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How new revenue-sharing formula hurts less developed counties

By Billow Kerrow | July 15th 2020
Billow Kerrow: Equity is the only way out.  [File, Satandard]

The stalemate over the proposed revenue sharing formula in the Senate is not unexpected because resources shape the economic development of a county.

What is surprising is the attempt to arm-twist the Senate to approve it. However, it would be foolhardy, even disastrous, for senators representing the interests of their counties to vote for a revenue-sharing basis that would reduce their funds.

The determination of this formula represents one of the core mandates of the Senate. Until the new formula is adopted by the Senate, the current criteria will continue to be applied, meaning there will be no risk of the Senate failing to disburse funds to the counties even if it takes them two years to agree.

Devolution is premised on equitable distribution of resources in the country. For decades, national government officials determined how much resources and level of development a region gets, often skewed to favour areas with powerful people in the corridors of power. Political patronage influenced development priorities.

This led to marginalisation and deprivation in several regions of the country with basic services such as schools, health facilities, roads, water supply lacking.

Many counties drew a first when such basic services were provided across the country by the devolved governments.

The Constitution is very clear on the basis for sharing revenue between the national government and the counties, and between the counties.

One significant factor that stands out clearly in both cases when the Constitution is read wholly and objectively is equity. Period!

Fair share

Equitable resource allocation in the country will spur equity in the development of the nation. Without equitable sharing of resources, devolution remains hollow, unworthy of its implementation.

The proposed third-generation formula before the Senate fails the test of equity. In fact, it entrenches disparity and legalises skewed resource allocation.

The developed status of a county and its population numbers are deemed to be the key indicators for more revenue. If a county has good hospitals, access to roads, farms and its towns are urbanised, its get all the money.

These four parameters alone will take 43 per cent of all the revenue to be shared. There are counties that have all these and more, courtesy of political patronage. But most counties lack these and hence will be disadvantaged.

Arid and semi-arid counties, for instance, are deprived and will be grossly disadvantaged, if these parameters are considered.

The parameters and their weights were carefully crafted to favour regions endowed with past development. Every county or region in this country has been endowed but require resources to fully exploit its potential.

Constitution pillars

The formula denies a county resources to develop its hospitals because the proposed plan predicates allocations on existence of these hospitals in the first place. It is based on the expenditure needs of a county, not development needs that underpins Article 203 of the Constitution.

It would be illogical to allocate more money to a county that has a large network of bitumen roads on the pretext that it requires the funds to maintain them and deny a county that does not have any roads.

Agriculture is pegged to the number of households. What happens to pastoralists? And the fishermen? Or the many other counties with large informal settlements where households will be difficult to determine?

The expenditure needs focus premised on per capita spending, which senators from populous counties have pursued since the inception of devolution.

Equal per capita allocation of revenue to all counties is inimical to our national values, and to the principle of equitability that underpins devolution. The closeness of a public utility service such as a school, police station or health facility, for instance, will depend on the vastness of a county.

From Marsabit town to Illeret town, in that county, is nearly 600kms. Delivery of medicines to a health facility there would cost much more, irrespective of the population. Similarly, the status of the road would impact significantly on the cost of service delivery.

A county with large poverty index will require more resources to feed its population, whatever the size.

Senate should throw out that formula in its entirety and task CRA to develop one that meets the spirit of the Constitution and entrenches equity in our society. It stinks.


— The writer is former Senate Finance Committee Chairman

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