Kenya counties to receive Sh198bn payout

Kenya’s 47 counties will receive a total Sh198 billion in the next financial year, according to bills introduced in Parliament by the Treasury on Thursday afternoon.

Treasury has established Sh945 billion as the total revenue available for sharing between the counties and the national government. Of this, Sh798 billion will be managed by the national government.

Sh147 billion will then be shared equitably between the 47 counties and a further Sh51 billion given to ensure regional referral hospitals continue to be run effectively once the regional governments are set up.

This means that county governments will get 24.2 per cent of the total revenue, which is nine percentage points above 15 per cent minimum prescribed in the Constitution.

Treasury has also established an Equalisation Fund of Sh4.3 billion.

These amounts are set out in the Division of Revenue Bill introduced yesterday. Treasury has not stated the formula used to make the allocations but the trend is along the same lines as that set out by the Commission on Revenue Allocation.

The Bill states that if the actual revenue collected in the 2013/2014 financial year is less than that in the bill, then the shortfall shall be met by the national government.

If, on the other hand, the government collects more revenue than projected, it shall be divided between the two levels of government as per the rate provided.

The County Allocation of Revenue Bill sets out how the money sent to the counties will be divided.

Nairobi gets the largest share at Sh15.2billion shillings, with Lamu County receiving the lowest amount, Sh1.6 billion.

Nakuru (Sh7.3 billion), Kiambu (Sh7.1 bn), Kakamega (Sh6.5 billion) and Meru (Sh5.9 billion) top the list of counties getting large allocations.

Other counties with the smallest allocations are; Isiolo (Sh1.9 billion), Tharaka Nithi (Sh 2 billion), Samburu (Sh2.3 billion) and Taita/Taveta (Sh2.3 billion).

Each county’s allocation shall be transferred to its County Revenue Fund, says the Bill, and this will be on a schedule to be determined by the National Treasury.

The Finance ministry has also for the first time set out what each county government will receive in order to start working upon establishment after the elections on March 4.

According to the Transition County Allocation of Revenue Bill introduced in Parliament, the counties have been allocated Sh6.7 billion to start running immediately after the elections.

This money will enable the county governments to pay governors, their deputies, the county executive, members of the county assembly, buy and fuel vehicles and pay staff.

This allocation was the basis of the MPs’ fury in the morning on Thursday, the result of which they forced the debate on the Sh58-billion Supplementary Budget Estimates to stop.

In the transition period, Nairobi, Nakuru, Kiambu, Nyeri and Kakamega will receive the largest amounts.

Samburu, Lamu, Isiolo, Tharaka Nithi, Tana River  and Taita Taveta will receive the smallest amounts.

This allocation is intended to keep the counties going until after the Budget for 2013/2014 has been drawn up.

The Bill states that Sh178 billion will continue to be in the hands of the national government as it carries out functions that should by the law be done by the county governments.

The Finance minister explained earlier in the day that these roles would be carried out by ministries, some of which have contracts they would not cancel before they are complete.