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Nairobi, Turkana get lion’s share as counties receive Sh69bn more

COUNTIES
By By MOSES MICHIRA | December 4th 2013

By MOSES MICHIRA

Counties have been handed an additional Sh69 billion in the next financial year, amid concerns about low capacities to utilise the funds that have been given so far.

This means the 47 counties will next year receive Sh279 billion from the national government, up from the Sh210 billion that was devolved in the current year.

Nairobi and Turkana will take the lion share of the Sh279 billion, according to the Commission on Revenue Allocation, which intends to use the same formula applied this year to distribute funds among the 47 counties.

The two counties will receive Sh13.2 billion and Sh10.5 billion respectively, while Kakamega completes the top three list at Sh9.8 billion.

“We are likely to use the same formula as last year in the sharing of the funds to the counties,” CRA communications director George Muruli said.

“We would, however, work out the horizontal share (formula for sharing the Sh279 billion) beginning January,” he added.

Going by the formula used in the present period, the allocation schedule will remain the same meaning that Nairobi still gets the biggest slice while Isiolo (Sh3.2 billion) and Lamu (Sh2.1 billion) counties receive the least.

Population size and poverty are the main determinants of the amount allocated to the respective regions.  The two factors are not thought to have changed disproportionately to warrant any change in the sharing formula.

A new aspect that relates to the financial discipline of the county governance could, however, change the final amount allocated to the counties. Counties with proper spending plans and prudent management would be rewarded from a Sh6 billion kitty.

The Sh6 billion is equivalent to 2 per cent, which will be spent to encourage prudent financial management among county governments while punishing the careless spenders, according to the CRA’s allocation formula.

Several governors and pro-devolution advocates, mainly the opposition coalition, have called for an increase in the amount of resources given to the county governments — and has now been granted by the Micah Cheserem commission. 

CRA will this morning launch the planned revenue sharing plan, which significantly raises the proportion given to the devolved units to 40.9 per cent of the Sh682 billion collected by the national government during 2011/2012.

Mr Muruli said raising the counties’ share from the current 32 per cent was based on a higher revenue base where the national government retained Sh400 billion, roughly the same amount as the current period.

The law has only set the minimum proportion that the national government has to cede to the counties, pegged at 15 per cent of the ordinary revenue collected, which includes taxes, but there was no ceiling.

The planned increment, however, comes hot on the heels of a recent status report from Treasury that the counties still had Sh38 billion lying idle in their bank accounts at the Central Bank of Kenya two weeks ago.

Narok County, which is home to the world famous Maasai Mara National Park, had not spent a cent from the Sh1 billion allocated this year, and even had an additional Sh215 million raised from its own sources.

Kakamega County, on the other hand, led in the absorption of the devolved funds after spending 60 per cent of the Sh1.8 billion released to it since July 1.

Kwale and Machakos had spent at least half of their allocation over the same period.

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