Governors welcome Sh400 billion allocation to counties

Chairperson CoG Anne Waiguru, with Nandi Governor Stephen Sang (left), Kiharu MP Ndindi Nyoro, and Homabay Governor Gladys Wanga in a meeting at the Senate. [File, Standard]

The Council of Governors (CoG) has lauded the decision by the Parliamentary Mediation Committee to allocate counties Sh400.1 billion for the financial year 2024/2025.

The CoG Chairperson Anne Waiguru ="https://www.standardmedia.co.ke/politics/article/2001496011/win-for-county-governments-as-revenue-grows-to-sh400bn">said that devolution was meant< to bring development closer to the people and ensure the transformation of regions that had been marginalised for years.

Waiguru thanked the Committee co-chaired by National Assembly Budget Committee Chairman Ndindi Nyoro and Senate Deputy Speaker Kathuri Murungi for reaching an agreement on the Sh400.1 billion as shareable revenue to counties.

“The Council of Governors is grateful to the Parliamentary Mediation Committee which settled on Sh400.1 billion as shareable revenue to counties in the financial year 2024/2025, we also thank members of the two Houses for resolving this matter amicably,” she said.

The senators and Members of National Assembly who were in the mediation team reached a compromise on Monday evening after daylong deliberations with heated exchanges witnessed from both sides pushing to have their position adopted.

The Senate had recommended that counties to be allocated Sh415 billion which was rejected by the National Assembly insisting on Sh391 billion allocation.

="https://www.standardmedia.co.ke/entertainment/nairobi/article/2001489694/governors-raise-alarm-over-revenue-sharing-stalemate">The CoG argued that< counties had been subjected to additional non-discretionary expenditures that will increase their cost of operations by more than Sh20 billion in the 2024-2025 financial year.

While appearing before the Senate Finance Committee, the CoG explained that the new housing levy deductions will increase county's expenditures by approximately Sh4 billion and that they needed more funds to cater for the additional expenses.

Governors noted that the National Social Security Fund (NSSF) will cost the counties an additional Sh3 billion while the new Social Health Insurance Fund contributions will further push up expenditure. 

CoG argued that the proposed allocation of Sh391.1 billion as equitable share of revenue to counties, would have subjected devolved units to major challenges in service delivery if the Division of Revenue Allocation Bill passed in its current form.

“There are legislations that have financial implications to county governments, the housing levy and the NSSF will have an implication on the payroll of county governments since they are non-discretionary expenditure which county governments cannot avoid,” said Waiguru.

National Assembly Budget Committee Chairman Nyoro who co-chaired the talks said that it was a win for devolution since it was the first time that the two Houses agreed on the contentious issue and asked governors to make good use of the funds.

“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,” he said.

The Senate Deputy Speaker Murungi who co-chaired the talks with Nyoro said they were proud that counties had gotten 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 to increase allocation to Sh415 billion.

He 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 deliver devolved functions.

The Division of Revenue Allocation Bill was published and introduced in the National Assembly in March 12, 2024 after which it was considered and approved without amendments on March 20, 2024 with a proposal of Sh391 billion allocation for counties. The Bill was referred to the ="https://www.standardmedia.co.ke/business/business/article/2001491382/counties-dealt-blow-on-demand-for-sh439-billion-equitable-share">Senate for concurrence which< made an amendment with a proposal of Sh415 billion for the shareable revenue.

The Senate Speaker Amason Kingi and his National Assembly counterpart Moses Wetang'ula appointed nine members each to join the parliamentary mediation committee so as to resolve the crisis caused by the National Assembly rejecting amendments made by the Senate on the Bill.

Senate Deputy Speaker and Meru Senator Murungi and Kiharu MP Nyoro were elected as the co- chairmen for the mediation committee during the first meeting held in Parliament Buildings, Nairobi.

Wetangula appointed MPs Nyoro, Mary Emase (Teso South), David Ochieng (Ugenya), Samuel Atandi (Alego Usonga), Samuel Moroto (Kapenguria), Japheth Nyakundi (Kitutu Chache North), Naisula Lesuuda (Samburu West), Makali Mulu (Kitui Central), and Ali Wario (Garsen).

Kingi appointed Senators Murungi, Moses Kajwang (Homa Bay), Boni Khalwale (Kakamega), Edwin Sifuna (Nairobi), Fatuma Dullo (Isiolo), Jackson Mandago (Uasin Gishu), Kavindu Muthama (Machakos), Mohammed Chute (Marsabit) and Eddy Oketch (Migori).