Uhuru and Raila break revenue stalemate with Sh50bn promise

The Senate has endorsed President Kenyatta’s push for an additional Sh50 billion in funding to counties to help break the stalemate on the third basis of sharing revenue. 

In the end, it had to take Mr Kenyatta and ODM leader Raila Odinga to thaw the ice and provide the way forward on a matter that has rocked the House since July amid claims that the futile debates had become hostage to 2022 politics.

The decision was endorsed Tuesday during an informal meeting of all senators, known as a Speaker’s Kamukunji, just hours after the President hosted the House leadership at State House and gave the pledge. 

Above the projections

Should Mr Kenyatta’s promise stand, the allocation to counties will rise to Sh366.5 billion in the 2021/22 financial year, a figure that is way above the projections of the National Treasury.

This marks the end of the stalemate and sets the stage for the release of funds whose disbursement had been halted by lack of a legal regime.

A source who attended the Kamukunji said senators agreed that no one would lose out.

“We had requested for less, but we got something bigger. We’re happy and ready to deal should the government provide the funds,” said a senator who did not want to be named for fear of antagonising his colleagues.

The Nation Tuesday learnt that Sh50 billion was a product of a secret meeting involving Nyamira Senator Okong’o Mogeni, Majority Whip Irungu Kang’ata and an official of the Parliamentary Budget Office. The three spent the night holed up in Concorde Hotel in Parklands, Nairobi, poring over the numbers and developing the figures that were presented to the two leaders for endorsement.

“The President has taken responsibility and we thank him. The good thing is that we have a mechanism of ensuring the promise is kept,” Homa Bay Senator Moses Kajwang said, adding, the next Division of Revenue Bill will have to include the figure.

Pressed on what assurances there are that the government will provide the additional Sh50 billion — given the State House statement said the extra funding will be dependent on “performance of the economy”— a senator said they would make their resolution conditional too.

The status quo

“That the formula will only kick in when the money is released,” explained the vocal senator, suggesting they will insist the status quo is retained until the government honours its pledge.

One faction in the revenue standoff, dubbed “Team Kenya” had been pushing hard to ensure that no county loses out, and Tuesday’s pledge by the President appeared to have been what the doctor ordered for the group.

The deal for the extra Sh50 billion was hammered out during a meeting between Mr Kenyatta, Mr Odinga and the Senate leadership.

It was during the meeting that the President accepted a request by the senators for more funds to counties in a bid to end the stalemate that had virtually crippled the operations of the House.

“With this undertaking, the President urged the lawmakers to resolve the revenue sharing stalemate so as to avoid disruption of service delivery in the counties,” a dispatch from State House stated.

During the Kamukunji, it was agreed that the outcome of the State House meeting should form part of the report of the 12-member informal committee that had been established to try to develop consensus and formally tabled in the House today.

To insulate the pledge from future shocks, it was agreed that the figure should form part of the report of the committee and adopted by the House.

In previous years

The team was further tasked with the duty of developing its own parameters and simulating them against the Sh366.5 billion and [to] ensure that no county losses out from what they have received in previous years.

At yesterday’s meeting, the formula the Commission on Revenue Allocation developed was simulated against the new figure (Sh366.5 billion) and three counties — Wajir, Kwale and Mandera — lost out.

The committee’s main task now is to develop a formula that will save the three devolved units and ensure no one loses a coin, according to Minority Whip Mutula Kilonzo Junior.

As a result, the committee has been directed to start its work this morning and present its findings to another Kamukunji, which will be held on Monday for validation, before the final report is tabled on Tuesday for debate and eventual voting.