Population still main factor for Kenya counties cash allocation

Mandera Senator Billow Kerrow (left)Kajiado County senator Peter Mositet (center)and Elgeyo Marakwet senator Kipchumba Murkomen during a press conference in Nairobi. PHOTO: BEVERLYNE MUSILI

NAIROBI: Senators and the Commission on Revenue Allocation (CRA) have retained population as the main parameter to guide revenue allocation.

And counties that demonstrate good fiscal discipline (capacity of a government to maintain smooth financial operation) will be rewarded to encourage the devolved units to promote prudent use of public funds.

The current formula where counties get 45 per cent of national revenue, but is pegged on population has been retained. Also retained is the 25 per cent that is shared equally among the 47 counties.

The poverty index parameter has been reduced from 20 per cent to 18 and development has been introduced as a new factor in the second generation five-year formula.

Finance, Commerce and Budget Committee Chairman Billow Kerrow said they had agreed with CRA on the formula that replaces the first formula that took effect in 2012.

"This is a product of compromise among all of us. It will be difficult to please every county but this will ensure there is equity across the country," Mr Kerrow said.

He thanked the Council of Governors, CRA and Kenyans who presented their contribution to ensure that they arrived at the compromise. Kerrow said the revenue allocation formula would easily pass in the House because it was based on consultation.

CRA Chairman Micah Cheserem said those counties that have increased revenue collection will be rewarded based on the records of the past three years.

"We will look at what they got in the past years, divide the population and base the two per cent on their indices," Mr Cheserem said.

Senate Deputy Majority Leader Kipchumba Murkomen, who was initially opposed to the CRA formula said there should have been emphasis on some sectors.

"I would have wished that a serious issue like health be handled separately and have it as a factor in the formula but we have decided to look at the bigger picture," said.

Cheserem thanked senators for their co-operation in ensuring that they reached a compromise.

Kakamega Senator Boni Khalwale said the success of the formula was its emphasis on equity and not equality but noted that the issue of population was likely going to be a serious factor during the 2019 census.

"Now that population remains a huge factor we need to be careful when conducting the census in the next few years because everyone will be fighting to increase their numbers to attract more funds," Dr Khalwale said.

"I would not be surprised if the Luhyas, Tesos, Luos, Kurias and Somalis, for instance, would want to add their numbers using their brothers across the border. Those doing the census will have to be cautious. Nigeria is now stuck on revenue allocation based on almost a similar issue," he said.