County governments are set to receive Sh316.5 billion in the 2020/2021 financial year despite reduced revenue collections.
The figure, which is equivalent to the current financial year’s allocation, was arrived at during an Intergovernmental Budget and Economic Council (IBEC) meeting chaired by Deputy President William Ruto on Tuesday.
Commission on Revenue Allocation (CRA) chairperson Jane Kiringai said the national government will retain a reduced figure of Sh1.54 trillion out of the projected shareable revenue of Sh1.884 trillion for the 2020/21 financial year, with the rest going to county governments as equitable share and for the Equalisation Fund.
“Based on the continued under-performance of ordinary revenue, the budget committee of IBEC recommends that the allocations to each level of government be maintained at the Financial Year 2019/2020,” said Ms Kiringai.
Ms Kiringai said the 2020/2021 division of revenue was being made in a constrained fiscal environment owing to depressed revenue, high debt repayments and a rising wage bill and called on both levels of government to exercise austerity to tame unnecessary spending.
On his part, Dr Ruto urged counties to match their budgets to the country’s revenue to ensure that the country does not spend more that it can collect.
“We have lowered our revenue projections so that we can try to live within our means,” said Dr Ruto while calling for concerted efforts to address the issues that hinder effective management of pending bills.
“Treasury, the Council of Governors and representatives from county assemblies should meet and agree on a way forward,” he said.