Counties set for Sh16.2bn revenue raise in new budget proposal by National Treasury
National Treasury CS Prof Njuguna Ndung’u.
Counties will get an additional Sh16.2 billion in equitable revenue share in the financial year 2024/25 should proposals by the National Treasury be approved.
The Treasury has proposed to allocate Sh401.6 billion to the devolved units in the next budget, which will be the second under President William Ruto.
If approved by Parliament, it will be an increase of 4.2 per cent from the Sh385.4 billion that the 47 counties were allocated in the current financial year, according to the draft 2024 Budget Policy Statement.
“Based on an ordinary revenue projection of Sh2,958.6 billion in the financial year 2024/25, it is proposed that Sh2,539.4 billion be allocated to the national government, Sh401.6 billion to county governments as equitable revenue share and Sh17.6 billion to the Equalization Fund,” the National Treasury said.
The allocation is marginally higher than the Sh396.05 billion that the Commission on Revenue Allocation (CRA) had earlier this month proposed for disbursement to the devolved units.
The Treasury said that the allocation has been informed by the need for “continuous rationalisation of expenditures by eliminating non-core expenditures”.
It said the national government is single-handedly bearing the shortfalls in revenue in any given financial year yet counties continue to receive their full allocation despite the budget cuts affecting national government entities.
“The proposal to increase the equitable share to Sh401.6 billion in the financial year 2024/25 is equivalent to 25.5 per cent of the last audited accounts of Sh1,573.42 billion for the financial year 2019/20 and as approved by Parliament,” said the Treasury.
Last week, CRA met with the representatives of the 47 counties where they asked the commission to raise their budget ceilings.
They argued that the ceilings have stagnated despite the rising cost of goods and services, and by extension, cost of living.
The Treasury has proposed to further allocate Sh58.242 billion as additional allocations (conditional and unconditional) during the fiscal year.
Loans and grants
Out of this allocation, some Sh11.486 billion will be financed from the national government's share of revenue and Sh46.756 billion as additional allocations from proceeds of loans and grants from development partners.
“In the spirit of devolution, the national government is committed to fully devolving functions that it has historically performed since devolution and which are county government functions such as the library services,” it added.
The 2024/25 budget proposals come even as the devolved units continue to struggle to meet their own-source revenue targets since the advent of devolution.
Only four of the 47 counties —Baringo, Homa Bay, Kitui and Lamu — achieved their own-source revenue targets in the financial year ended June 2023, according to Treasury data.
