Senate to blame for revenue crisis, CRA had addressed issues
By Kamotho Waiganjo | August 1st 2020
This week, I return to the discussion on the revenue formula currently under debate in the Senate.
Politics is definitely the greatest determiner of our public discourse, flowing from the unusual interest in the matter since it mutated into a political contestation in the last two weeks.
I come back to the issue because of the level of unawareness and disinformation that has been exhibited in the public discourse on the matter, even from people who should know better.
Firstly, it is important to know what is before the Senate is not the proposal that the CRA presented to the Senate. That was long adjusted by the Senate. I personally believe that part of the problem with the current formula are the changes introduced by the Senate, especially on the land criteria.
I say this because having studied the CRA proposal, there was a genuine attempt to address the challenges being raised in the Senate and in the public discourse. To contribute wholesomely to the discussion, one must read the Senate proposal and see how it improves or worsens the CRA proposal.
Secondly, it must be understood that the formula for the annual revenue division is not the cure for all of Kenya’s developmental challenges, including those that are the result of historically unjust and inequitable allocation of resources. Recognising the years of unfair political patronage and bad policy, including the infamous Sessional Paper No 10, the Constitution provides various interventions that allow us to attack this evil that renders children of parts of this country those of a lesser god purely by reason of their birth locale.
The first of those interventions is the annual revenue allocation process. Two of 11 criteria listed in Article 203 address the marginalisation issue. Each allocation formula is required to consider the “economic disparities within and among counties and the need to remedy them and the need for affirmative action in respect of disadvantaged areas and groups”.
These considerations must however be balanced with other nine criteria which address other considerations in revenue allocation. A cursory glance at the CRA proposal exhibits several components that address the marginalisation aspect. Taking just two, the health provision and poverty criteria, the former includes what is called a “facility gap”; an allocation that ensures that each county is allocated funds that will enable it increase its health centre infrastructure towards the ideal national average.
The poverty index criteria compensates counties whose citizens have borne an unfair portion of the poverty burden.
The second intervention is Article 204 that introduced the Equalisation Fund which is a proportion of all the revenue collected in the country. That fund is to be used to “provide basic services including water, roads, health facilities and electricity to marginalised areas to the extent necessary to bring the quality of those services in those areas to the level generally enjoyed by the rest of the nation, so far as possible”.
It is unfortunate that it took more than five years before this fund was ever operationalised, and even then, the national government insisted on running the fund until the courts intervened.
Thirdly, Article 201 requires the national government, in its development agenda, to ensure that public expenditure “promotes the equitable development of the country, including by making special provision for marginalised groups and areas”.
Consequently, in its planning and budget process, attention must be given to areas that are marginalised, moving away from the Sessional Paper No 10 approach. Fourthly, several Articles in the Constitution require that communities must benefit from natural resources that emanate from their regions.
Coincidentally, much of Kenya’s natural resources come from traditionally marginalised areas. Current laws on exploitation of natural resources, including those on petroleum and mining, mandate benefit sharing to county governments and local communities in reasonably generous proportions.
Unfortunately, we have focused on the trees that we have failed to see the forest; our concentration on the annual revenue share has stopped us from holding the government accountable in ensuring these other interventions are being used to ensure a more just and equitable society.
- The writer is an advocate of the High Court of Kenya.
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