Senators want counties to receive Sh465 billion as equitable share of revenue in the new financial year, setting the stage for another battle with the national government.
The National Treasury, in the 2025 Budget Policy Statement, proposed that counties get Sh405.1 billion as equitable share for the fiscal year ending June 30, 2026.
Senators have, however, rejected the proposal, saying the allocation represents a marginal increase from the current allocation of Sh387.4 billion.
Before settling on the Sh387.4 billion allocation, there was an impasse for more than two months, with senators and MPs reading from different scripts. The MPs approved Sh380 billion as opposed to the earlier Sh400.1 billion.
A similar situation is brewing as senators side with governors in demanding for more funds for counties.
The Council of Governors (CoG) had earlier said it will not settle for anything less than Sh547 billion as counties’ equitable share of revenue in the new financial year.
Finance and Budget Committee chairperson Ali Roba said Sh465 billion should go to the devolved units, saying the recommendation took into account the non-discretionary expenditure from the national government priorities expected to be implemented by the counties. He said the projects amount to an extra Sh34.9 billion.
Senate Finance and Budget Committee Chairperson Ali Roba.
Photo credit: Bonface Bogita | Nation Media Group
Mr Roba explained that the counties are set to incur expenditure of Sh4.1 billion for housing levy, Sh6 billion for the enhanced contributions to the National Social Security Fund, matching allocations for aggregation industrial parks amounting to Sh11.8 billion and matching allocation for community health promoters amounting to Sh3.23 billion.
This is in addition to Sh6.3 billion to cover annual wage increment in the Integrated Personnel and Payroll Database (IPPD) system and basic salary increment as per the doctor’s collective bargaining agreement of Sh3.5 billion.
The report said that it was also expected that the sharing of equitable revenue among counties in the new fiscal year would be based on the proposed fourth basis of revenue sharing. However, this was not possible due to controversies that crowded the third basis of revenue sharing. Based on this, Mr Roba said, the committee proposed Sh14 billion to cushion all counties from the transitional effects.
“All these add up to Sh465 billion and hence the committee recommends the House adopts this county equitable share for the Financial Year 2025/2026,” states the report.
He said that ordinary revenue is projected to grow by Sh259 billion yet despite the increase, devolved units will only get a marginal increase of Sh17.7 billion.
This, the Mandera senator said, will only serve to limit the abilities of counties to adequately finance devolved functions.
“Further, the National Treasury did not provide the criteria used to arrive at the proposed allocation of Sh405.1 billion,” he said.
Mr Roba added that during the Covid-19 pandemic, shareable revenue stagnated for two financial years, remaining at Sh370 billion, only to marginally increase to Sh385 billion and the current Sh387.7 billion. This, he said, means that county governments for almost five years have not realised substantive revenue increase, while the revenues of the national government have continuously performed well.
Kakamega Senator Boni Khalwale accused the national government of holding onto at least Sh29.7 billion that is supposed to go to counties. He said the programmes and projects the funds are going to are county functions.
Kakamega Senator Boni Khalwale.
Photo credit: Dennis Onsongo | Nation Media Group
“If that money had been allowed to go to county governments, the shareable revenue would have risen from Sh387 billion that we have given counties to Sh419 billion. This is a crime scene,” said the Senate Majority Whip.
Nominated Senator Mariam Omar observed that the Sh29 billion budgeted under the Ministry of Health is for projects which are supposed to be done by counties.
