President Ruto to meet governors in effort to end revenue impasse
President William Ruto when he was joined by cabinet secretaries and governors at State House, Nairobi on September 26, 2022, before flagging off trucks carrying relief food across the country.
President William Ruto is next week expected to meet governors in a bid to end the impasse over the equitable share revenue.
The summit, which brings together the presidency and governors, comes after a meeting chaired by Deputy President Rigathi Gachagua failed to reach a middle ground.
The conference is the supreme agency for intergovernmental relations. The law provides that it meets at least two times a year.
The Council of Governors maintains its stance that the equitable share be increased to Sh425 billion from the current allocation of Sh370 billion for the 2022/23 financial year.
Governors say they hope the meeting with President Ruto will help end the stalemate.
The National Treasury says it can only increase the amount to Sh380 billion while the Commission on Revenue Allocation (CRA) wants a Sh407 billion allocation.
CRA says its recommendation has been prepared against a backdrop of a recovery in the country’s economy following the containment of coronavirus.
The commission also recommends that Sh8.7 billion be set aside for the Equalisation Fund for the 2023/24 financial year, in line with Article 204 of the Constitution which provides for an allocation of 0.5 per cent of the most recent audited and approved accounts, amounting to Sh1.730.9 trillion.
CRA is mandated by the Constitution to make recommendations on the basis of the equitable sharing of revenue raised by the national and county governments.
In addition, the commission is required to make recommendations six months before the beginning of the financial year or at a later date agreed between the Treasury and CRA.
Mr Gachagua, who chairs the Intergovernmental Budget and Economic Council (IBEC), said counties should not expect any new money.
Ruffle feathers
The announcement is likely to ruffle feathers as county bosses accuse the national government of undermining devolution.
“We express discontent for the failure by the National Treasury to build consensus on the county equitable share of revenue despite the objective recommendation by CRA,” council Vice-Chairperson Ahmed Abdullahi said recently.
“The continued allocation of funds for devolved functions to national government ministries, departments and agencies is an affront to devolution.”
The Wajir governor said national government entities should drop devolved functions, adding that counties are of age and have the capacity to deliver on their mandate.
Last September, leaders from both levels of government admitted that the relationship has not been cordial in the last 10 years of devolution.
Governors have also protested delayed disbursement for November, December and January, saying they cannot pay for drugs, water and electricity, and run development projects in critical areas such as roads and maternal healthcare.
By law, counties are entitled to at least 15 per cent of the government-audited revenue.
The law provides for the timely disbursement of the equitable share generated by the national government.
The 2012 Public Finance Act mandates the Treasury to disburse money to counties at the beginning of every month and not later than the 15th day from the start of the fiscal quarter.
It stresses that disbursement be made in accordance with a schedule prepared by the Treasury in consultation with the IBEC.
