County Governments are set to lose Sh20 billion in their equitable share of revenue this financial year if a proposal by President William Ruto is adopted by the Senate.
This follows a decision by President Ruto not to assent to the County Allocation of Revenue Bill, (CARA) 2024 and instead opting to return it to the Senate for reconsideration.
In the Presidential Memorandum, communicated to the House last Thursday, the President wants the Senate to amend the Bill and reduce the shareable revenue due to counties in the financial year 2024/2025 from Sh400.1 billion to Sh380 billion.
The new figure proposed by the President in what he terms austerity measures to manage the current crisis in the country is Sh5 billion less than the Sh385 billion that the county governments received in the last financial year, 2023/24.
“In exercise of the powers conferred on me by Article 115(1) (b) of the Constitution, I decline to assent to the County Allocation of Revenue Bill, 2024 and refer the Bill for reconsideration by the Senate, I recommend the Bill be amended by deleting the First Schedule and replacing it with a Schedule that is attached to the Memorandum,” reads the Presidential memorandum.
In the Bill passed by the House, the 47 county governments were to share Sh400.117 billion for the financial year 2024/25 in equitable share revenue as provided for in the Division of Revenue Act, 2024 with the memorandum sent back to the Senate showing the disbursement schedules for each County.
The Bill was presented for Presidential Assent on June 28, 2024 but Ruto declined citing the failure to enact the Finance Bill, 2024 which has necessitated the re-organisation and rationalisation of Government's financial obligation for the financial year 2024/2025.
“The reduction in allocation has been compelled by the re-organisation and rationalisation of the Government's financial schedules for 2024/2025 financial year, with the failure to have the Finance Bill, 2024 enacted being the main reason,” reads the Presidential memorandum.
Several Senators have criticized the presidential memorandum, saying that they will not allow reduction of the allocation to counties which was aimed at ensuring that they meet their obligations of serving the people.
Senate Majority Whip Boni Khalwale wondered why the allocation to counties was being annulled yet they are constrained financially.
Dr Khalwale said most senators believe that the Sh400 billion allocation was sufficient enough to run the counties in the next one year
“Many senators strongly believe that the county shareable revenue should remain at Sh400 billion since this was a negotiated amount by the Mediation Committee of the Senate and National Assembly since most counties are facing financial challenges,” he said.
Nairobi Senator Edwin Sifuna said that the President has got no role in how counties share revenue and senators swore to uphold and defend the Constitution and will fight to ensure that counties get enough funds to ensure that devolution works.
“We have decided as senators that we are not to allow counties to lose even a single coin from the Sh400 billion that we passed as a Senate, we are going to challenge the recommendations of the Presidential memorandum on the floor of the House,” said Sifuna.
Kisii Senator Richard Onyonka who is also a member of the Senate Finance and Budget Committee that is processing the President’s memorandum said that they will leave it to the House to make the necessary resolution on the matter.
“We will be taking this matter to the Senate plenary, so that Kenyans can see for themselves which senators are championing the interests of devolution and which ones will be a rubberstamp for the Executive,” said Onyonka.
The Division of Revenue Bill 2024, is an annual law that provides for the equitable share of revenue raised nationally among the 47 counties which was passed by the Senate on June 11, 2024, with the concurrence of the National Assembly on June 25.
The presentation of the bill for Presidential Assent was heralded by the referral of the Finance Bill, 2024 on June 26, to the National Assembly for reconsideration with a recommendation to delete all clauses of the Bill.
The President has deleted the First Schedule of the Bill as approved by Parliament which contains allocations due to each of the 47 county government’s equitable share of revenue raised nationally.
If the Senate agrees with the President, then the overall equitable share will be reduced by Sh20 billion, which is likely to affect the operations of county governments in the 2024/25 financial year.
Article 115 provides that both Houses shall either, by a majority vote, amend the Bill in light of the President’s reservations or, by a vote supported by two-thirds of members of each House, pass the Bill a second time without amendment or with amendments that do not fully accommodate the President’s reservations.
However, a heated debate is expected on the presidential memorandum with senators questioning the rationale of the President’s refusal to sign the Bill when he has already assented to the Division of Revenue Bill, 2024, which is already a law.
Speaker Amason Kingi directed the Committee to table its report before the House on or before Thursday, July 18, 2024, with members expected to vote to approve or reject the President’s recommendation on the Bill.
The Senate also has the option of passing amendments that do not fully accommodate the President’s recommendation in the matter that is likely to raise political temperature.
