- In the current financial year, the counties were allocated Sh370 billion, an increase of Sh53.5 billion from the previous fiscal year.
- The increase was preceded by protracted infighting by the lawmakers over the third revenue sharing formula.
Image: COURTESY
Counties could laugh all the way to the bank for the second year running if Parliament approves a recommendation by a Senate panel to increase allocation by Sh125 billion.
The Senate budget committee has recommended to the House to increase the equitable share to Sh495 billion up from the current Sh370 billion.
The proposed allocation is 35 per cent of last audited accounts of the government.
In what could haunt the next government in the wake of dwindling revenues, the committee has pegged its proposal on the suggestion in the BBI bill that proposed to increase the allocation to 35 per cent.
“We are proposing that it be increased in line with the last audited account and the proposal in the BBI,” Makueni Senator Mutual Kilonzo Jr, a member of the committee, divulged.
The Constitution of Kenya (Amendment) Bill, 2020 developed through the Building Bridges Initiative process had proposed the allocation be increased to 35 per cent of the ordinary revenue.
The bid to amend the Constitution to effect the changes, however, was stopped by the courts. The case is pending hearing in the Supreme Court.
The panel chaired by Kirinyaga Senator Charles Kibiru ratified the recommendations on Tuesday, after a week of conducting public participation on the Budget Policy Statement for 2022-23 presented by National Treasury CS Ukur Yatani.
The report will be tabled in the House during a special sitting next week for consideration.
If the Senate and National Assembly approve the proposal by the panel chair, it will be the second year in a row that the devolved units will get a sharp increase in allocation.
In the current financial year, the counties were allocated Sh370 billion, an increase of Sh53.5 billion from the previous fiscal year.
The increase was preceded by protracted infighting by the lawmakers over the third revenue sharing formula.
Both the National Treasury and the Commission on Revenue Allocation have recommended retention of the allocation at Sh370 billion.
CS Yatani had argued that the proposal to retain the equitable share is informed by escalating expenditure pressure on fiscal framework and persistent under performance of revenue.
In its justification for the retention of the allocation, CRA argued that the projected slow recovery of economy coupled with the general election in 2022 are likely to negatively affect revenue performance in the next fiscal year.
“To contain the fiscal deficits within the recommended target, there is need for equitable shares to be retained at the financial year 2021-22 levels,” the commission stated.
However, the governors rejected the commission’s proposal and have been pushing for an additional allocation of Sh381.45 billion to push the total funding to Sh751.5 billion.
The governors said that CRA’s proposal does not reflect and is not commensurate to the growth in revenue for the financial year 2022.
“Following an in-depth discussion on the issue, we wish to reiterate that we reject in totality the proposal by CRA that recommends non-increment of the county equitable share,” Wambora said.
The county bosses also pegged their argument on the proposed constitutional amendment through the Building Bridges Initiative, which proposed allocation of 35 per cent of the ordinary revenue to the counties.
“We would like to reiterate proposals contained in the Bill which recommends that counties not be allocated less than 35 per cent of all the revenue collected by the national government,” CoG Finance committee chairman Ndiritu Muriithi said.
(Edited by Bilha Makokha)