Sh42.8bn Equalisation Fund now in your hands, MPs told 

The Commission on Revenue Allocation (CRA) has asked Parliament to fast-track the County Governments Additional Allocations Bill, 2022 to unlock the release of Sh42.8 billion Equalisation Fund due to devolved units.

CRA said since the inception of the Fund in the financial year ending June 30, 2012, a total of Sh55.28 billion has been due to the kitty.

However, only Sh12.4 billion – being allocations under the first policy – has been appropriated to 14 counties defined as marginalised.

The 14 counties are Isiolo, Taita-Taveta, Kilifi, Garissa, Turkana, Lamu, Mandera, Wajir, Marsabit, Samburu, West Pokot, Tana River, Kwale and Narok.

The balance of Sh42.88 billion is yet to be appropriated to beneficiary counties since the financial year ending June 30, 2014, when Parliament first allocated monies through the various Division of Revenue Acts.

The Bill, currently before the Senate, allocates only Sh13.48 billion, leaving a balance of Sh29.4 billion that is due to the counties.

The re-introduced Bill was first brought before the 12th Parliament but the life of the August House lapsed before it could be passed and signed into law by the President.

Amend law

In order for the county governments to benefit from the entire amount, CRA chairperson Jane Kiringai called on senators to consider amending section 2 of the Bill to expand it to include the Equalisation Fund.

She said the section should be interpreted to mean additional resources including money allocated from the Equalisation Fund, other monies from the national government’s shareable revenue, and loans and grants from development partners.

“Parliament should fast-track allocation of this balance to beneficiary counties to hasten development,” said Ms Kiringai while appearing before the Senate Committee on Budget and Finance.

The Fund came into force following the promulgation of the 2010 Constitution, with a lifespan of 20 years, and is meant to benefit counties that have suffered decades of marginalisation.

However, some senators appear to be leaning towards drafting a standalone Bill to provide a framework for the release of the funds.

The legislators separated the Equalisation Fund allocation from the County Governments Additional Allocations Bill (CGAAB), 2022.

The senators want the National Treasury to draft an Equalisation Fund Bill to release the outstanding funds.

In the current financial year ending June 30, 2023, some Sh13.18 billion has been allocated to the Equalisation Fund through CGAAB.

“The Treasury will prepare the Bill in conformity with the regulations that were passed by the Senate in relation to Equalisation Fund,” said Senator Maureen Mutinda, the committee’s vice chairperson.

At the same time, Ms Kiringai raised concern that the Sh12.4 billion released to the marginalised counties has never been utilised for development activities due to a lack of committees at the county level to identify and prioritise projects.

Consequently, she urged the Equalisation Fund advisory boards in the beneficiary counties to fast-track the establishment of the committees.

She said the identified projects will inform the number of funds the counties will be entitled to in line with Article 204 of the Constitution.