Nairobi, Turkana, Kilifi, Nakuru and Kakamega will receive the lion’s share of the Sh316.5 billion allocated to counties as the equitable shareable revenue in the 2019/20 financial year.
However, each county has received little or the same figure it earned in the last financial year, a result of the protracted war between the two houses of Parliament on the exact figure due to counties.
County Allocation of Revenue Bill, 2019, which the Senate passed on Tuesday, states that Nairobi will get Sh15.7 billion, which is Sh200 million less than it received in the 2018/19 financial year.
Turkana will get Sh10.5 billion, which is less than the Sh10.7 billion it received in the last financial year, while Kilifi will receive Sh400 million less, from Sh10.8 billion in 2018/19 to Sh10.4 billion this year.
Nakuru appears to be the greatest beneficiary as it will get an extra Sh1 billion, up from its Sh9.4 billion in the last financial year.
The bill proposes to allocate a total of Sh378.3 billion to counties in the 2019/20 financial year – Sh316.5 billion in the equitable share, Sh22.8 billion in conditional allocations and Sh39 billion from development partners.
The proposal for additional conditional allocations from the national government share of revenue raised nationally is in line with Article 202 (2) of the Constitution.
Article 202 (2) provides that county governments may be given additional allocations from the national government’s share of revenue, rather conditionally or unconditionally.
A conditional allocation of Sh4.3 billion will be shared among the counties for level five hospitals for compensation them for costs incurred in rendering specialised health care services to neighbouring counties.
Yet another of Sh900 million will be used to compensate county governments for revenue foregone by not charging user fees in county health facilities.
Counties will also share Sh2 billion and use it to equip technical and vocational centres and capitation of students. This allocation is aimed at enhancing access to quality and relevant vocational skills training.
Five counties, Tharaka Nithi, Tana River, Nyandarua, Lamu and Isiolo will benefit, once the bill is approved, from a Sh485 million conditional grant to help them construct their county headquarters.
The five did not inherit county headquarters so the national government stepped in through a three-year assistance plan that began in the 2017/18 financial year.
Another additional conditional allocation due to counties is the Sh8.98 fuel levy which is meant to enhance and sustain their capacity to maintain roads.
Other conditional grants are the Sh2.99 billion for the World Bank project for transforming systems for the universal healthcare project, Sh7.2 billion for the National Agricultural and Rural Inclusive Growth Project by the World Bank and the the Sh11.5 billion Kenya Urban support Programme – Urban Development Grant.
Other items in this category are the Urban Infrastructure Grant Allocation (Sh396 million), Kenya devolution Support Programme (Sh6.3 billion), the EU Instruments for Devolution Advice and Support (Sh492.7 million) and IDA – Water and Sanitation Development Project (Sh3.5 billion).
While the bill contains the Sh6.2 billion as conditional grant for the controversial Managed Equipment Services, the funds remain in abeyance as the Senate struck off the grant and channelled the funds to the equitable share.
Nairobi will get an additional Sh880 million in conditional grants while Turkana will receive an additional Sh1.39 billion and Nakuru Sh2.4 billion. Kilifi will receive an extraSh2 billion in conditional grants.
Kakamega’s equitable share is Sh11 billion with another Sh1.6 billion in conditional grants while Mandera’s equitable share is Sh10.8 billion with Sh1 billion in the conditional allocation.
The other allocations, in that order, are Kiambu – Sh9.4 billion and Sh3.4 billion, Bungoma – Sh9.4 billion and Sh1.3 billion, Kitui – Sh8.8 billion and Sh1.2 billion, and Wajir Sh8.5 billion and Sh1.1 billion in conditional grants.
At the tail end are Lamu, which will receive the lowest share – Sh2.5 billion and Sh676 million, Elgeyo Mrakwet Sh3.8 billion and Sh634 million, Tharaka Nithi – Sh3.9 billion and Sh615 million.
The others are Laikipia – Sh4.1 billion and Sh597 million), Isiolo – Sh4.2 billon and Sh790 million, Taita Taveta – Sh4.5 billion and Sh1 billion, Kirinyaga – Sh4.2 billion and Sh819 million, Embu -Sh4.3 billion and Sh1.1 billion, and Samburu -Sh4.6 billion and Sh821 million.
Even though the proposed third generation formula was finally tabled in the Senate alongside the bill, the allocation of the 2019/20 revenue is based on the second generation formula which takes into account disparities among counties.
The dispute at Parliament resulted from the National Treasury’s allocation of Sh310 billion to counties, down from the Sh314 billion they received in financial year 2018/19.
The Commission on Revenue Allocation (CRA), mandated by the Constitution to determine the shareable revenue between the two levels of government, had proposed that the counties’ equitable share be pegged at Sh335 billion for the 2019/20 financial year.
The CRA has dismissed the Sh316 billion as equitable share arguing it has no basis in law.
The commission has noted the reduction from the Sh314 billion approved in Division of Revenue Act, 2018 and that the National Treasury’s economic projections show ordinary revenues will grow by 13 per cent in the 2019/20 financial year, leaving no reason for the reduction in counties’ equitable share.
It also argues that this allocation has not considered the proposed equitable share reduction from Sh314 billion to Sh310 billion.
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