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Kenya’s National Treasury accused of frustrating devolution

NAIROBI
By Dominic Omondi | March 23rd 2016
Commission on Revenue Allocation chairman Micah Cheserem.

NAIROBI: Commission of Revenue Allocation has accused the national government of frustrating devolution by denying counties necessary funding and holding on to devolved functions. In a public forum organised by the Institute of Economic Affairs (IEA) to discuss the Division of Revenue Bill, experts questioned the national government's commitment to make devolution function properly.

Rose Osoro, a commissioner at CRA, said although more functions have been heaped on county governments including construction of roads, water and regional bodies, funds have not followed the functions making it difficult for county governments to operate.

John Kinuthia, a research analyst at the International Budget Partnership, said that in the shareable revenue- total revenue available for sharing between the two levels of government in accordance with a formula set out by CRA - the portion allocated to county governments has not risen proportionately.

Treasury has proposed to increase allocation to county governments by 7.8 per cent over last year's equitable share figure of Sh260 billion. This is lower than CRA's growth factor of 15.1 per cent. Kinuthia and Mr Osoro said Treasury has been at pains to explain how they arrived at their eight per cent growth factor.

Shareable revenue over the last three financial years has averaged a growth rate of 15 per cent. It is projected to rise by 11 per cent between 2015-16 and 2016-17. However, the county equitable share allocation will grow by eight per cent. Mr Kinuthia said this was a slight decrease from 21 per cent to 20 per cent.

"CRA used the annual revenue growth in revenue over the last three years based on audited revenue accounts," said Kinuthia who found that revenue growth averaged 15 per cent.

"It is also notable that the National Treasury had given a growth factor of 9.85 per cent in the draft Budget Policy Statement released in late January," he added.

Kinuthia said CRA uses audited accounts, which takes actual performance into account. National government also came under fire for dragging its feet on the reforms of parastatals which carry out functions meant for county governments.

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