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Billions Governors set to control in Counties

COUNTIES
By Roselyne Obala | April 23rd 2014
Majority Leader Kithure Kindiki tabled the County Allocation of Revenue Bill 2014 before the House went on recess last week. [Photo: File / Standard]

By Roselyne Obala

Kenya: Nairobi and Turkana counties will, for the second year running, get the lion’s share of the county allocations, if proposals contained in the County Allocation of Revenue Bill 2014 are passed by Parliament.

According to the proposal contained in the Bill tabled in the Senate by Majority Leader Kithure Kindiki before the House went on recess, Elgeyo/Marakwet and Taita-Taveta get the least share. Interestingly, a similar Bill was yesterday being debated by the National Assembly through the second reading prompting Suba MP John Mbadi to demand answers from the Jubilee Majority Leader Aden Duale over the coincidence.

Speaker Justin Muturi, terming Mbadi’s concerns as legitimate, demanded to know from Duale whether the Bill before the House had originated from the National Treasury.

“I have looked at the Bill before Senate, and it is similar to the Bill before this House, except for the signature,” said Duale, saying he did not know why Senate had commenced the process of enacting the law.

“The procedure is that once we have passed this Bill here, we will send the same to the Senate in the form of a message. Senate will only proceed with the message that we send to them,” added Duale.

Muturi directed that the House continue its process and ignore what is happening at the Senate.

“We will just proceed with our process. What they (Senate) will do with that Bill before them is up to them,” ruled the Speaker.

According to the Bill Nairobi is set to receive Sh11.3 billion from the Sh226 billion in shareable revenue among the 47 Counties, which translates to 5 per cent.

In the last year’s allocation, the City County received Sh9.5 billion, while Turkana is to get Sh9.1 billion up from Sh7.7 billion which they got last year.

Other top counties include Mandera Sh7.8 billion, Kakamega Sh7.6 billion and Bungoma Sh7.4 billion.

Counties that will receive low shares include Lamu Sh1.8 billion, Isiolo Sh2.6 billion, Tharaka Nithi Sh2.7 billion, Taita Taveta Sh2.88 billion and Elgeyo/Marakwet Sh2.85 billion.

At the same time the counties will also share Sh13.9 billion conditional allocation which when broken down amounts to Sh3.5 billion for Rural Electrification, Sh3.4 billion for Level Five hospitals and Sh1.4 billion for village polytechnics.

Kindiki, however, faulted the current allocation formula, saying some counties are disadvantaged but remained optimistic that the criteria will be reviewed in the next financial year. “We need to review on population, area and poverty index as opposed to development index,” said Kindiki.

Governors are on record criticising the current allocation criteria and the shareable revenue with the national government, arguing that counties should get Sh238 billion.

Council of Governors chairman Isaac Ruto recently said counties should be allocated 45 per cent of the most recent audited revenue and not less.

Referendum

This position put the two levels of government at loggerheads and gave rise to the push for a referendum that the governors recently shelved, arguing that they are yet to exhaust available mechanisms.

Commission for Revenue Allocation (CRA) had proposed Sh279.1 billion. However, the proposed Bill differs with that position, and the argument is that the cost of setting up administrative structures at the counties is overstated.

CRA estimated that the latter would cost Sh48.3 billion, comprising of Sh38.1 billion for remuneration and Sh10.1 billion for other administrative costs.

Ruto and the Council of Governors Finance Committee chairman Ahmed Abdullahi Mohammed argue that county governments need Sh238 billion, excluding conditional allocation, to effectively carry out their functions.

Prof Kindiki argued that counties’ allocation had increased in this financial year, but Parliament relied on the county allocation formula.

“This legislation provides for the allocation of revenue raised by the national government and the conditional additional allocation among counties, as well as the transfer of the county allocations from the Consolidated Fund to the respective county revenue Fund,” he explained.

He said the Constitution requires that the formula be reviewed every five years, but since this is a transition period, it will be done in three years.

“The criteria for allocation were discussed in 2011 and therefore the next review is 2015,” he said.

The Tharaka Nithi Senator explained that there would be no conditional allocation as was provided for last year.

In the last revenue allocation, the Government allocated Sh210 billion to counties of which Sh190 billion was shared equitably, while Sh16.6 billion was conditional allocation and Sh3.4 billion for level five hospitals.

Prof Kindiki explained that the equitable share is shared among county governments on the basis of the revenue allocation criteria approved by Parliament and Article 217 of the Constitution.

Kindiki tabled the Division for Revenue Allocation Bill 2014 and the County Allocation of Revenue Bill, 2014 at the Senate before they went on recess last week.

However, his National Assembly counterpart Aden Duale faulted the move, stressing that the Senate must debate the National Assemblies’ Division of Revenue Bill and not Kindiki’s.

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