Counties will now get Sh387 billion as equitable share of revenue despite opposition by some senators to the mediated figure.
The development comes after 24 senators voted against one on Thursday to adopt a report of the Mediation Committee on the mediated version of the Division of Revenue (Amendment) Bill, 2024, averting a further stalemate over the allocation to counties for the financial year ending June 30, 2025.
The approval followed a stormy debate on the mediation report where some senators led by Moses Kajwang’ (Homa Bay), Godfrey Osotsi (Vihiga) and his Busia counterpart Okiya Omtatah were opposed to counties losing Sh13 billion as a result of the middle ground struck during the mediation.
On Wednesday, Senator Kajwang', while disagreeing with the report, said counties should not get a shilling less than the Sh400.1 billion Parliament agreed to during the first mediation on the same Bill.
He said senators had convinced MPs that the right amount of money that should go to counties was Sh400.1 billion in view of non-discretionary expenditure to be borne by the devolved units that were not part of their integrated development plans.
The third-term senator cited examples of such expenditure, including each county being required to provide Sh250 million, to be matched by the national government, for county aggregation and industrial parks.
He also said counties had to pay Sh5,000 monthly to community health promoters, a programme imposed on counties by the national government but which had been delayed due to lack of funds.
“How do you expect these people to be motivated or highly-driven if here at the Senate or National Assembly we are not granting additional money to pay for their perks? That is why I disagree with this mediated report,” said Mr Kajwang’.
“We wanted more, but we were able to convince our brothers to settle on Sh400 billion. It was not voodoo but scientific. We could account for where every additional shilling was going to and were able to explain that there were non-discretionary expenditures some of which were not part of the CIDP,” he added.
The County Public Accounts Committee chairperson said any revenue shortfall should be borne by the national government as it has the means and instruments to get additional financing to cater for fiscal deficit, but county governments do not.
“I do not know what went on during the mediation but in the past one, we were able to demonstrate why Sh400 billion was sufficient,” he said.
Senator Osotsi said accepting a lower figure would set a wrong precedent and be a blow to devolution.
He argued that the decision to reduce the shareable revenue from Sh400.1 billion to Sh387 billion would give those opposed to the existence of the Senate the justification that senators have no role in legislation.
“We passed the Division of Revenue Act (Dora) and then it is brought back to us to adjust the figures downwards and we easily agree to the same? This is something that we should not entertain as a Senate as we are here to protect devolution,” said the ODM deputy party leader.
Senator Omtatah said he was opposed to reducing the allocation to counties. Counties are already struggling because they do not have enough resources to carry out many devolved functions.
“Reduction of the money is going to create problems on the ground yet counties have passed their budgets and will now be forced to supplement their budgets, which is capped at not more than 10 percent per vote head. We are inviting counties to a situation where they may have to break the law,” he said.
However, while tabling the report, Tana River Senator Danson Mungatana rallied the senators to adopt the report as Kenya’s fiscal reality cannot match the previously approved Sh400.1 billion.
“After the cameras were removed during the mediation process, we were given facts and figures by the Treasury and the question now moved from wishes to the reality on what can be disbursed. So we need to be alive to the fiscal reality the country is in,” he said.
MPs have been locked in a battle over the amount of money counties should receive following a proposal to slash such allocations by Sh20 billion.
The impasse arose after the National Assembly voted to overturn the Sh400 billion that counties had been allocated in an earlier Division of Revenue Bill, 2024.
With the rejection of the 2024 Finance Bill following protests by Gen Zs, it was proposed that counties be allocated Sh380 billion.
However, last week, the lawmakers agreed to have counties allocated Sh387 billion as the equitable share of revenue.
