Unequal revenue allocation dangerous for Kenya

In Summary

• There is a growing inequality and unfairness in the revenue allocation process.

The KRA headquarters at the Times Towers.
The KRA headquarters at the Times Towers.
Image: FILE

There was a time when resources from national government to an area were determined by whether the people there had voted in a politically correct way. Because the opposition was perceived to come from certain parts of the country, there are pockets of marginalisation all over the country.

There has been a massive improvement with this new constitution: now money for development is allocated on a formula; how you voted does not affect the allocation. There is much more fairness in Kenya today, and previously very marginalised communities, like those in northeastern, are being allowed to catch up. It is good because Kenya should not leave anyone behind.

There is however, a growing inequality and unfairness in the revenue allocation process. First, for the purposes of affirmative action, the interpretation of marginalisation concluded that counties were marginalised. It ignored that the Constitution, Article 201, which speaks of ‘expenditure shall promote the equitable development of the country, including by making special provision for marginalised groups and areas’. Areas not counties. There are areas all over the country that have been under-served and discriminated against.

The result is gross inequality. I will not mention county names so that my point is not lost in an ensuing back and forth driven by narrow and ethnicised interests. Please consider the figures for yourself objectively and ask yourself whether this was the intention of the constitution’s framers.

There are counties where per person, per year, the government remits close to Kshs 20,000. In terms of the per capita spend calculated from the total sent to the county. Meanwhile, other counties get under Kshs 4000 per person per year. There are about 10 counties in each category. Yet we know there are incredibly poor and under-serviced Kenyans in every county.  

The counties at the bottom, in relative terms, are also heavier taxpayers than those at the top, yet the constitution, again in Article 201, says that ‘the burden of taxation shall be shared fairly’. Article 201’s reason is that ‘the public finance system shall promote an equitable society’.

The Commission for Revenue Allocation has improved the formula but it is still unequal, and here we get to the heart of the matter: shall we be equal as citizens or not?

The Constitution uses the word equal or equally 45 times, while using equity or equitable 23 times. The word ‘fair’ or its derivatives is used 26 times. The words live in the same neighbourhood but they are very different. It is fairly clear that the constitution means that citizens should be equal, which means being the same in quantity, size, degree, or value, and also that those left behind should be given more so that they can catch up with the rest.

Equal is about a mathematically similar share, while equity is a judgement of fairness. However, the massive the gap between Kshs 20,000 and Kshs. 4,000 does not reflect the  balance intended by the constitution. For now, most Kenyans are not aware of this difference. As more in the lower allocation counties, which tend to be very populous, get conscious of it, they will feel that they are being marginalised and that Kenyan citizenship is unequal.

More dangerously for our democracy, they will conclude that the system is rigged against them and that only a winner-take-all system in which their population determines 100% of revenue share is the way to go. The Presidency will continue to be the prize Kenyans are willing to die and kill for.

Kenyans must beware how good values like fairness and equitable can be used to be unfair and inequitable. Equality is a much more reliable measure of the rights and obligations of citizenship. Yet we cannot forget the inequities that apply today and through history.

The solution is for the Commission on Revenue Allocation must revisit its formula and build more equality into it. This should be backed by Parliament in its budgeting and over-sighting the national government. Perhaps we can have 75% of all monies, at national and county levels, allocated EQUALLY, while the rest of the 25% is for those left behind. The 25% or 35% — as long as it is not the lion’s share — should be allocated in a measurable way to deserving wards and not counties so that we reach all Kenyans left behind.

If we want Kenya to be stable, the guiding Northstar should be to reach for equal citizenship and beware bureaucrats and politicians seeking to interpret what is fair; we have seen the kind of games they play.

Peter Wafula Murumba is the Managing Director of Impulso Kenya Limited [email protected]