President Uhuru Kenyatta dispatched his trusted allies for talks with ODM leader Raila Odinga to try crush resistance in the Senate against a proposed formula for allocating county funds.
A new formula by the Commission on Revenue Allocation (CRA) to guide division of national revenue among the 47 counties for the next five years has deadlocked in the Senate because it favours populous counties.
Expansive counties that benefited from the previous formula that placed a premium on land size are opposed to the new methodology because they stand to lose up to Sh20 billion, especially under further proposed changes by the Senate Committee on Finance and Budget.
Devolved units in the Coast, Lower Eastern, Maasai, northern and parts of western Kenya that are the biggest casualties of the CRA’s third basis for equitable sharing of revenue among county governments have put Raila in a dilemma because they form the largest of his perceived support base.
A vote on the new proposal in the Senate last week was scuttled after Raila’s allies teamed up with those of Deputy President William Ruto in a rare show of unity.
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Although Rift Valley counties will be some of the biggest winners in the proposed new arrangement, Ruto is keen to manage the backlash from losing regions that he is courting to shore up his presidential bid.
After the Senate deadlock, Raila is reported to have hosted Jubilee Secretary General Raphael Tuju, Jubilee Vice Chair David Murathe, Senate Minority Leader James Orengo and his National Assembly counterpart John Mbadi to a meeting on Thursday to try and hammer out a compromise.
Orengo is said to have argued against the new proposal, citing huge increments mostly for counties in the Rift Valley and central Kenya.
Insiders disclosed that the meeting focused on the pros and cons of the proposed formula, even as the leaders agreed that a report by the Senate Committee on Finance and Budget had some shortcomings.
Those in attendance said there were discrepancies in figures produced by the committee led by Kirinyaga Senator Charles Kibiru.
Raila is reported to have backed a position held by Orengo to pass the proposed formula with amendments that will mitigate the impact of losses to the affected counties.
The Siaya senator yesterday reportedly convened a meeting of senators from Nyanza to discuss the matter.
Tuju also admitted that they were engaging Raila and the senators to reach a consensus that will result in a win-win situation.
“Our proceedings are to get consensus. The attitude is the same as that which informed the handshake between the President and Raila. These counties belong to all of us,” Tuju said yesterday.
The Standard on Sunday has, however, reliably established that 27 senators have vowed to reject the new formula that has the support of 20 of their colleagues. They swore to defy Uhuru and Raila even if they lobbied them to pass it.
A top Jubilee leader said they faced an uphill task after the President directed them to ensure the formula is approved. This after he ruled out a possibility of extending the one that had lapsed.
The President has reportedly tasked Deputy Chief of Staff Njee Muturi to reach out to the disgruntled senators and clinch a deal before Tuesday.
Mr Muturi did not respond to our inquiries yesterday.
A Nasa senator warned that Uhuru and Raila would be embarrassed in the House on Tuesday.
“If they try to force through the formula, it will be their end. They have no numbers. Rebellion begins next week. We have 27 senators against the formula. The committee formula has no chance on the floor,” said the senator who declined to be named.
Narok Senator Ledama Olekina (ODM) said that money matters had nothing to do with toeing the party line and vowed to reject the contentious formula.
“They cannot whip me. County revenue sharing has nothing to do with being whipped. I cannot support a formula for the sake of the leadership only for my county to suffer,” said Mr Olekina, whose county stands to lose Sh970 million.
He continued: “I will not support a formula that divides the country. Article 203 of the Constitution is very clear on the equal sharing of revenue raised nationally among the two levels of government.”
The senator instead urged the government to increase allocation to counties to over Sh400 billion instead of the current Sh316.5 billion because of the rise in population numbers, or allow the status quo to remain.
A Jubilee senator said Raila holds the key to unlock the deadlock ahead of Tuesday’s crucial vote. “If he says yes, it’s a done deal.”
The new methodology is expected to be used for sharing of revenue for the financial years 2020/21 to 2023/24.
The framework links revenue sharing to devolved functions using three components, namely; service delivery, balanced development and, incentive.
In aggregate, the framework allocates 65 per cent of the revenue for enhancing delivery of public services, 31 per cent for promotion of balanced development, and four per cent as incentive for revenue collection and fiscal prudence.
The proposed approach is to set aside 15 per cent of the equitable share increment to cushion counties that would see a reduction in their equitable share in a quantum in excess of five per cent.
Senate Majority Whip Irungu Kang’ata yesterday said the leadership was doing its best to unlock the stalemate.
“There had been progress on the issue. We started with a proposal that did not have a cushioning mechanism. The one on the table has a one-year cushioning mechanism where no county will lose money,” Mr Kang’ata said.
He disclosed that the House has three options put on the table by senators Olekina, Paul Githiomi (Nyandarua) and Ali Abdullahi (Wajir).
“Every senator has been urged to give his proposal. We have engaged various leaders, including NASA and Jubilee leaders, on the same and we are building censuses,” said Kang’ata.
Kiambu Senator Kimani Wamatangi urged colleagues to divorce politics from revenue allocation and allow institutions to do their work.
“The CRA has given its proposals. Let Senate come up with recommendations for the third generation formula factoring in new data in the 2019 population census. Anything short of this will be flouting the law on the floor of the House,” he warned.
Mr Wamatangi said the only way forward is to use current data to allocate funds based on per capita income, population, roads and urban services.
He questioned why counties didn’t complain when they adopted the second generation formula, which occasioned loss of funds to 17 counties with Turkana being the biggest loser.
“In 2016, Turkana lost Sh2 billion and Mandera Sh900 million. Why didn’t we reject the formula? If we are to retain this formula, the data must be current.”
When it comes to per capita, Wamatangi added, the 20 affected counties get over Sh10,000 per person while Kiambu gets Sh3,300.
Tharaka Nithi Senator Kithure Kindiki, who is at the forefront of opposing the formula, said the Tuesday vote will be by “those for Kenya and those against Kenya.”
“We must defend devolution by ensuring equity. This is beyond party positions. It is about protecting devolution as stipulated in law. We will oppose it,” said Prof Kindiki.
He added: “No amount of whipping will change the people’s will. Adopting this formula is accepting Sessional Paper No. 10 of 1965 and distributing wealth to already wealthy areas.”
Elgeyo Marakwet Senator Kipchumba Murkomen said he would support a bi-partisan process that resulted in an equitable formula, and which protected the interests of the majority without unfairly disfranchising the minority and those who have been historically marginalised.
“We need to have honest, nationalistic and an all-inclusive conversation among the stakeholders,” said Murkomen.
Embu Senator Njeru Ndwiga rallied behind the formula, saying he would vote for it Tuesday. “We need to have a formula even if its implementation will be delayed.”
He continued: “If we don’t have that and the current formula has expired, it will be complicated. There is no way we can afford to delay the vote. If we reject it, some counties will be disfranchised and others have been for a long time.”
He argued that the counties set to lose about Sh20 billion have been getting the funds unfairly at the expense of other devolved regions.
“The allocation was largely pegged on land area while devolution is about service delivery. We must focus and talk about the people and not land.
“We must ensure something is done right. We cannot continue doing the wrong things just because we did it wrong from the beginning,” said Ndwiga.
He urged the government to increase allocations to the affected counties to mitigate the looming losses.
Reached for comment on the stalemate, National Treasury Cabinet Secretary Ukur Yatani said: “We shall wait. A decision will have to be made one way or the other.”
Laikipia County Senator John Kinyua said any gain would be good. “We are getting an additional Sh580 million and therefore I don’t need to be whipped to support the formula. They will be preaching to the converted.”
Kinyua said he was a proponent of ‘one man, one vote, one shilling’. “Services are to the people. If we are talking about agriculture, health, roads and others, they are services for the people. I can’t wait to pass the formula.”