How Kenyan counties shared Sh291 billion cash pie

NAIROBI: The Senate has approved Sh291 billion to be shared out among the 47 county governments in the next financial year, with Nairobi taking the lion’s shareatSh19.95billion.

The County Allocation of RevenueBill2015proposes a total of Sh291.44 billion be divided among the 47county governments.

The proposed amount is Sh7 billion more than what was passed by the National Assembly under the Division of Revenue Act, which provides for equitable division of the revenue raised nationally between the national and county governments.

The figures will however, not hold until the legislation is referred back for the National Assembly’s concurrence  or, in case of a stalemate, a mediation team with representatives from both Houses would be constituted to hammer out a compromise.

According to the bill, which details how the total shareable revenue will be allocated in the 2015/16 financial year, Nairobi County will get Sh4.75 billion more than it received last year, while Lamu will get the least (Sh2.30 billion).

Turkana County (Sh10.87 billion) will get the second highest allocation followed by Kakamega (Sh10.08 billion), Mandera (Sh9.35 billion) and Nakuru (Sh9.06 billion).

If the bill is approved, Isiolo, Elgeyo Marakwet and Taita counties will each receive Sh3.32 billion, Sh3.59 billion and Sh3.62 billion, respectively.

Speaking during the Senate Finance Committee's meeting to scrutinise bill's Tuesday, Nyeri Senator Mutahi Kagwe said Nairobi got the highest share of the funds, but its allocation per capita (per person who resides in the county) was far less than that of some counties.

The main objective of the County Allocation of Revenue Bill is to make provision for the allocation of revenue raised nationally among county governments for the 2015/16 financial year.

While expressing confidence that Parliament would approve the figures proposed by the Senate, the senator pointed out that Nairobi's allocation per head stands at Sh6,358 while that of Isiolo is Sh23,225. The total allocation for Isiolo County is Sh3.32 billion.

"It is good to note that for Nairobi, even though it got the biggest share, the allocation for every resident is just Sh6,358 while Isiolo got Sh23,225 per resident. This is because of the differences in population," said Mr Kagwe.

Nairobi's population was put at 3.13 million while that of Isiolo was estimated at 143,294 people.

Other counties with huge per capita allocations are Lamu (Sh22,663), Marsabit (Sh18,877) and Tana River (Sh17,775). The three counties got Sh2.30 billion, Sh5.49 billion and Sh4.26 billion respectively.

Kagwe noted that the formula used to calculate the figures is the same one that was used last year.

"We did not agree on a second formula. The first formula was to last for three years, meaning we are still not time-barred. Its time will lapse in November this year," said the senator.

The Constitution requires that once in every five years, the Senate should, by resolution, determine the basis for allocating among the counties the share of national revenue that is annually allocated to counties.

Tuesday, Kagwe recalled that senators had gone to Naivasha and agreed on a proposed second formula for revenue allocation, but it was rejected on the floor of the House.

While rejecting the second proposed revenue allocation formula, the senators argued it did not address social parameters including health, agriculture and development.

LEVEL-5 HOSPITALS

The report, which was tabled by the committee's chair Billow Kerrow (Mandera), was defeated 13 to 11 with those opposing the criteria citing lack of consultation and discrimination of some regions.

In the proposals passed by the Senate Tuesday, conditional allocation for Level-5 hospitals was pegged at Sh3.6 billion. Level 5 hospitals received Sh1.87 billion in the last financial year.

Mombasa County got the biggest allocation for Level-5 hospitals at Sh402 million, while Embu County, with Sh192 million, got the least.

The hospitals provide specialised healthcare services to citizens residing outside their host county governments, usually for specialised treatment referred from lower level health facilities.

In order to compensate them for costs incurred rendering services to neighbouring counties, the national government allocated them the Sh3.6 billion.

The allocation of Equitable Share of Revenue increased from Sh226.66 billion in the 2014-2015 financial year to Sh259.77 billion for the 2015-2016 financial year.

According to the Constitution, the equitable share of the revenue raised nationally that is allocated to county governments should not be less than 15 per cent of all revenue collected by the national government.

The County Emergency Fund was allocated Sh4.4 billion. All the 47 counties will get Sh93.6 million from this pot.

The allocation to compensate health facilities for forgone user fees is Sh900 million. This allocation is intended to sustain the national government policy of not charging user fees in public health facilities.

The grant is to be allocated among county governments on the basis of the annual consolidated facility outpatient (OPD) attendance workload as reported in the Health Information System (DHIS).

The bill further allocates Sh3.3 billion for conditional grant from the Road Maintenance Fuel Levy Fund. The national government proposed to transfer 15 per cent of the Road Maintenance Fuel Levy Fund to the county governments. The grant is to be shared among county governments on the basis of the revenue sharing formula.