Counties to share Sh370b as State seeks House approval

National Treasury Cabinet Secretary Ukur Yatani has said the allocation represents 26.5 per cent of the most recently audited State revenue. [File, Standard]

Nairobi, Kilifi, Turkana and Mandera counties are set to receive the biggest share of the Sh369.8 billion allocated to counties in the 2020-21 budget.

Treasury has prepared the County Allocation of Revenue Bill, 2020 which comprises Sh316.5 billion as equitable share and Sh53.3 billion as loans and grants by Treasury and donors.

Treasury has retained the equitable share at Sh316.5 billion, which is the same amount advanced to counties in the current financial year.

However, the loans and grants have been slashed by Sh8.6 billion from Sh61.9 billion advanced in the 2019-20 financial year to Sh53.3 billion in 2020-21.

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Senate has to adopt the Bill before Treasury's allocation is certified.

The grants include Sh9.43 billion meant for road maintenance, Sh6.20 billion for the Managed Equipment Service programme, Sh4.32 billion allocated to level five hospitals, Sh2 billion for rehabilitation of youth polytechnics, Sh900 million for User Fee Forgone and Sh300 million for construction of county headquarters.

According to the Bill, Nairobi City County will get the largest share, Sh15.95 billion of the total shareable revenue of Sh316.5 billion.

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This is compared to Sh15.91 billion it was allocated in the current financial year.

Kilifi County will receive Sh10.6 billion compared to Sh10.4 billion it received in the 2019-20 financial year.

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Turkana will receive Sh10.57 billion up from Sh10.53 billion in the period under review, while Mandera will get Sh10.22 billion.

Nairobi will get Sh702.89 million from Treasury in loans and grants while Kilifi will get Sh544.00 million, Turkana (Sh485.43 million) and Mandera (Sh477.24 million).

Other counties with favourable proposed allocations are Kiambu (Sh9.84 billion), Nakuru (Sh9.74 billion), Wajir (Sh8.54 billion), Meru (Sh8.10 billion), Kitui (Sh8.86 billion) and Machakos (Sh8.03 billion).

Lamu County, Tharaka Nithi, Elgeyo Marakwet, Isiolo and Laikipia will receive the least allocation of the shareable revenue.

They will receive Sh2.75 billion, Sh3.86 billion, Sh3.86 billion, Sh4.17 billion and Sh4.81 billion respectively in the financial year beginning July 1.

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Garissa, Bomet, Baringo, Kisumu, Homa Bay and Kajiado will get Sh7.06 billion, Sh5.5 billion, 5.12 billion, Sh6.83billion and Sh6.39 billion respectively.

“The county governments' equitable share of revenue was allocated on the second basis of the revenue allocation criteria approved by Parliament in accordance with Article 217 of the Constitution,” reads the Bill in part.’

The allocation is based on an individual county's geographical size, physical development, population and own source revenue performance.

According to the Division of Revenue Bill, 2020 also tabled in the Senate, the Treasury retained the equitable share at Sh316.5 billion and slashed the loans and grants.

According to Treasury Cabinet Secretary Ukur Yattani, the reason loans and grants were slashed is because of the continued under-performance by counties in revenue collection.

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“The proposals contained in the Bill take into account the fiscal framework set out in the Budget Policy Statement for 2020-21, and are intended to ensure fiscal sustainability specifically against the backdrop of escalating pressure on the fiscal framework occasioned by the increase in Consolidated Fund Services,” the Bill reads.

The Commission on Revenue Allocation had, however, proposed an allocation of Sh321.74 billion to the devolved units in the next financial year.

This was based on the third allocation formula proposed by the commission. The formula is yet to be approved by Parliament.

Mr Yattani noted in the Bill that the allocation represents 26.5 per cent of the most recently audited State revenue.

This is way above the minimum threshold of 15 per cent proposed in the Constitution.

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Treasury2020-21 budgetRevenue Bill2020