Cabinet okays Sh20 billion more for counties but governors unsure

NAIROBI: Cabinet has approved extra billions for county governments, from the current Sh228 billion to Sh248 billion, in what could be seen as bid to dissuade the governors’ from pushing for a referendum under the Pesa Mashinani (Cash for the Grassroots) initiative.

The Division of Revenue Bill and County AllocationBillforthe2015-2016financialyear,approved by the Cabinet Thursday for tabling in Parliament, showed there will be an increase inallocations by Sh20 billion.

The national and county governments have been at loggerheads over sharing of the national cake, which gave rise to the Pesa Mashinani crusade. Besides the allocations, counties will also get conditional grants amounting to Sh4.6 billion towards support for maternal health care in the next Financial Year.

They will further get Sh4.5 billion for leasing of medical equipment, another Sh4.5 billion to support Level Five hospitals and Sh3.3 billion for road maintenance.

The Council of Governors (COG), after learning of the Government’s plans was quick to express reservations in the new figures. “These are new figures we are hearing of. Negotiations are still ongoing to try to harmonise figures proposed by the council, the National Treasury and Commission of Revenue Allocation,” said Ahmed Abdulahi Mohammed, COG’s Finance Committee chairman.

He pointed out that the council had proposed Sh350 billion being the 45 per cent of the 2012/2013 national revenue while CRA proposed Sh282 billion and National Treasury Sh253 billion.

He added that they were scheduled to discuss the proposal today during their pre-inter-governmental Budget and Economic Council preparatory meeting. The main meeting has been proposed for Tuesday next week.

“Two days ago, at our meeting held at Safari Park, we discussed the CRA and National Treasury’s proposal. We hope to reach a middle-ground, applicable to all,” he added.

Mohammed explained their proposal was for the equitable share, which goes to the counties without any pre-condition.

County governments received Sh210 billion for the 2013/2014 Financial Year and Sh228 billion for the 2014/2015 Financial Year.

However, governors wanted Sh279 billion in the last Financial Year. National Treasury had proposed Sh239 billion for the same period. National Assembly’s Budget committee had proposed Sh217 billion, also for the same period.

Thursday, Mohammed argued it will be up to the Senate and the National Assembly to ensure counties get adequate funds to finance their activities in the regions.

“This is just the initial stage. We hope, with adequate consultation, we will reach a consensus on the right figure for the counties,” he added.

He further pointed out that there is no contention when it comes to conditional allocation noting that National Treasury has proposed Sh21 billion.

The 2015/2016 planned allocation was approved by the Cabinet during Thursday’s Cabinet meeting chaired by President Uhuru Kenyatta at State House in Nairobi.The meeting resolved to create an advisory board to advice on how the Equilisation Fund will be allocated.

Equalisation Fund was established for purpose of providing basic services such as water, roads, health facilities and electricity to marginalised areas.

In the Financial Year 2015/2016 a total of Sh6 billion will be allocated to priority programmes across the country.

The Cabinet noted and appreciated the grant of a facility by the International Monetary Fund that will cushion the country from possible shocks arising from a sluggish economy.

INFLATION CONTAINED

The Cabinet further noted that inflation has remained within target at 5.5 per cent and is expected to drop to 5 per cent in the course of the year.

The meeting resolved that the focus of resource allocation will be infrastructure development, human capital development and education, environment and the youth and completion of ongoing projects and strategic interventions in national security and the environment.

The Cabinet directed that compensation for Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) project be financed by the end of this month so that the project commences thereafter.

Cabinet also approved the hosting of the 12th African Fine Coffee Conference and Exhibition in Kenya from February 12-15.

The theme of the Conference is “Sustainable Resurgence of the African Coffee Industry”. Cabinet also approved in July, 2015 the Global Entrepreneurship Conference.

The conference will be co-hosted by Kenya and USA, bringing together investors from the USA and across the globe.

The conference will therefore be a great opportunity for Kenya to showcase the various avenues, opportunities and possibilities available for investors in the country.