Poor counties get raw deal in new CRA model

Counties in marginalised areas will see their share of funds allocated annually in the budget decline if new recommendations by the Commission on Revenue Allocation (CRA) are adopted.

This is despite the commission recommending an increase of the total funds to the 47 devolved units in the next financial year to Sh321 billion from Sh316 billion.

CRA has developed a new revenue sharing formula, which has reduced the weight previously placed on population and introduced other factors that determine how much a county should receive.

Population previously had a weight of 45 per cent, but this has come down to 18 per cent, while that of poverty has been reduced to 14 per cent from 18 per cent.

The new proposal on the latter index is partly to blame for the reduction in the allocation to the marginalised counties. In the third basis for revenue sharing, which is expected to be used in the 2020/21 financial year, CRA has considered such parameters as agriculture, health and urban areas.

The Urban Areas Index will see counties that host major cities share an additional Sh5 billion, which is expected to go toward sprucing up utilities and generally making the places more habitable for residents.

Among the counties that will lose substantial amounts of money are Mandera, whose allocation for the next financial year will reduce by Sh1.32 billion, Wajir (Sh1.3 billion), Kwale (Sh1.2 billion), Kilifi (Sh1.19 billion) and Marsabit (Sh1 billion).

This is in comparison to the money they were allocated in the current 2019/20 financial year.

The commission, however, noted that the recommended allocations might change as it incorporates the data from last year’s population census.

The proposed share of revenue to the counties was done using data from the 2009 census. Following the publication of last year’s population census, some counties have raised concerns about the number of people reported by the Kenya National Bureau of Statistics.