Governors, Treasury CS Rotich differ over county revenue allocation

The Senate Finance Committee, chaired by Billow Kerrow (right), in a past meeting. The committee met governors and Treasury Cabinet Secretary Henry Rotich on February 22, 2017. PHOTO | DIANA NGILA | NATION MEDIA GROUP

What you need to know:

  • The NHIF, the governors observed, is a parastatal under the national government.
  • Mr Ouko, while acknowledging that the MPs\s decision to reduce the allocation was ill-advised, said the amount was appropriate to take care of inflation, population increase and the high cost of services.

Governors on Tuesday disagreed with Treasury Cabinet Secretary Henry Rotich over the formula used in allocating money to counties for the next financial year.

Mr Rotich, they said, was deliberately pushing for underfunding of counties to portray them as failures, the Council of Governors (CoG) said.

CoG chairman Peter Munya, who was accompanied by governors Wycliffe Oparanya (Kakamega) and Jack Ranguma (Kisumu), claimed the minister had ignored consultative decisions on the amount that counties deserved.

They cited a decision to transfer the free maternity scheme funds from the counties to the National Hospital Insurance Fund (NHIF), saying that was a unilateral decision meant to frustrate counties.

The governors, who said that besides money for other devolved functions like roads and libraries being left out of the budget, they were not consulted over the free maternity health scheme that will now be administered under the NHIF.

'UPSIDE DOWN'

The NHIF, the governors observed, is a parastatal under the national government and questioned why the government had allocated conditional grants to counties for a function that will be undertaken by another level of government.

“It is completely turning the law upside down. Don’t give the impression that counties are receiving a lot of money for public consumption.

‘The national government must decide. If they want to keep maternity money, let it be under their budget,” Mr Munya told the Senate Finance Committee, chaired by Billow Kerrow (Mandera).

Other senators present included Senate Majority Chief Whip Beatrice Elachi (Nominated), Anyang’ Nyong’o (Kisumu), Paul Njoroge (Nominated) and Aron Cheruiyot (Kericho).

INADEQUATE ALLOCATIONS

Prof Nyong’o said the national government should ensure that county governments are able to perform their functions by allocating enough money.

“If health is devolved, don’t take maternity money ... somewhere else. The money for referral hospitals, which are under the national government, never changes,” Prof Nyong’o said.

Governors want the Senate to reconsider the equitable share for the 2017/18 financial year, saying money provided in the Division of Revenue Bill forwarded to the Senate was inadequate to fund devolved functions.

MPs in the National Assembly reduced the equitable share in the bill that determines the amount of money allocated for devolved functions from Sh299.1 billion that the Treasury had proposed to Sh291.1 billion.

GLOBAL STANDARDS

Commission on Revenue Allocation Chief Executive Officer George Ouko told the committee the agency had proposed that counties be allocated sharable revenue of Sh314 billion.

Mr Ouko, while acknowledging that the MPs\s decision to reduce the allocation was ill-advised, said the amount was appropriate to take care of inflation, population increase and the high cost of services.

The Sh291.1 billion, he said, implies that counties will be growing at a rate of 3.8 per cent, which is below the inflation rate that stands at 6.7 per cent.

Mr Kerrow demanded to know why the minister kept changing the parameters used to allocate money to counties, pointing out that this year inflation was used as the benchmark instead of revenue growth.

Mr Rotich said they are guided by the Constitution and global standards when making decisions on how to share revenue between the two levels of government.