Counties stick to their guns in revenue share stalemate
Council of Governors vice-chairperson Ahmed Abdullahi (second left) addresses journalists while flanked by Kakamega Governor Fernandes Barasa (left), Nyeri’s Mutahi Kahiga (second right) and Makueni’s Mutula Kilonzo Jnr at Movenpick Hotel and Residences in Nairobi on February 1, 2023.
Governors have stuck to their guns, demanding Sh425 billion from the National Treasury in the equitable share of revenue and raising the stakes in the stalemate ahead of a scheduled meeting with President William Ruto.
This is the second time the Council of Governors (CoG) is rejecting a Sh380 billion allocation to counties by the Treasury for the 2023/2024 financial year.
An Intergovernmental Budget and Economic Council (IBEC) meeting chaired by Deputy President Rigathi Gachagua last week also failed to resolve the deadlock. The Commission on Revenue Allocation (CRA) proposed that the shareable revenue be pegged at Sh407 billion.
Speaking yesterday after another meeting with Treasury and CRA, Ibec vice-chair Ahmed Abdullahi complained that the proposed Sh380 billion is not equitable.
He explained that the shareable revenue is projected to increase by Sh374 billion for the period under review yet the Exchequer is only allocating counties a paltry Sh10 billion, representing 2.67 per cent, while the national government is walking away with Sh364 billion.
Devolved functions
The Wajir Governor said Treasury has made considerable increments in the share of the revenue for functions that have been largely devolved, including health and agriculture, whose allocations have risen by Sh25.8 billion and Sh15.7 billion respectively.
Further, he observed that the Exchequer has failed to explain to them the basis of their deviation from the recommendation by CRA as well as failed to build consensus on the issue.
The stalemate started last December when CoG also rejected CRA’s proposal, holding out for Sh425 billion. In its latest proposal, CRA argues that Sh407 billion translates to a 23.5 per cent increment of the most recent audited and approved accounts for the financial year ending June 2020, which amounts to Sh1.73 trillion.
According to CRA, the shareable revenue is projected to increase by 17 per cent from Sh2.192 trillion in the financial year ending June 2023 to Sh2.56 trillion in the coming financial year. Governors are, however, insisting on an increase of 15 per cent (Sh55 billion) of the projected revenue growth.
