County's hopes of share of Mombasa port revenues dashed
The Port of Mombasa on March 28, 2023.
What you need to know:
- Prof Ndung’u said there is no provision in the Constitution of Kenya to share revenue accrued from national assets.
- Mombasa County in its plans intends to collect more than Sh6.1 billion own source revenue this year.
Mombasa County government's hopes of getting a share of Mombasa port revenues have been dashed by National Treasury Cabinet Secretary Njuguna Ndung'u, who said such a move would be against the law.
Prof Ndung'u said this week that there is no provision in the Constitution of Kenya to share with devolved entities revenue accruing from national assets, and that will remain the case until the law is amended.
"All ports are national assets and there are regulations and rules that have been passed by Parliament in terms of revenue sharing so we cannot fight about it. There are guidelines in the law. So it’s not a negotiation, it’s a matter of what the law says. It defines nation resources, it defines county resources, and... all ports belong to the national government,” said Prof Ndung’u.
The announcement this week during the launch of the Kenya Revenue Authority's online auction has dashed Mombasa County's dreams of getting a share of at least Sh55 billion collected annually, contrary to President William Ruto's promise to the devolved unit during his tour in late July.
During a stakeholders' meeting, he chaired at the Kenya Ports Authority, President Ruto directed the Transport Ministry and KPA to work with the county to operationalise the idea.
"In my opinion, Mombasa is entitled to a share of the funds we generate from the port," the President said.
The President's directive followed an impassioned appeal by Mombasa Governor Abdullswamad Sherrif Nassir, who said local governments around the world manage their ports and other services related to domestic infrastructure and urban planning.
"The Constitution of Kenya envisioned local governments retaining a share of the revenue from assets domiciled within their borders," Nassir said to cheers from local leaders.
However, the county government has taken a different approach to getting KPA to support the county, introducing a legal framework that would see Mombasa benefit as the host county for the region’s largest port.
“We have a Bill at the County Assembly on Port Users Levy Bill which will allow the county to levy on a number of services to offer to the Mombasa Port to achieve our own source revenue target,” said Mr Nassir.
The Commission on Revenue Allocation (CRA) Commissioner, Hadija Juma, concurred with Mr Nassir, saying counties should take measures to enhance their own source revenue collection by coming up with laws on devolved duties to earn from assets within their territories.
Commissioner Juma said the CRA has embarked on a process to prepare a fourth revenue sharing formula between the national and county governments covering the 2025/2026 and 2029/2030 financial years.
“The Commission is open to a harmonious engagement with all counties for the benefit of service provision to the citizens. We are always available to provide any technical assistance to the counties on public finance management matters, as and when required,” she said.
Already, the National Treasury, Parliamentary Budget Office, Office of the Auditor-General and the CRA are working to resolve the issue of classification of ordinary revenue under the CRA Act to end the financial crisis in counties.
Mombasa County is targeting more than Sh6.1 billion in own source revenue this year after automating most of its revenue collection departments and expanding its revenue streams.
