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Bill proposes to increase county allocations to Sh372 billion

By Wilfred Ayaga and Joan Letting | Published Tue, March 13th 2018 at 00:00, Updated March 12th 2018 at 22:55 GMT +3
National Treasury Cabinet Treasury Henry Rotich. [WILBERFORCE OKWIRI, STANDARD]

In summary

  • Giving devolved units more cash meant to boost development
  • The proposal comes in the wake of a National Treasury plan to slash county allocations in the 2017-2018 supplementary budget

Counties could get Sh372 billion in the next financial year if a new bill becomes law.

This will be an increase of Sh33.3 billion the devolved units received in the 2017-2018 financial year.

The proposal to increase allocations to the counties is contained in the Division of Revenue Bill 2018 expected in Parliament this week.

The allocation comprises an equitable share of Sh314 billion and another conditional allocation from the share of national government revenue amounting to Sh17.2 billion.

Conditional grants will be used on medical equipment (Sh9.4 billion), Level 5 hospitals (Sh4.3 billion), foregone user fees for county health facilities (Sh900 million) and rehabilitation of youth polytechnics (Sh2 billion).

Other grants include road maintenance fuel levy fund (Sh8.3 billion) and a World Bank credit under the universal healthcare project (Sh3.6 billion).

“The proposed vertical division of revenue proposed in the Division of Revenue Bill 2018 takes into account the cost of county governments' developmental needs and it is expected that counties will have the ability to perform the functions assigned and transferred to them,” reads the bill.

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The proposal comes in the wake of a plan by the National Treasury to slash county allocations in the 2017-2018 supplementary budget, a move that has attracted angry reactions from governors.

The county chiefs have resisted the budget cuts, arguing the counties are saddled with debts, struggling to pay salaries and unable to fund development projects.

Monday, Uasin Gishu Governor Jackson Mandago termed the proposal to reduce allocations by up to Sh18 billion "ill-advised". He said Treasury Cabinet Secretary Henry Rotich should focus on other sources of funds.

Entertain idea

“We are concerned that the Treasury is beginning to entertain the idea that they can reduce the revenue for counties. We want to tell Rotich that it is his business to manage the financial cash flows of the nation. If you slept on the job, then cut the national budget. If you did not collect enough revenue, that is your problem. We want our money. Reducing revenue is unacceptable,” Mr Mandago said.

Allocations to counties are based on a requirement that devolved units get not less than 15 per cent of the total Government revenue.

“The principal object of this bill is to provide for the equitable division of revenue raised nationally among the national and county levels as required by Article 218 of the Constitution to facilitate proper functioning of county governments and to ensure continuity of services,” the bill states.

National Assembly Budget and Appropriations Committee chairman Kimani Ichung’wa said giving the counties more funds was in line with Government policy to help them achieve development goals.

However, the Kikuyu MP warned against waste in the counties as he sought to justify the Treasury cuts.

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