President William Ruto has diffused tension between the national and county governments that resulted in legal and political battles over equitable share of revenue.
During the 9th National and County Government Coordinating summit in Naivasha over the weekend, the president resolved the disagreement between the two levels of government after previous attempts by the Treasury and Deputy President Rigathi Gachagua failed.
Recently, Council of Governors (CoG) Vice chair Ahmed Abdullahi (Wajir Governor) criticised the Treasury for failing to adhere to the Commission for Revenue Allocation (CRA) recommendation that counties should get Sh407 billion up from the current Sh370 billion.
The governors have been demanding at least Sh425 billion as shareable revenue to the 47 devolved units but the Treasury disbursed only Sh370 billion.
"We express our discontent with the National Treasury's failure to build consensus on the county's equitable share of revenue despite the objective recommendation issued by CRA. During the consultative meeting, the National Treasury did not form the basis for deviating from the recommendations by CRA," Abdullahi said.
During the Intergovernmental Budget and Economic Council (IBEC) meeting chaired by the DP on February 1, he insisted that the government does not have additional funds for the counties.
"The issue we had with the Council of Governors is a simple matter, they are asking for Sh425 billion. CRA is saying in our scheme of mathematics you can give 407. The national government is saying 425 is good, we can give it to you but we don't have it. Sh407 billion is even better, but we don't have it, we only have Sh370 billion," Gachagua said.
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Currently, at least 16 counties have not received disbursements since October. Governors have accused the Treasury of funding the national government functions which have been devolved like health and agriculture. Counties are now burdened by accrued debts and pending bills owed to contractors and suppliers coupled with unremitted statutory deductions such as medical cover contributions and pension.
"The council is apprehensive that the continued allocation of funds set aside for devolved functions to the national government is an affront to devolution. The council shall not relent in its quest to make devolution work," said the Wajir Governor.
However, the two-day meeting between the governors and President Ruto offers a promise of better days ahead with the birth of 23 resolutions meant to iron out differences between the two levels of government.
The summit recommended timely disbursement of funds as per the approved disbursement schedule while also enhancing devolution by having a committee look into state corporations still carrying out devolved functions. In what seems like a long overdue initiative, President Ruto further pledged to explore and develop mechanisms to improve the capacity of devolved units to generate their own income.
"We have undertaken to ensure transfer of revenue is timely predictable and fully complied with by law," said the president.
The summit resolved that the national executive committed to relook into the national government's proposed 2023/24 budget and programmes within the next week with a view to identifying areas of duplication to allow the transfer of those attendant resources to the counties.
"That the Intergovernmental Relations Technical Committee (IGRTC) shall fast track the process of identification, analysis and transfer of all pending devolved functions to the county governments in the shortest time possible," read the summit's communique.
The two parties also committed to developing an Inter-governmental framework to enhance collaboration between the levels of government to oversee different programs such as the national greening programme and the provision of sustainable water services in counties. Other key elements in the resolutions include Kenya Revenue Authority's withdrawal of all matters against and that all existing inter-governmental legal cases by one level of government against the other level of government shall be subjected to Alternative Dispute Resolution as provided for under the intergovernmental Relations Act, 2012.