NAIROBI, Kenya, Nov 20 — Lawmarkers have reached an agreement on the revenue allocation for devolved units proposing Sh 387 billion for the Financial Year 2024/2025.
A Mediation Committee of the National Assembly and the Senate co-chaired by Kiharu MP Ndindi Nyoro and Senator Ali Roba (Mandera) increased the allocation by Sh2 billion compared to the previous Financial Year citing harsh economic times.
“We are facing reality as it is without sugarcoating.As much as we have willingness in terms if giving counties more funds. We have scarcity in terms of revenue shortfall,” the joint committee said.
“Out of our deliberation,the hard negotiations and zooming in on data,we have reinstated the last financial year allocation at Sh385 billion and added an additional Sh2 billion to make it Sh387 billion,” said Nyoro.
National Assembly had passed the Division of Revenue Bill 2024, approving a revenue share of Sh380 billion, aligning with the National Treasury’s proposal after the withdrawal of the Finance Bill 2024.
However, senators had remained firm, demanding the revenue allocation to counties be raised to Sh400 billion, arguing that counties cannot operate effectively with projected shortfalls.
The stalemate forced the constitution of a joint committee to mediate on the matter.
The next hurdle for legislators in both houses is to push for the disbursement of Sh387 billion to counties will require MPs to marshal two-third of both houses to amend the Division of Revenue Bill 2024.
Senate will also require more than forty-five senators to amend the County Allocation Revenue Bill which allocates revenue from the national government to county governments with the changes.
For a rejected bill to be rescued, Parliament must secure a two-thirds majority to override the President’s memorandum, which has not happened since 2010.
“The amending of Division of Revenue Bill will give rise to the greenlight for us to be able to start process County Allocation Revenue Bill which requires goodwill since it requires 2/3 majority in both houses,” Roba noted.
In his memorandum to the Senate, President Ruto cited the withdrawal of the Finance Bill 2024 which he argued had necessitated a government-wide revision of budget allocations.
“NOW THEREFORE, in exercise of the powers conferred on me by Article 115 (1) (b) of the Constitution, I decline to assent to the County Allocation of Revenue Bill, 2024, and refer the Bill for reconsideration by the Senate with the recommendations,” the President’s memo stated.
Heated debate
A heated debate ensued before the legislators reached a consensus on the matter, with Senators raising issues with National Treasury Cabinet Secretary John Mbadi’s adamant stand that the exchequer will only release Sh380 billion to counties.
“Then what is the role of Parliament. We should dissolve Parliament, let Mbadi make all the decisions on the monies to be disbursed,” Nairobi Senator Edwin Sifuna remarked.
MP Nyoro, who co-chairs the committee, insisted that the Executive had a primary role in the budget-making process, alluding that the final consensus on the matter requires keen consideration of the President’s input.
“It’s good to be practical even as we make budgets. The ultimate bearer of the vision of the country is the President,” Nyoro said.
Senator Sifuna challenged the assertion.
“I cannot accept the position that we are going to negotiate the Division of Revenue at State House, that is not going to happen,” he quipped.
Funyula MP Wilberforce Oundo had opposed additional allocation to the counties from the Sh 380 Billion arguing that the taxman revenue performance had dipped over the years and any additional budget will portend a crisis.
“This country has a problem of overbudgeting and being over-ambitious. Lets be realistic, own source revenue in counties is performing very well. National Revenue has continually underperformed and there’s no miracle that will happen to change that,” Oundo noted.
Soi MP David Kiplagat opined that counties will fill the gaps on any revenue shortfalls through their own source revenue which he argued had been steadily increasing over the years.
“The counties will not suffer given that they have their own source revenues which increased last year and so if they continue with the trajectory that will be good and they will not suffer with the Sh 20 Billion slash,” the Soi MP remarked.
Migori Senator Eddy Oketch dismissed arguments that revenue allocations gaps will be filled through own-source revenues saying it is unconstitutional based on the constitutional requirement on revenue allocation.
“Lets not bring the issue of own source revenue because that argument is unconstitutional. Equitable share principle mandates that national government gets 75 percent while counties get 15 percent of the total budget,” Oketch said.
Mombasa Senator Mohammed Faki raised concerns with national government allocating billions on projects whose functions are domiciled in the counties.
“Why do we have billions in the national government to undertake development in devolved functions including housing and health?” Faki posed.
Source: capitalfm
