How counties cash will be shared out

By Luke Anami and Njiraini Muchira

Areas long neglected by the Government will from next year be guaranteed a fixed share of all taxes collected by the Government under proposals on sharing the national cake among counties.

But county governments in the affected areas can only use the money to provide basic services, including water, roads, health facilities, and electricity.

According to the Commission for Revenue Allocation ( CRA), Article 204 of the Constitution gives the poorest counties a chance to catch up by making it a requirement for Treasury to give them 0.5 per cent of all national revenue. The cash will be dished out to the county governments once they are up and running next year. Under the Constitution, Treasury will have to set up an Equalisation Fund through which themoney will be directed to county governments in marginalised areas. This will end nearly 50 years of marginalisation for areas like Lamu, Wajir, Mandera, and Turkana, among others.

Commission for Revenue Allocation chairman Micah Cheserem. [Photo:File:Standard]

The fund will be in place for the initial next 20 years up to a time when the quality of those services in the marginalised areas is expected to improve, but Parliament can extend its lifeline. Any unspent money in the Equalisation Fund at the end of a financial year would be rolled over to the next year

Kenyans at the grassroots level will at last directly access funding from the national kitty, thanks to the Constitution they passed in August 2010.

Each county will decide which basic services need upgrading, and forward their choice to the Equalization Fund Co-ordination Committee steered by the CRA, with representation from relevant ministries and stakeholders.

Objective criteria

The committee will then make the final decision on which projects to fund based on objective criteria specified in the Policy on Alleviation of Marginalisation.

In a presentation on Thursday of its recommendations on revenue sharing for the counties, CRA used Sh200 billion, or 15 per cent of the total amount of revenue generated in Kenya.

"We have looked at the most equitable formula to allocate the funds and ensure there is fairness among all the counties," said CRA chairman Micah Cheserem.