Kenya: What Sonko, State House Transfer Deal States

26 February 2020

Last evening, State House and the Nairobi City County government, through Governor Mike Sonko, brokered a deal that will see the national government take over some key functions from the devolved unit.

In a deal State House characterised as a milestone, City Hall surrendered county health services, transport, planning and development and public works and utilities to the State.

The four services will now be delivered by the national government under the guidance of Cabinet Secretary for Devolution Eugene Wamalwa.

But what are the specific contents of Transfer Deed?

We will break down some of the key elements of the deal.

HOW LONG WILL IT LAST?

The question on many people's minds is whether Nairobi's functions will be managed by the State forever. According to the notice issued detailing the agreement, no it will not.

The deal will become effective on March 15, which is 21 days from the date of execution.

It will then remain in force for a period of 24 months, after which the parties may choose to extend it.

This effectively places the four functions of the city county government under control of the national government for two years until February 25, 2022, just a few months shy of the next General Elections.

HOW ABOUT FUNDING?

According to the deal, delivery of the transferred functions shall be financed from either the Consolidated Fund or County Revenue Fund, or both.

The deed says that Nairobi City County Government is obligated to fully fund the transferred functions from the county revenue kitty.

Further, the deed states that the national government will determine the level of funding for each transferred functions in consultation with the county government.

During this period, the budgetary allocation for these functions shall not be less than the amount appropriated by the County Assembly in the preceding financial year.

ROLE OF KRA

Interestingly, the national government will also take over the responsibility of collection and remittance of all revenue accruing from the transferred functions.

To effectively coordinate revenue collection, Nairobi County appointed Kenya Revenue Authority (KRA) as the principal agent for overall revenue collection.

Nairobi County is required by the deed to second to the national government human resources necessary for the implementation of this agreement, a process that will be facilitated through consultation between Nairobi County Public Service Board and the Public Service Commission (PSC).

HOW WILL PERFORMANCE BE MONITORED?

Assessment and monitoring of the agreement is a major component in the deed. The parties are expected to harmonise the relevant sector performance contracts and service delivery indicators.

Every year, a report detailing progress of the implementation of the deal will be tabled in Parliament and at the Nairobi City County Assembly.

To achieve better performance of the agreement, Nairobi County and the national government may form joint committees, in keeping with provisions of Article 189(2) of the Constitution.

Additionally, the parties may enter into sector specific service-level agreements or Memoranda of Understanding (MoU) to guide service delivery.

DISPUTE RESOLUTION

In the event of a dispute between the parties, the deed requires the parties to first seek resolution in an amicable fashion through negotiations.

Should they fail to reach an agreement within 30 days from the date either party writes to the other, the parties shall escalate the matter to the National and County Governments Coordinating Summit.

Before its implementation, the deed will be presented to Nairobi City County Assembly for review even as members of the public give their views.

Any amendments, modifications and additions to the deed can only be conducted by "a written instrument" duly executed by or on behalf of each party.

This deal can only be terminated by the mutual written consent of both parties expressed in a common document.

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