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Counties to get Sh400b in new budget after deal

BUSINESS NEWS
By Roselyne Obala and Moses Nyamori | February 11th 2021

Laikipia Governor Nderitu Muriithi, Deputy President William Ruto and Treasury CS Ukur Yatani at the 14th Ordinary Session of the Intergovernmental Budget and Economic Council in Nairobi yesterday. [DPPS]

County governments are expected to get Sh409 billion in this year’s budget, an increase from Sh369.9 billion they were allocated in the 2020/2021 financial year.

However, this will be subject to approval by parliament.

This emerged yesterday after the Intergovernmental Budget and Economic Council (IBEC) that brought together Treasury CS Ukur Yatani, Commission on Revenue Allocation chairperson Jane Kiringai, Controller of Budget Margaret Nyakang’o, Devolution PS Charles Sunkuli, all finance CECs, and chaired by Deputy President William Ruto.

Counties will also be at liberty to borrow up to Sh60 billion to bridge the shortfall in development expenditure in the current budget, thanks to the deal hammered during the meeting at Ruto’s official residence in Karen, Nairobi.

The figures shot up after President Uhuru Kenyatta committed to increase the counties’ equitable share vote by Sh53.5 billion to hit Sh370 billion from Sh316.5 billion presently.

However, conditional allocation and conditional grants reduced from Sh53.3 billion to Sh39.8 billion.

Ruto said he had negotiated Sh370 billion as equitable shareable revenue to counties with Sh39 billion as a conditional allocation and grants.

Of the 47 governors, only Laikipia’s Nderitu Mureithi, Paul Chepkwony of Kericho attended the meeting. The most conspicuous absentee was the new Council of Governor chairman Martin Wambora of Embu.

“County governments will get Sh409.88 billion in the 2021/2022 financial year, reflecting a Sh53.5 billion increase. The increase in resources will facilitate post Covid-19 pandemic economic recovery and ensure sustained service delivery,” Ruto said after the meeting.

The DP said the figure comprises equitable share of Sh370 billion, conditional allocations from the share of National Government revenue of Sh7.53 billion and conditional allocations from proceeds of loans and grants by development partners of Sh32.34 billion.

The DP said the proposed county governments’ equitable share of revenue, raised nationally for the financial year 2021/2022, was arrived at by adjusting their 2020/21 financial year allocation of Sh316.5 billion by Sh36.1 billion.

“It also involves converting four existing conditional grants to counties into unconditional grants,” said Ruto.

The growth, he argued, will be derived from anticipated improvement in revenues raised nationally in the 2021/2022 fiscal period when the effects of Covid-19 are expected to ease.

During the 14th Ordinary Session of the IBEC, governor Ndiritu said the meeting made a remarkable achievement.

“This is a big breakthrough. Getting Sh409 billion is not easy. Counties will also be able to seek financial credit of up to Sh60 billion pegged at 20 per cent of the fiscal budget and it starts now,” said the Laikipia governor, who is also the CoG finance, planning and economic affairs committee chairman.

He added: “In the past, governors have been attending these meetings in record numbers because there was acrimony on the amount allocated to counties. Today (yesterday), it was cordial and we surpassed the magical Sh400 billion mark.”

“By virtue of being the council finance committee chair, I have the statutory obligation to negotiate on behalf of the county governments. The substantive attendees are the chair, the CS for Treasury and the finance CECs who were all present.”

Governors once matched to court over revenue standoff. However, we are all in agreement this coming budget, Ndiritu said.

Settled on figure

Ndiritu, who downplayed the absence of Wambora from the meeting, said they settled on the figure after a series of meetings between CoG, National Treasury and the CRA.

Yesterday, Senator Kilonzo Jnr, who is also the Minority Leader, termed the deal excellent in defending devolution.

“We don’t expect anything short of Sh370 billion as shareable revenue. Conditional grant must also be included to counties,” said Kilonzo Jnr.

He added: “The court in petition number 256 was clear that Division of Revenue Bill should not include things such as conditional grants. That should be defected from the National Government allocation and appropriation there.”

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