Kenya: Numbers Fail to Add Up in Counties Cash Allocation

20 January 2021

Counties should not expect any new money even after the national cake allocator proposed that they receive Sh370 billion in equitable share for the next financial year.

In its proposal, the Commission on Revenue Allocation (CRA) has renamed kitties that devolved units have been receiving all along, as it struggled to deliver on President Kenyatta's pledge to give the 47 regional outfits over Sh50 billion more.

Mr Kenyatta had last year promised to allocate an additional Sh53 billion to counties in the 2021/22 financial year as part of the deal to end the stalemate that gripped the nation during the debate on the third basis of revenue sharing formula.

However, the proposal the commission published yesterday show no "new money" will be going to counties and that the Sh370 billion had been achieved through re-budgeting of the funds that have already been going to the counties for the last seven years of devolution.

Shoot down CRA proposal

The move is likely to cause a rumpus in the Senate when it returns from recess, with some lawmakers already threatening to shoot down the CRA proposal Tuesday.

Counties received a total of Sh339.8 billion from the national government this financial year.

This comprised Sh316.5 billion in equitable share, Sh13.7 billion national government grants and Sh9.4 billion road maintenance levy.

They also received an additional Sh30.2 billion in grants and loans from multi-lateral lenders.

CRA chairperson Jane Kiringai confirmed to the Nation that the proposed Sh370 billion does not include "new money", and that the commission had achieved the additional Sh53 billion through re-budgeting of some of the funds that counties have traditionally received from the centre.

No additional funds

"We have no new money to allocate to counties," Dr Kiringai said, adding that effects of the Covid-19 pandemic and the depressed revenue collections have made it difficult to get additional funds for counties.

"We had to innovate because getting the additional Sh50 billion to share was a problem in the circumstances."

The National Treasury had projected to collect Sh2.1 trillion, but the effects of the pandemic have seen the figure scaled down to Sh1.81 trillion for the 2021/22 fiscal year.

Shared equally

To achieve the Sh370 billion, CRA proposes that Sh316.5 billion be used as the baseline equitable share allocation, meaning the funds will be shared equally among all the 47 counties.

Counties have received the same Sh316.5 billion as equitable share in the last two financial years.

The commission has also re-budgeted and converted the conditional grant to equitable share.

Conditional allocations cater for the leasing of medical equipment (Sh6.2 billion), level five hospitals (Sh4.3 billion), youth polytechnics (Sh2 billion), and county headquarters (Sh300 million).

In the next financial year, the national government has proposed to allocate Sh17.02 billion in conditional grants for selected counties to implement social projects.

However, according to Dr Kiringai, the commission had made a decision that the funds be disbursed to all the counties to improve social amenities.

This means that the Sh17.02 billion will now be shared equally among all the 47 counties based on the third basis formula that was adopted last year.

The commission also wants Sh36.5 billion transferred to counties from national government's ministries, departments and agencies for the performance of concurrent functions in the areas of health, crop development, livestock, fisheries, water, irrigation and sanitation.

Council of Governors Chairman Wycliffe Oparanya was not immediately available for comment, but Laikipia's Ndiritu Muriithi said his expectation was that the Sh50 billion is new money.

Drop county functions

He supported the proposal that the national government entities drop all county functions, noting that the devolved units have come of age and have the capacity to deliver on each and every devolved function.

While Senate Minority Whip Mutula Kilonzo Junior welcomed the Sh370 billion as a great achievement for devolution, a senator allied to Mr Kenyatta, and who did not want to be named fearing victimisation, said CRA's proposal was "below expectation".

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