Senators reject new revenue sharing formula for counties

The Senate has warned that a new sharing of revenue proposal by the Commission of Revenue Allocation (CRA) will see 31 counties lose over Sh10 billion as their share of revenue allocation will be slashed in favor of marginalized counties.

Despite the commission seeking an extra Sh30 billion under the fourth system that comes into force next year, the Senate vowed to shoot down the proposal terming it as defective.

This came as the Commission said that there would be a Sh12 billion stabilization fund to cushion counties affected by the new system.

On the other hand, seven counties mainly in Northern Kenya will benefit from an extra Sh7B in the fourth system which is based on four parameters according to the commission.

This emerged at the end of a three-day mid-term assessment retreat for the Senators at Enashipai Spa in Naivasha in which the Senate agreed that no County should lose in revenue allocation.

During a heated debate, most of the senators termed the new proposal as defective while a few benefitted.

According to Kirinyaga Senator James Murango, the Senate was in darkness over the proposal that sought to have funds to come counties slashed.

Addressing the press, Murango proposed that CRA should instead retain the current allocation plan instead of introducing new ideas.

“Under the new proposal by the Commission of Revenue Allocation, 31 counties will lose at the expense of seven counties and we cannot agree to this,” he said.  

Murango noted that the proposal favored some of the counties in Northern Kenya based on landmass and not the poverty index.

This was echoed by his Murang’a counterpart Joe Nyutu who wondered where the extra Sh30B proposed by the Commission would come from.

He dismissed a proposal by CRA that it would have a stabilization fund of Sh12 billion to cater for counties that lost in the allocation terming this as unachievable.

“This government has in the past failed to keep its promise when it comes to allocating cash to counties and the proposal by CRA for an extra Sh30B does not hold water,” he said.

Nyutu added that if implemented, service delivery in the 31 counties would be grounded as this was cash that had been budgeted for.

Migori Senator Eddy Oketch said that the CRA had based the proposal on four parameters including geographical size, population, income distance, and poverty index.

“The commission in its decision decided to use land mass only in calculating revenue allocation while forgetting that there are counties that rely on water bodies for survival,” he said.

Addressing the retreat, CRA Chairperson Mary Wanyonyi assured the Senators that no county would lose its share of revenue due to the introduction of a stabilization fund.

She said that the Sh12B would come in handy to caution counties whose share would be reduced if the new proposal sailed through.

“We are seeking an extra Sh30B for the counties and a part of this will go to the stabilization fund and counties that have been marginalized for long will benefit,” she said.

Wanyonyi noted that the lack of accurate data from the counties had affected the Commission assessment mainly on the income distance.