Total allocations to counties drop
By Peter Theuri | June 12th 2020
The fight by counties to have their funding increased is set to continue as the allocation remained stagnant in the 2020/21 Budget.
Although the amount has been rising gradually, from Sh280 billion in 2016/17 to Sh302 billion and Sh314 billion in 2017/18 and 2018/19 respectively, the allocation for the year 2020/21 is Sh316.5 billion, the same as last year’s.
For a long time, county chiefs have been battling to have their allocations increased as devolved functions continue to burden local governments with limited resources. And while the proceedings have been promising over the years, a fresh might be brewing with the increments halted.
Total allocations have reduced as conditional grants tank, following a considerable dip in the value of allocations from loans and grants to counties.
These allocations have dropped by 23 per cent from Sh39 billion to Sh30 billion. This means the total allocations to counties took a significant drop, from Sh378 billion to Sh370 billion.
Ndiritu Muriithi, the governor of Laikipia, says many county functions will suffer as resources are unlikely to be enough.
“The services that were devolved to county governments require sufficient allocation of resources if they are to be successfully delivered. Quality of services will, therefore, suffer if the resources we have are not enough,” he said.
According to Article 202 of the Constitution, revenue raised nationally shall be shared equitably among the national and county governments, with additional allocations from the national government’s share of the revenue distributed conditionally or unconditionally.
In the conditional grants, the money allocated to county governments to supplement for construction of county headquarters has been reducing gradually, from an initial Sh605 million in 2017/18 to Sh300 million in 2020/21.
Allocations for the rehabilitation of village polytechnics, construction and refurbishment of level 5 hospitals, leasing of medical equipment and compensation for user fees forgone remained constant at Sh2 billion, Sh4 billion, Sh6 billion and Sh900 million, respectively.
The only allocation that grew was that from Fuel Levy Fund, from Sh8.98 billion to Sh9.4 billion.
The governors had already won one battle early this month when the Supreme Court ruled that the National Assembly cannot enact the Appropriation Bill, which allows the national government to incur expenditure before the enactment of the Division of Revenue Bill, which allows county governments to withdraw funds.
The decision means, in any financial year, Parliament must first pass legislation on the amount of money to be shared to the 47 counties before passing the budgetary allocation for the national government.
Last year, there was a standoff when the Senate and National Assembly failed to agree on the budgetary allocations that should be given to counties, with MPs insisting counties should receive Sh310 billion from Treasury, and senators demanded Sh335 billion.
But Muriithi said the impasse was a political scheme, adding that the billions that were being debated was a drop in the ocean out of a Budget of Sh3.02 trillion. “Devolution is certainly working,” he said.
“With the fewer allocations, counties will have to seek alternative methods to raise funds, such as through leasing of county property.”
The governor said the National Assembly, which passes the Budget, usually takes into consideration recommendations of the Commission on Revenue Allocation but is not bound to take the propositions as presented.
This gives hope that the allocations might change for the better.
“We are waiting to see what will happen in the National Assembly during the consideration and approval,” Muriithi said.
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