NAIROBI, Kenya, Mar 8 – The contention over equitable sharing of resources between the national and county governments emerged yet again at the Sixth Devolution Conference in Kirinyaga which ended Thursday.
The two levels of government urged National Assembly to move an amendment to Article 203 (3) of the Constitution within a year to facilitate timely approval of audited accounts.
“The Article shall in not more than one year be amended to ensure timely approval of audited accounts,” a joint communiqué read by Council of Governors (CoG) Deputy Chairperson Mwangi wa Iria.
The Article whose amendment only requires parliamentary input has been at the centre of contention between the national and county governments, the Article stipulating that equitable share of revenue generated nationally shall be calculated on the basis of the most recent audited accounts.
“(2) For every financial year, the equitable share of the revenue raised nationally that is allocated to county governments shall be not less than fifteen per cent of all revenue collected by the national government. (3) The amount referred to in clause (2) shall be calculated on the basis of the most recent audited accounts of revenue received, as approved by the National Assembly,” Articles 203 (2) and (3) provide.
The County Allocation Revenue Bill (2019) for instance proposes a Sh 371 billion allocation to counties, this equivalent to thirty-six per cent of Sh 1 trillion 2014/15 Financial Year audited revenues, being the most recent accounts approved by the National Assembly.
Counties have for sixth successive year raised concern with the formula saying it continued stifle their financial operations.
Although the Sh 371 billion allocation surpasses the fifteen per cent threshold set under Article 203 (2), counties have been agitating for more funding through the approval of most recent audited accounts by the National Assembly.
Allocations to individual are considered on the basis of a six-point formula by the Commission for Revenue Allocation.
The formula takes into consideration population density per county, equal share for all counties, poverty index, land area, fiscal efforts to collect own revenue, and development efforts made by each county.
Revenue Allocation Formula
CAi = 0.45PNi + 0.26ESi + 0.18PIi + 0.08LAi + 0.02FEi + 0.01DFi
CA=Revenue allocated to county
i= County: 1,,2………47.
PNi=Revenue allocated to a county on the basis of Population Factor.
ESi= Revenue allocated to a county on the basis of Equal Share factor. This is shared equally among the 47 counties.
PIi= Revenue allocated to a county on the basis of Poverty Factor.
LAi= Revenue allocated to a county on the basis of Land Area Factor.
FEi= Revenue allocated to a given county on the basis of Fiscal Effort.
DFi= Revenue allocated to a given county on the basis of Development Factor.
In a bid to foster economic development in counties, the sixth devolution conference achieved a consensus to fast-track the development of a policy on regional economic blocs within a year.
Also part of resolutions numbering twenty-three contained in the joint communique drafted by both levels of government at the end of the devolution conference in Kirinyaga is a commitment to adopt civic education laws and units in line with the County Government Act.
The two levels of government also agreed to work on harmonization of revenue collection structures within a year to address concerns of double taxation.
The sixth devolution conference also agreed to have the County Statistics Bill enacted within six months.
“The Kenya National Bureau of Statistics shall enhance their collaboration with both levels of government to produce data and statistics and Parliament shall in six months fast track the consideration and passing of the County Statistics Bill,” Wa Iria.
The 2016 Bill sponsored by Samburu West lawmaker Naisula Lesuda sailed through the third reading in November 2016 and has since been due for consideration by a committee of the whole House.
County chiefs also agreed to constitute County Service Delivery Units akin to the Presidential Delivery Unit to enhance service delivery in a bid to monitor implementation of development programs.