DIVISION OF REVENUE BILL

Debt no reason to slash county funds during cash crunch

As the President has said, 'We're all 'groping in the dark' on implementing Constitution.

In Summary

•  Counties went for months without funds, with staff not being paid their July and August salaries. 

• MPs are engaging in political brinkmanship by bidding for the Executive, primarily due to the unconstitutional CDF that allocates at least Sh100 million per constituency as part of national government share.

 

The mediation between Kenya National Assembly and Senate on Division of Revenue Bill
The mediation between Kenya National Assembly and Senate on Division of Revenue Bill

The country has recently been treated to shenanigans surrounding the Division of Revenue Bill (2019), a new concept introduced by the 2010 Constitution to share funds between national and county governments.

Article 94 defines the role of Parliament, while Article 95 and 96 address the specific responsibilities of the National Assembly and the Senate. However, they must be read together with Articles 114 and 201.

While on a prima facie basis one can argue that it’s the primary responsibility of the National Assembly to determine how funds are shared between the two levels of government, the primary role of the Senate is to deal with matters concerning counties through adequate funding.

 

Article 203 stipulates that at least 15 per cent of ordinary shareable revenue be allocated to the counties out of the most recently approved audited accounts.

The power of the purse belongs to Parliament. However, Article 114 requires that there be concurrence with the Treasury CS during the budget-making process. The Commission on Revenue allocation provides formulae for revenue sharing. There is, however, a conceptual flaw in that the Public Financial Management law fails to separate the National Treasury from the Ministry of Finance. The National Treasury is an organ of both levels and not a preserve of the national government as is currently the case. Further, concurrence is not equal to having veto powers over Parliament.

Counties have gone for months without funds, with staff not being paid their July and August salaries. Hospitals faced closure due to lack of drugs and other essential supplies.

The conceptual problem on the devolution architecture is due to the fact that this has never been practised before within our jurisdiction. The reality is aptly captured by none other than President Uhuru Kenyatta himself, who has noted several times that “we are all groping in the dark” when it comes to implementing this Constitution.

There are a lot of hangovers from the old constitution. In addition, the Executive has been on a borrowing spree that has shrunk the fiscal space, increasing our nominal debt from Sh2 to over Sh5 trillion in five years.

This means the first charge of our taxes goes to debt servicing rather than to development. Reduced allocation to the counties is predicated on debt burden and wastage. However, the national government has the preserve of instituting revenue-raising measures and consequently, any shortfall is borne by it.

Concurrently, this principle carries the onus of fiduciary obligation and prudence to the national government. Debt mismanagement shouldn’t occasion a reduction in allocations to the counties when there is a cash crunch, more so without a corresponding reduction of national government budget.

 
 

Monies so far devolved are in excess of Sh1 trillion. Though some have been misappropriated, as in Kiambu and Samburu counties, the change brought about cannot be underestimated. There are roads in places such as Hola and Wajir, where none existed before.

It has also been documented that public officers and their accomplices had stashed over Sh14.8 trillion in offshore accounts, before devolution came into being. There is still a lot of wastage at the national government: What with NYS I and II, plus the Dams scandals?

MPs are engaging in political brinkmanship by bidding for the Executive, primarily due to the unconstitutional CDF that allocates at least Sh100 million per constituency as part of national government share.

In addition, the Executive is stuck up to a unicameral parliament, oblivious of the role of the Senate. Weak oversight coupled with the social welfare role of MCAs has left governors thinking that all the allocated billions belong to them, with some ‘developing’ faster than their own counties.

The rule of law has been replaced by the rule of the jungle as typified by the MPs engaging in shouting matches to occasion a stalemate for the Executive to ‘win’.

This is what also leads to MCAs getting physical with each other due to orders from the governors. A final figure of Sh316.5 billion has been agreed upon. However, the matter remains alive at the Supreme Court with the commencement date of the act altered to apply retroactively.

These are good grounds to demonstrate the travesty of the legislative process since laws don’t apply retroactively.

In conclusion, a seed must die for a tree to grow. The hangovers of the old constitution must die for devolution to grow.

Ultimately, our role is to serve Wanjiku and she knows what she wants. For those who have knowledge, have no power, and those who have power, have no knowledge. We must protect devolution at all costs.

The writer is Senator for Persons With Disabilities

@MwauraIsaac1

[email protected]