High Court suspends distribution of equalization fund

Controller of Budget Margaret Nyakang’o when she appeared before the Senate Standing committee Finance and Budget on March 30, 2023 [Elvis Ogina, Standard]

The High Court has ordered the Controller of Budget not to authorize the release of equalization fund meant for marginalized areas in a battle on sharing criteria of the 2022-2023 allocation.

Justice John Onyiego has suspended a policy that dictates revenue sharing among marginalized areas until an application filed before him by four petitioners is heard.

“Restraining order is hereby issued against the respondents from implementing the Commission on Revenue Allocation second policy and criteria 2022/2023 for sharing revenue amongst marginalized areas pending the hearing and determination of this application inter parties,’’ ruled Justice Onyiego.

He directed the Controller of Budget and National Treasury not to authorize the withdrawal of equalization funds from the National Treasury.

Sahal Mugow, Abdi Madow, Muhamud Mohamed and Kusow Degow filed the case.

Through their lawyers Duwane and Wethow Advocates, the four argue that Commission on Revenue Allocation (CRA) board responsible for equalization published the policy without public participation.

“The Commission on Revenue Allocation did not carry out public participation in determining the revenue allocation criteria among the marginalized areas from the equalization Fund,” lawyer Mohamed Duwane argued.

They have sued the Equalization Fund board, CRA, the controller of the budget, the National Treasury and the Attorney General.

In the case, they accuse the board of discriminating Wajir County.

The petitioners have cited Dadaja Bulla Ward in Wajir South Constituency.

“The applicants are apprehensive that the respondents will soon proceed to implement the Commission on Revenue Allocation Second Policy and Criteria for sharing revenue among marginalized areas unless the orders sought in the application are granted,’’ said Duwane.

The fund is guaranteed under Article 204 of the Constitution. The essence of the money now at the centre of the court case is to run basic amenities such as health facilities, water, and electricity, to the poor and arid areas.

According to Kenya’s supreme law, at least 0.5 per cent of the most recent audited accounts of revenue received and approved by the National Assembly goes to the fund.

In the case, the judge heard that in the 2023 release, the seven wards in Wajir South are to receive at least Sh 277 million.

In the allocation, Benane ought to get Sh 74.4 million, Burder (Sh 31.1 million) , Badaja ( Sh 10.1 million), Diff (Sh 31.3 million), Habaswein (Sh 36.2 million), Ibrahim Ure (Sh 42.9 million) and Lagboghol South, Sh 51.2 million.

The group led by Mugow state that the Sh 10 million allocation is much lower than the other wards. They claim that the meagre allocation has been instigated by politics.

They further argue that the ward has been taken as one centre although it has six centres under it.

Justice Onyiego heard that Dadaja Bulla is a cross-border town that neighbours Somalia.

“Basic services like water, security, roads, health and education are hard to access, it is marginalized by the virtue of its location and should be given a special consideration whilst allocating the Equalization fund,” Duwane argued, adding that if the government does not intervene, draught, border closure is likely to push youths to extremism.

Equalization fund is provided for under Article 204 (1) of the Constitution. The article provides that 0.5 per cent of all revenue collected by the national government would be allocated to the fund.

The case will be mentioned on July 26, 2023.