontier region, Coast and Ukambani.
The protracted standoff characterized by 10 adjournments, aborted Kamukunjis, arrests, intimidation, bribery claims and blackmail.
However, it is the Sh53 billion pledge by the President that induced a section of aggrieved senators to debate and vote on the formula to unlock the release of cash to counties.
The new formula factors eight parameters; basic share (20 per cent) population (18 per cent) health (17 per cent), agriculture (10 per cent), poverty level (14 per cent) and urban (five per cent), with roads and land at eight per cent each.
Nairobi, Nakuru, Kiambu and Turkana are the top gainers in the new formula.
Nairobi County will get an additional Sh3.3 billion from the exchequer, to push its total allocation to Sh19.2 billion from the current Sh15.9 billion.
Nakuru’s share will balloon to Sh13 billion up from the current Sh10.4 billion while Kiambu will get an additional Sh2.2 billion to push its total allocation to Sh11.7 billion, while Turkana’s allocation will shoot to Sh12.6 billion from Sh10.5 billion.
Tharaka Nithi, Nyamira, Vihiga, Isiolo and Kwale will get least addition to their current allocations in the new formula that ensures no county loses revenue.
Tharaka Nithi will get additional Sh289.6 million to push its total allocation to Sh4.2 billion from the current Sh3.9 billion.
Nyamira will receive Sh324.5 million more, Vihiga will get an additional Sh414.8 million, Isiolo will get Sh469.2 million more while Kwale will receive an additional Sh479.6 million to push its total allocation to Sh8.2 billion from Sh7.7 billion.
Kirinyaga Senator Charles Kibiru, who chairs the House committee on Budget and Finance termed the new proposals by CRA as an improvement from the last allocation.
“Once the allocation is unconditional, it becomes part of the equitable share. So, the commission has considered the President’s Sh50 billion and we are happy,” Kibiru told the Star on phone.