How the new equalisation policy will push the poor deeper into poverty

Angeline Shikokoti a widow at her house at Virhembe village in Shinyalu on April 3, 2018. She been bogged down by poverty. [File, Standard]

Two weeks ago, the Commission on Revenue Allocation (CRA) launched its new policy and criteria for sharing revenue among marginalised counties. The Equalisation Fund is a creation of the Constitution under Article 204. Money in the Equalisation Fund is public finance set aside to accelerate the level of services in marginalised areas to bring them up to par with the rest of the country. In truth, these people don’t just feel left behind. They are behind in many ways. From social development to infrastructure and the fund as its name suggests, would have equalised the region. Alas, that is at risk now.

Oddly, this fund has never taken off as anticipated despite allocations by the CRA. It was only in 2016 when President Uhuru Kenyatta announced that funds will be ready for disbursement but as of May this year, only slightly over Sh1 billion of the Sh14 billion accumulated over five years had been disbursed for various development projects across the 14 target counties.

Being a product of the Constitution, the fund had been a matter of intense debate during the constitution making process. A group of members of MPs from the mainly arid parts of Kenya tabled the need for anchoring the Equalisation Fund in the Constitution. The initial idea was the fund should make up at least 5 per cent of the national budget.

African Socialism

However, after long negotiations, the bargain realised 0.5 per cent of the audited account of the collected revenue. The bottom-line is the Equalisation Fund came as result of intensive lobby by members of parliament from counties which were historically underserved.

The fund basically was meant to give a redress on the negative consequences of the Sessional Paper no. 10, entitled African Socialism and its application to planning in Kenya. In this policy paper, the mostly Northern Arid Districts then were considered less potential and hence very little investment from the Kenya Government in terms of infrastructure and development of human capital. This deliberate policy of marginalisation led to exclusion of the Northern Kenya people from benefiting from Government development projects.

The fund was therefore intended for large scale projects that were expected to bring the arid lands at par with the so called ‘potential areas’ of the previously white highlands during the colonial days. This revenue is meant to be distributed among Counties that have sizeable areas that are classified as marginalised. Therefore the redefinition of the word marginalisation to imply poverty by scores of people makes the whole idea of equalization fund a mockery.

In the first place, the plan of the second CRA policy to distribute the funds among close to 1,400 locations and over a hundred constituencies makes the administration and the management of the funds complicated and in the end it would have been better to disburse the funds directly to the counties and make it part of the devolved funds.  What made the fund unique initially was the relatively limited number of counties that were beneficiaries of the fund.

Small amounts

The substance and intention of creating the fund was for the purpose of undertaking larger infrastructural projects to equalise the less developed areas. The second criteria seems to be targeting poverty as per the data used to justify the revision of the policy.

Fighting poverty is of course a noble idea but in this policy it misses the point; targeting pockets of people with small amounts that might not have much impact as far their development is concerned and has no meaning at all for overall equalization and levelling purpose. What is more worrying is the tone of the elected leaders who have lobbied for the change of this policy.

Reading through the Hansard of the National Assembly on matters of the Equalisation Fund, I recently came across the sentiments of an MP, from a county perceived to be a high potential area, on what the devolved funds had achieved for northern Kenya. According to him, poor counties in northern Kenya do not deserve any additional funding since they cannot justify the funds allocated through the shared revenue. Such words coming from leaders who should know better make those who come from the region very worried.

The policy change at CRA might just be a beginning, we could be heading for a much more serious effort by the national government to push the people of northern Kenya further into poverty.

Mr Guleid is a governance consultant and the chairman, FCDC Secretariat; [email protected]