Senators will this week meet with Commission on Revenue Allocation (CRA) officials to resolve a row regarding the basis for revenue sharing among counties.
The lawmakers are also scheduled to discuss the retention of Sh15.9 billion equitable share for Nairobi City County in the national government for use by the newly-created Nairobi Metropolitan Services.
On February 25, Nairobi Governor Mike Sonko signed away four critical county functions to the national government in a ceremony presided over by President Uhuru Kenyatta at State House, Nairobi.
Sonko signed away health, transport, planning and development and public works and utility services dockets to the new entity.
Senate Speaker Kenneth Lusaka on Tuesday, May 12, informed the House that the committee on Finance and Budget has organized a half-day consultative retreat with the CRA to resolve contentious issues surrounding the revenue sharing plan.
The Jane Kiringai-led commission is mandated by law to recommend the basis for equitable sharing of revenues raised nationally between the national and the county governments, and among the county
“In compliance with the directive of the Chair, the Standing Committee on Finance and Budget, in collaboration with the Commission on Revenue Allocation, has organized a meeting for all Senators to discuss the proposed Third Basis for Revenue Sharing among County Governments,” said the Speaker, who invited all senators to the meeting.
“This event will take place on Thursday, May 24, 2020 at the Bomas of Kenya in Nairobi from 8:00 a.m.,” he added.
Last week, the House passed the Division of Revenue Bill 2020/2021 enabling shs339.8 billion to be allocated to counties.
The amount is made up of Equitable Share of shs316.5 billion as set out in the First Schedule to the Bill.
The second agenda to be deliberated is the conditional allocations from the national Government share of Revenue - Sh23.16 billion - as indicated in Schedule No.2 of the Bill.
Members will also discuss conditional allocations as loans and grants from development partners totaling to Sh30.2 billion as indicated in the Third Schedule.
However, the third generation revenue sharing formula which supposed to guide revenue sharing between counties for next years is yet to be finalized to date.
Under Article 217 of the Constitution requires that Parliament, by resolution of both Houses, adopts a new formula as submitted by Commission of Revenue Allocation (CRA).
“The House is aware that we have gone through that substantially, but because of the situation we are in today, we have not been able to finalise it,” Mandera Senator Mahamud Mohammed said as he moved the County Allocation of Revenue Act (CARA) for the second reading.
Article 218(b) of the Constitution requires that CARA to be introduced two months before the end of the financial year so that counties can do their budgets.
However, Article 217(7) of the Constitution provides that a basis that has been approved by Parliament shall be binding until a subsequent resolution is approved.
“For us as a Committee, we are of the view that the second generation formula can still be used because the other one has not been put in place,” Senator Mahamud, who is the chair of the Committee on Finance and budget.
“The process thus required under the third generation is very rigorous because the third generation introduces different parameters. In fact, the parameters are very elaborate and as good as they are, we have not been able to finalize It,” he added.
The Thursday meeting is part of a series of engagements that senators and various stakeholders will hold to elaborate so that we can finalise the third sharing formula.
The new formula for the 47 counties will be influenced less by the level of poverty and population of devolved units.
Politicians from marginalized counties including Governors and MPs have also been vocal in opposing the proposed resource-allocation formula, complaining that if adopted by the Senate, their region will lose Sh10 billion.
In the meantime, the committee has proposed as per Article 217 of the Constitution that the second generation sharing formula be utilized to disburse the county allocations as it had already been approved by Parliament.