Treasury and National Assembly partners in stifling devolution

President Uhuru Kenyatta signs the Appropriation Bill 2019 into law at State House, Nairobi. [PSCU]

President Uhuru Kenyatta’s assent to the Appropriation Bill adds complexity to the controversies arising from the disputed 2019/20 national budget.

Problems became evident when the National Assembly and the Senate failed to agree on the division of revenue between the national and county governments.

After the constitutionally-mandated mediation committee the two houses established failed to reach agreement, the National Assembly then invited the Treasury Cabinet Secretary to present his budget, the debate on which led to the Appropriations Bill, which the President has now approved.   

The composition of the mediation committee showed the vastly different approaches that the two houses took on the dispute. Senate members of the committee included the chair of its finance and budget committee, Mohamed Mahamud while other members were the majority whip and Nakuru senator Susan Kihika, her minority counterpart and Makueni senator, Mutula Kilonzo, Nairobi senator, Johnson Sakaja and Narok senator, Ledama ole Kina.

On the Assembly side, the members were the leader of the majority Aden Duale, his minority counterpart, John Mbadi, deputy majority leader, Susan Mbarire, the chair of Assembly budget committee and Kikuyu MP, Kimani Ichungwa, and a member of the budget committee, Makali Mulu.

While the Senate leadership did not participate in the mediation committee, both the majority and minority leaders of the Assembly were members.

If the two had not participated, they would have been available for any informal tie-breaking consultations following the collapse of the formal mediation.

By bringing its two most senior members to the mediation table, the Assembly maximised its negotiating power from the beginning, leaving no room for subsequent compromise.

Also, deploying the two most senior members in an antagonistic role meant that they could no longer credibly play a more conciliatory role as would have been needed to break the emerging impasse.

The Assembly came to the negotiating table with an embedded conflict of interests: having enacted the National Government Constituencies Development Fund Act in 2015, which replaced the Constituency Development Fund the High Court had invalidated, the Assembly is entitle to a minimum of 2.5 per cent of “all the national government’s share of revenue” as divided by the annual Division of Revenue Act.

The Assembly has an interest in maximising the share of the national government in any division of revenue negotiations, since its members derive a percentage of this revenue for their constituencies.

Established to replace CDF, whose unconstitutionality the High Court established in February 2015, the constitutionality of this new fund is itself doubtful, besides the conflict in which it places the National Assembly.

The failure to agree on the division of revenue is the source of two lessons. First, it demonstrates the fact that in the budget-making process, the interests of the Treasury and those of the National Assembly are now aligned. The more the money they retain at the centre, the larger their respective shares.  

Although there should be a healthy tension between the national treasury and the legislature in the budget-making process, the tension has been removed by allowing the Assembly, as an organ of the legislature, to partake of the revenue of the national government

Whatever its legal status, the fund that replaced CDF plays a major role in the realignment of interests between the legislature and the executive in relation to financial procedures. In that realignment, the Senate has been side-lined while the Assembly is the beneficiary of a sweetheart deal with the executive.

Secondly, the on-going experience underscores the importance of the much-maligned Senate in safeguarding the country’s devolution system. There can be no devolution without money.

Without the Senate to insist on a share of national revenue going to the counties, there will be an uncontested tendency by the Assembly and the treasury to concentrate the allocation in the national government.

The different reactions by the Senate and Assembly to the failure of the division of revenue bill tell their own story. The Senate wanted a new bill and a fresh attempt at negotiating the sharing. On its part, notwithstanding the collapse of the negotiations, the Assembly invited Treasury Secretary, Henry Rotich, to read his budget, presenting the Senate with a fait accompli. The presidential assent to the Appropriations Bill has only consolidated a view that the objections of the Senate will now not be considered.

The national government is frequently accused of secretly undermining devolution. The handling of this dispute will only add to that perception while also exposing the political isolation of the Senate. The judiciary has also been sucked in as the dispute has already gone to court.

Yet again, the national government is putting the country in a situation of brinkmanship that was very avoidable. Whichever way it will end, this dispute can only weaken rather than strengthen the country’s constitutional culture.  

- The writer is the executive director at KHRC. [email protected]