Senate proposes increase of Sh3 billion to counties

The Bill provides for the addition of three key donor-funded projects that will be allocated to counties. [Photo: Courtesy]

Counties may get an additional Sh3 billion if a Bill to amending the Division of Revenue Act 2018 is passed in the Senate.

In a move to boost funding to the counties, the Senate Committee on Budget and Finance proposed amendments to the law that was signed by President Uhuru Kenyatta in April.

The amendments Bill calls for the inclusion of three additional and conditional allocations to county governments in the next financial year, to be financed by loans and grants from donors.

According to the Bill tabled by committee Chairperson Mohammed Mahamud, the allocations had not been provided for in the Division of Revenue Act 2018.

The Division of Revenue Amendment Bill 2018, which was dated May 18, is seeking to make provisions for the additional funding that had not been included in the Act.

The Bill provides for the addition of three key donor-funded projects that will be allocated to counties.

One of the projects in the amendment is the European Union-funded Water Tower Protection and Climate Change Mitigation and Adaptation Programme, worth Sh880 million.

Besides, a total Sh1 billion is to be allocated under the Agricultural Sector Development Support Programme (ADSP) II and Sh1.8 billion for the Kenya Urban Support Project, which is funded by the World Bank.

Once signed into law, the division of revenue Act 2018 allocated Sh372.7 billion in the 2018-2019 budget to counties. The allocation was an increase of Sh33.3 billion from what they got in the previous year.

County governments had been facing a cash crunch, leading to delays in the release of funds to pay salaries and fund development projects. The Sh33.3 billion represented a 33.6 per cent of the latest audited revenues for 2013-2014 (Sh935.7 billion) and is above the constitutional minimum of 15 per cent.

If approved, the amendments proposed by the Senate will increase the county allocations from Sh372 billion to Sh376 billion, increasing the counties' share to 40 per cent of revenue.

Equitable share of revenue raised nationally was arrived at by growing the county governments’ equitable share for 2017-2018 of Sh302 billion by a growth factor of four per cent.