By Nicholas Waitathu

Nairobi,Kenya:Allocation: Leaders want to increase revenue to meet counties’ financial obligations

A row is brewing between national and county governments over the ownership and management of natural resources. 

County governments faced with revenue shortfalls are laying claim to a share of the proceeds gained from resources in their jurisdictions.

But the move, according to analysts, could trigger a crisis between the national and devolved governments, frustrating growth in the counties and interrupting the smooth running of operations.

However, some stakeholders have dismissed the move by county governments as an exercise in futility as the Constitution is clear on what the national government is in charge of.

Constitution

“The Constitution also clearly spells out the resources to be managed by county governments,” Kenya Investment Authority (KenInvest) Managing Director Moses Ikiara said.

Resources such as harbours, railways, airports, gas and oil, according to the Constitution, are to be managed by the national government.   

Ikiara, however, noted that there is a need for clear interpretation of the legislation on resource ownership and management to prevent conflict between counties, and between counties and the national government.

Already, the Murang’a County government has asked for a share of the revenue Nairobi County generates from selling water from Ndakaini Dam.

Speaking to Business Beat last week, Murang’a County Governor Mwangi wa Iria said his office will constitute a committee of experts that will negotiate with Nairobi County and the Transition Authority (TA) so that an earnings-sharing formula can be crafted.

Mwangi argued that if Murang’a gets a share of the money other counties generate from its rivers, it would ease the burden of meeting its financial obligations.

Mombasa County Governor Ali Hassan Joho has also said his government should be given full autonomy to manage Kenya Port Authority.

In its budget estimates, Mombasa County has factored in Sh2 billion as revenue collected from the Mombasa harbour, even though  there is no legislation in place or agreement between the county and port authorities to remit levies to the devolved unit.

Other counties are expected follow suit with similar demands, with analysts expecting Turkana, Kitui and Malindi to be particularly interested in getting a share of the revenue generated from the oil, coal and gas deposits within their borders. 

Ownership

Treasury Economic Secretary Geoffrey Mwau, however, said counties cannot claim ownership of strategic resources such railways, airports and harbours as the Constitution puts them under the management of the national government.

But Dr Samuel Nyandemo, a senior economics lecturer at the University of Nairobi, supports the governors’ call for a share of revenue from resources, saying this will help them develop the area around the assets.

“A failure by government agencies to relinquish non-strategic resources is tantamount to committing economic injustice to the devolved governments,” he said. “If County A is currently utilising a resource tapped from County B, then the latter has the right to demand part of the proceeds being generated from the asset.”

However, Nyandemo advised that strategic resources be left to the national government as outlined in the law.

When contacted, TA Chairman Kinuthia Wamwangi said his agency is intent on finding a solution to these demands.

“This is an issue that requires serious tact to ensure the governance structure is not interrupted. In my opinion, there is a need for sharing of earnings between counties, and between counties and national agencies to propel growth,” he said.