MPs’ mediation team to unlock counties' fund impasse
The National Assembly during a past session.
Parliament has established an 18-member mediation committee in a bid to reach an agreement on the amount that counties should receive as equitable share of revenue in the current financial year.
The move is aimed at solving a months-long stalemate over a plan to reduce equitable share of revenue to counties by Sh20 billion in the financial year ending June 30, 2025.
The team, which consists of nine MPs and senators each, will be tasked with finding a middle ground within 30 days from its first sitting to finally resolve the deadlock which has persisted since August.
The development comes after an impasse ensued following MPs’ approval of Sh380 billion as money to counties as opposed to the earlier Sh400.1 billion.
The planned cut is contained in an amended Division of Revenue Bill, 2024 which was occasioned by the withdrawal of the controversial Finance Bill, 2024 by President William Ruto in the wake of a pushback by Gen Zs.
The Division of Revenue Bill splits between the national and county governments, revenues generated nationally.
The National Assembly team will be led by Kiharu MP Ndindi Nyoro (Budget and Appropriations committee chairperson), Mary Emase (Teso South), John Chikati (Tongaren), David Ochieng (Ugenya), David Kiplagat (Soy), Otiende Amollo (Rarieda), Fatuma Jeho (Wajir Woman Representative), Makali Mulu (Kitui Central), and Ojiambo Oundo (Funyula).
On the other hand, the Senate team will be led by Finance and Budget committee chairperson Ali Roba (Mandera), Edwin Sifuna (Nairobi), Mohamed Faki (Mombasa), Richard Onyonka (Kisii), Eddy Oketch (Migori), Danson Mungatana (Tana River), Wahome Wamatinga (Nyeri), Julius Murgor (West Pokot) and Veronica Maina (nominated).
MPs had in August passed the Division of Revenue (Amendment) Bill, 2024 and thereafter referred the Bill to the Senate for consideration.
The Senate in October, considered and passed the said Bill, with amendments and referring it back to the National Assembly.
However, later that October, the National Assembly negatived a Motion on consideration of the Senate amendments to the Bill thereby committing it to a mediation committee.
“I hereby convey the said decision of the National Assembly to the Senate and seek the appointment of nine Senators to a Mediation Committee to consider the Bill in accordance with Article 113 of the Constitution,” said Senate Speaker Amason Kingi last week.
County governments rely on the equitable share disbursed by the National Treasury, as a result of their low own-source revenues, to pay salaries, fund development projects, and settle bills owed to contractors and settlers.
But the counties have been forced to endure delayed disbursement of the money amid revenue shortfalls and mounting debt repayments by the national government.
Senators want counties to be given Sh400 billion as shareable revenue while MPs have proposed Sh380 billion for the evolved units leading to a clash between the two Houses.
In sticking to the Sh380 billion, the National Assembly argued that the revenue projection of Sh346 billion which was to be collected had the Finance Bill, 2024 been passed is now not available hence the reduction of money promised to counties by Sh20 billion.
But senators differed with their counterparts, saying counties cannot receive anything less than the Sh385.4 billion they received in the fiscal year ended June 30, 2024.
While the law requires the Bill to be enacted by June 10 or before commencement of the next financial year, four months into the new financial year it is yet to be passed by MPs.
The stalemate saw the National Treasury release Sh31.8 billion to counties as shareable revenue allocation for July, 2024 two months later in September.
The move, Treasury Cabinet Secretary John Mbadi said, followed an advisory by the Attorney-General Dorcas Oduor to allow for the release of 50 percent of funds due to counties based on last financial year’s allocation of Sh385 billion.
He explained that the problems encountered at the beginning of the fiscal year in release of the funds were legal in nature which he had to seek for legal opinion of the AG.
CS Mbadi had pledged to release funds for August allocation this month, however, it is not clear whether the money was released as well as the fate for September and October allocations.
In 2019, the National Assembly tried to cure the situation when it came with the Public Finance Management (Amendment) Bill, 2019 that would have allowed counties to access the 15 percent pending the passage of the Division of Revenue Bill in the event it is not enacted before the commencement of the next financial year.
