Governors call for overhaul of revenue formula, say it hurts devolution

Tharaka Nithi Governor,Muthomi Njuki,Nyeri Governor Mutahi Kahiga and Kirinyaga Governor Ann Waiguru during a media briefing after meeting to deliberate on the recent bugdets cuts as per the County Governments Additional Allocations Bill, 2024 passed by the National Assembly Nairobi on 21st March 2025. [David Gichuru, Standard] The Council of Governors yesterday pleaded with the senate to dismiss the flawed proposed revenue sharing formula by the Commission on Revenue Allocation (CRA). Appearing before the Senate Finance and Budget Committee that is currently considering the proposed formula, the Council of Governors Finance Committee Chairperson Fernandes Barasa called for a complete revision of the proposal. Barasa called on the Senate to establish the claims of inducement of the Commission on Revenue Allocation commissioners by some interested parties to come up with a 'skewed' formula that is unfavourable to most counties. "We are calling on Senators to kindly dismiss the proposed revenue sharing formula as proposed by the Commission on Revenue Allocation since it is flawed and discriminatory and should be overhauled for the good of the 47 counties," said Barasa. Barasa, who was accompanied by Governors Kimani Wamatangi (Kiambu), Abdulswamad Nassir (Mombasa), Issa Timamy (Lamu) and Nakuru Deputy Governor David Kones said that they cannot accept a formula that is going to be detrimental to other counties. The Council pointed out that some of the parameters captured in the proposed formula are vague, unscientific, too academic, and impractical, urging the Senate to make several changes to ensure they do not work against the gains made in devolution. The Senators took the Governors to task for being blunt and lacking seriousness with the whole debate of the revenue formula as they pondered on whether to retain the current formula to guide the sharing of resources among 47 devolved units for another five years. Barasa highlighted that some 31 counties are set to lose billions of shillings if Parliament approves CRA's proposal emphasising the importance of a fair, transparent, and efficient fourth basis for revenue sharing to be adopted calling for Senators support to achieve this. According to the formula which will determine how counties share revenue from 2025-26, CRA has assigned the population the biggest weight at 42 percent while in the current formula, the population weight is 18 percent. The population was weighted at 45 percent in the second-generation formula, while it was weighted at 45 percent in the first framework and geographical area given a weight of nine percent from the current eight. Equal share has been given a weight of 22 percent from the current 20 while the weight for the poverty index has been retained at 14 percent while CRA has introduced the income distance index and assigned it a weight of 13 percent. Mary Chebukati, CRA Chairperson pointed out in a report to the Senate saying that to facilitate service delivery, the recommendation provides for an equal minimum allocation across all counties, using population and geographical size as the key transfer parameter. "To address economic disparities and promote development, the framework uses income distance and poverty parameters as measures of inequality among county governments," stated Chebukati in the report. Barasa told the Senators that the parameter on income distance should be elaborated and subjected to a wider stakeholder engagement or dropped for a more widely acceptable parameter it will further compound income and productivity inequalities. Nassir argued that they should not be seen to be rewarding poverty since it appears that the poorer you are the more money you get, arguing that the parameter only sought to reward poverty, adding that the framework had a sunset clause. The Committee Chairperson, Mandera Senator Ali Roba accused the Governors of being too shallow in their submission on the proposed formula stating that if they were to work with their written submission, it would be the shallowest that has been approved. Roba told the Governors that in future when preparing submissions, they should be aware that it is a critical issue which will affect counties and they should not criticize without making counter proposals. The Governors owned up to the mistake and sought for a week to modify their submission requesting the Senators to give them until Wednesday next week to resubmit their watertight proposal, citing time constraints. Kakamega Senator Boni Khalwale sought the opinion of the governors on the proposal to retain the current formula stating that in South Africa, they retain a formula for 10 years. The Council of Governors assured they would support the retention of the current formula provided it guarantees that no county would lose revenue imploring the Senators to back them up

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Governors call for overhaul of revenue formula, say it hurts devolution

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