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Nairobi to pocket Sh20 billion in new revenue share plan

By Roselyne Obala | February 21st 2021

Nairobi county Assembly plenary during a debate. [Samson Wire, Standard]

Nairobi County will get the lion’s share of the proposed Sh409.8 billion that will be allocated to counties in the next budget, should Parliament give its approval.

In the draft County Allocation of Revenue Bill, 2021, the devolved units will get Sh370 billion as their equitable share of revenue raised nationally, Sh7.5 billion from the national government as conditional allocation, and a further Sh32.3 billion in loans and grants from development partners.

“The shareable revenue to counties in the financial year 2019/2020 is Sh316.5 billion. Therefore the Sh370 billion in the next budget is one half of the equitable share allocation to counties in the current budget amounting to Sh158.25 billion,” said National Treasury Cabinet Secretary Ukur Yatani.

He added: “Once you net out one-half of the amounts of the allocation ratio or Sh158.25 billion from the equitable share of Sh370 billion, the resulting balance of Sh211.75 billion shall be allocated to county governments using the third basis for equitable sharing of revenue.”

Nairobi is set to get Sh20.3 billion, Nakuru and Kilifi (Sh13.9 billion each), Turkana (Sh13.5 billion), Kakamega (Sh13.2 billion), Kiambu (Sh12.46 billion), Mandera (Sh11.9 billion) and Bungoma (Sh11.2 billion).

Wajir will get Sh10 billion, Garissa (Sh9.2 billion), Mombasa (Sh9 billion), Narok (Sh9 billion), Kwale (Sh9.5 billion) and Makueni (Sh8.9 billion).

Counties that will receive the least allocation include Lamu (Sh3.7 billion), Tharaka Nithi (Sh5 billion), Elgeyo Marakwet (Sh5.5 billion), Isiolo (Sh5.52 billion), Vihiga (Sh5.69 billion), Embu (Sh5.7 billion) and Laikipia (Sh5.9 billion).

The increase in allocation past the magical Sh400 billion mark follows years of disputes between the Executive, senators and governors. The deal was hammered out after months of deliberation in the Senate over the Commission on Revenue Allocation’s third basis for equitable sharing of revenue.

The fight over additional funds to the counties triggered the arrest of three senators Cleophas Malala (Kakamega), Steven Lelengwe (Samburu) and Christopher Langat (Bomet) hours before the matter was to be discussed in the House last year.

Senators’ demands

In the end, the State gave in to demands of 25 senators led by Johnson Sakaja (Nairobi), Mutula Kilonzo Jnr (Makueni), Stewart Madzayo (Kilifi), Kithure Kindiki (Tharaka Nithi), Kipchumba Murkomen (Elgeyo Marakwet), Enoch Wambua (Kitui) Ledama Ole Kina (Narok), Mahamud Mohammed (Mandera) Mohammed Faki (Mombasa) and Fatuma Dullo (Isiolo).

With the projected allocation, the quest by the senators, who were christened ‘Team Kenya’– to ensure no county loses funds as had been proposed by the CRA and the Senate Finance Committee, has carried the day.

“The National Treasury has taken into account the approved formula for allocating revenue among counties pursuant to Article 217 of the Constitution, whose implementation would be preceded by a Sh53.5 billion increase,” said Yatani.

He added: “It is expected that with successful implementation from financial year 2021/2022 to 2024/2025, the county governments will now be able to plan, budget and spend in accordance with areas of need envisaged in the formula as well as achieve their developmental needs.”

Since the inception of devolution in 2013, next year’s budget will be the highest; taking the total allocation to counties to over Sh2 trillion under President Uhuru Kenyatta’s administration even as the Building Bridges Initiative (BBI) seeks to further increase counties’ share of national revenue from 15 to 35 per cent.

The government’s Sh7.5 billion conditional allocation will see counties receive a total of Sh7.205 billion for the managed medical equipment services, which is in its seventh year. The amount has increased from Sh6.205 billion in the current budget.

Each county will get Sh153,297,872 towards the payment of modern medical equipment to ease access to specialised healthcare services and significantly reduce the distance Kenyans travel in search of the same.

The balance of Sh332 million, which is the government’s 70 per cent share, will go towards construction of five county headquarters. The programme that is in its fourth year of implementation will see Tharaka Nithi get Sh76 million, Isiolo (Sh68 million) and Lamu (Sh38 million) while Nyandarua and Tana River will each get Sh75 million.

Of the Sh32.3 billion in loans and grants from development partners, Sh800 million is credit from the World Bank to mitigate the risks of the desert locust invasion in 15 counties.

The funds will be shared out as follows: Elgeyo Marakwets (Sh47.8 million), Machakos (Sh28.3 million), West Pokot (Sh34 million), Meru (Sh47.9 million), Embu (Sh28.3 million), Turkana (Sh120.2 million), Baringo (Sh27.9 million) and Isiolo (Sh76 million).

Tharaka Nithi will receive Sh29.5 million, Mandera (Sh52.9 million), Marsabit (Sh84.5 million), Wajir (Sh50.5 million), Kitui (Sh38.9 million), Samburu (Sh91.7 million) and Garissa (Sh40.4 million).

“The grant is to support livelihood protection and restoration to the communities/ households negatively impacted by the desert locust invasion. The allocation criteria is based on hectares under crop and pasture damaged, number of households and wards affected,” said Yatani.

The counties will also receive Sh4.6 billion to go towards Covid-19 mitigation.

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