More billions for Kenya's 47 counties in new sharing plan

County governments are set to receive an extra Sh53 billion in the next financial year under a revised revenue sharing formula.

Under the revised revenue allocation criteria released on Tuesday by the Commission on Revenue Allocation (CRA), the 47 counties are set to share a minimum of Sh279 billion, up from Sh226 billion allocated in 2014/2015 financial year.

The new formula, if approved by the Senate, would be used to allocate resources to the counties in the next three years.

Nairobi County would still get the lion's share in the next three years at Sh15.093 billion while Lamu would receive the least allocation of Sh2.266 billion.

Last year, Nairobi received about Sh11.3 billion while Lamu got Sh1.8 billion, indicating that the country's capital and most populated county would receive about Sh3.6 billion more while Lamu, the least populated county, would get an additional Sh436 million.

Although the commission has in the past provided the formula using five parametres - population, land size, poverty, equal share and fiscal responsibility - it has revised it to include two new parametres that are personnel emoluments and development factor.

The weights of the parametre on population, equal share and land area have been retained at 45 per cent, 25 per cent and 8 per cent respectively while the parameter on poverty and fiscal responsibility have been reduced from 20 and 2 per cent to 18 and 1 per cent respectively.

Gradually reduced

"To address the challenge of over-distribution in the first generation revenue sharing formula and to cushion counties experiencing huge personnel emolument costs, the two new parametres of development factor and personal emoluments have been introduced," the report explains.

The CRA said the development factor in particular is introduced to address economic disparities among counties. "The parametre of poverty should gradually be reduced to zero and be replaced by development factor as a way of measuring development levels and not poverty index," Director of Revenue Linet Oyugi said.

If approved, the criteria would see Kakamega County receive the second highest allocation at about Sh9.5 billion, followed by Kiambu with Sh8.9 billion and Nakuru with Sh8.7 billion. Turkana is the fifth biggest beneficiary at Sh8.6 billion while Bungoma closes the top list of six at about Sh8.1 billion.

These counties, which ranked the most populated according to the 2009 national census, would receive the highest amounts. The exception is Turkana that has made it due to the large land size and high poverty levels.

The 2009 census ranked Nairobi as the most populated county with 3.1 million followed by Kakamega at 1.7 million then Kiambu with 1.62 million, Nakuru (1.6 million) and Bungoma is fifth at 1.4 million.

Isiolo, Samburu and Tharaka Nithi are also in the bunch of the lowest recipients at Sh3.4 billion while Taita Taveta closes the list of least five at about Sh3.6 billion.

Lamu is the least populated county with a population of 101,539. Before that are Isiolo with 143,294, Samburu (223,947), Tana River (240,075) and Taita Taveta (234,657).

In developing the second generation formula, CRA explained it adhered to principles of transparency, accountability and also took extensive public consultations.

According to the Constitution, CRA is mandated with reviewing and recommending to the Senate, every five years, the revised formula for revenue sharing. However, the Sixth Schedule of the Constitution specifies that the first and second formula should be made at three-year intervals.

"The Senate is expected to deliberate on and, if considered appropriate, to approve the formula in a accordance to the Constitution which stipulates that in determining the basis of revenue sharing, the Senate shall request and consider recommendations from the CRA as well as other bodies," the report reads in part.

CRA indicated that they are in the process of revising the revenue sharing formula between the two levels of government; national and county, and that it would be released the report by next month.

The commission yesterday said it had considered formula used by other countries such as South Africa, Ethiopia, Philippines and India arguing that from the various countries reviewed, intergovernmental transfers seek to address key objectives namely service delivery and redistribution.

The revised formula is good news for counties which are demanding more resources. CRA had tried to strike a deal between the national government and counties.

The Treasury wanted the figure of Sh226 billion retained while the Council of Governors was pushing for a minimum of Sh400 billion.

The council and the Opposition have separately been pushing for a referendum to have allocation to counties increased.