Win for county governments as revenue grows to Sh400bn

National Assembly Budget and Appropriations Committee Chairman Ndindi Nyoro addressed the media at Hilton Garden Inn Hotel, Nairobi on November 14, 2023, after their sitting on the budget estimations. [Boniface Okendo, Standard]

Counties will in the Financial year 2024/2025 be smiling all the way to the bank after parliament reached a deal to allocate them the highest amount of shareable revenue since the advent of devolution.

The Senate and National Assembly on Monday reached an agreement on the division of revenue share where Counties will now be allocated Sh400.1 billion of shareable revenue in the financial year 2024/2025. This amount is Sh15 billion higher than the amount allocated in the current financial year where counties were allocated Sh385 billion.

This figure was arrived at following deliberation by members of a joint mediation team of the two houses after the Senate had been pushing for Sh415 billion for counties while the National Assembly wanted counties allocated Sh391 billion.

Members of the joint committee who met at Parliament buildings yesterday had at some point to take a break to consult following a heated exchange. Both Senators and MP seemed each to stick to their initial positions and after lengthy deliberations, the Senate agreed to climb down as the National Assembly adjusted its position upwards.

National Assembly Budget Committee Chairman Ndindi Nyoro who co-chaired the talks said the deal was a win for devolution since it was the first time that the two houses reached an agreement on the contentious issue. He asked governors to make good use of the funds allocated to their counties.

“The Senate has agreed to reduce their figure by Sh15 billion while the National Assembly has agreed to push up its earlier figure by Sh9 billion in the spirit of give and take so that we can resolve this matter and allow Counties to get their increased allocation from Sh385 billion in the last financial year,” said Nyoro.

The Senate Deputy Speaker Kathuri Murungi who co-chaired the talks with Nyoro said they were proud that counties had gotten a Sh15 billion increase compared to the last financial year when they got Sh385 billion while the Senate had wanted them to get Sh30 billion extra by getting Sh415 billion.

Murungi said that the two teams had held lengthy deliberations and they were all in agreement that devolution was working and that it should be supported by ensuring that counties get sufficient funds to carry out the devolved functions calling for the respective administrations to ensure prudent expenditure.

The Division of Revenue Allocation Bill was published and introduced in the National Assembly on March 12 this year after which it was considered and approved without amendments on March 20 with a proposal of Sh391 billion for counties with the bill referred to the Senate for concurrence which amended with a proposal of Sh415 billion for the shareable revenue.

Senate Speaker Amason Kingi and National Assembly Speaker Moses Wetangula appointed nine members each to join the parliamentary mediation with 18 members so as to resolve the crisis caused by the National Assembly rejecting amendments made by the Senate over the bill.

Senate Deputy Speaker Kathuri Murungi and Kiharu MP Ndindi Nyoro were elected as the co- chairmen for the mediation committee during the first meeting held in Parliament building and they are expected to steer the team to come up with a decision to be adopted by the two houses.

Wetangula appointed Kiharu MP Ndindi Nyoro, Teso South MP Mary Emase, Ugenya MP David Ochieng, Alego Usonga MP Samuel Atandi, Kapenguria MP Samuel Moroto,Kitutu Chache North MP Japheth Nyakundi,Samburu West MP Naisula Lesuuda, Kitui Central MP Makali Mulu, and Garsen MP Ali Wario to be members of this team.

Kingi appointed Senate Deputy Speaker Kathuri Murungi, Homa Bay Senator Moses Kajwang, Kakamega Senator Boni Khalwale, Nairobi Senator Edwin Sifuna, Isiolo Senator Fatuma Dullo, Uasin Gishu Senator Jackson Mandago, Machakos Senator Kavindu Muthama, Marsabit Senator Mohammed Chute and Migori Senator Eddy Oketch to be members of the committee.

The majority of Members of the National Assembly had argued when the bill was brought to the house two weeks ago from the Senate that the increase in funds to counties meant a reduction to allocation to the National Government Constituency Development Fund(NGCDF) and National Government Affirmative Action Fund(NGAAF).

The majority of Senators who responded to the rejection of their proposed amendments by their colleagues in the National Assembly of the house said that it was imprudent for them to seek an allocation to the 47 counties capped at Sh391 billion and go ahead to castigate the Senate which was only championing for the development of the country through devolution.

During the first meeting of the joint committee held last Thursday, Nyoro said that contrary to perception out there the National Assembly fully supported devolution and that the reason they had stuck with Sh391 billion as shareable revenue to counties was due to financial constraints the country was currently facing.

 “The National Assembly Budget Committee that I chair met with the Council of Governors and found out that there are funding gaps and that they had to look for an extra Sh4 billion as a conditional grant for health to counties, that is why we are willing to move the shareable revenue to counties to Sh395 billion to address this shortfall,” said Nyoro.

The Kiharu MP said that they should deliberate and resolve the impasse as soon as possible and that it was worth noting that Sh391 billion was proposed by Intergovernmental Budget and Economic Council which was affirmed by the National Assembly with the Senate proposing Sh415 billion while the Commission for Revenue Allocation had proposed Sh396 billion to be released to the counties.

Nyoro said the country was working with a budget of about Sh4.1 trillion with Sh270 billion slashed off and now they are dealing with Sh3.8 trillion and that they had set a ceiling of Sh391 billion for counties with the proposal of Sh415 billion by the Senate being untenable.

Nyoro said by the Senate dealing with a figure of Sh415 billion will create a deficit of Sh24 billion and that there is need to cap a deficit at the GDP ratio of 2.9 percent and that they are not dealing with an open envelope which has led to the cost of borrowing coming down gradually.

He said some of the considerations are that they should cede the Roads Maintenance Levy Fund to the counties and that if they agree with the Senate they will have Sh10 billion slashed from the Nation Government Constituency Development Fund to go to this fund.

Murungi said that the decision by the Senate to push to have Sh415 billion allocated to the counties was meant to ensure that they are able to run their operations and that counties cannot be starved of funds because one governor or the other is misusing public funds terming it as blanket condemnation.

“Members of the National Assembly did not use kind words when dismissing the Senate proposal for the increase of allocation of funds to counties to Sh415 billion, they should have instead expressed their reservation in a civilized manner since I believe it is the wish of every Kenyan having devolution working,” said Murungi.

Kitutu Chache North MP Japheth Nyakundi said that devolution plays a crucial role but the country is operating under strained financial times and that as much they support counties they have to live with the fact that there is no enough money that is why the National Assembly supported Sh391 billion.

Nyakundi said that instead of increasing money allocated to the counties Senators should get more money for oversight so that they can ensure that there is value for money going to the county governments since there are a lot of corruption-related cases witnessed across the 47 counties.

Uasin Gishu Senator Jackson Mandago said that having served as Governor he can attest that devolution is working with issues at grassroot level addressed well addressed compared to when the central government was responsible for all functions and that they wanted all devolved functions to be under counties

“We are not looking at additional resources but making good use of what is available with a view to redirecting functions that are in national government and ought to be devolved with most government agencies performing devolved function gobbling up billions of shillings that could have been used well under counties,” said Mandago.

The Uasin Gishu Senator said that Agriculture and Health Ministries budgets have been increasing in the last 10 years while the functions are 95 per cent devolved and that they need to look at functions that are being duplicated at the national level.