Get county revenue sharing formula now

What you need to know:

  • To guide resource allocation between national and county governments, the Constitution set a base, stipulating that at least 15 per cent of national revenues has to be disbursed to counties.
  • At least some 19 counties stand to lose what they have been receiving if the new formula comes into force.


For the umpteenth time, we have to revisit the stalemate over the proposed formula for revenue allocation to the counties. This is because the impasse poses serious risk to counties. The National Treasury cannot disburse cash to counties until the formula and the applicable law are approved. And without funding, services in the counties risk grinding to a halt.

Last week, and for the fifth time, the Senate, whose mandate is to approve funds for counties, failed to take a decision on the formula due to stark differences among the legislators.

The contestation is that the new formula prepared by the Commission for Revenue Allocation (CRA) stands to disenfranchise some counties and favour others. At least some 19 stand to lose what they have been receiving if the new formula comes into force.

The formula provides a new range of factors for determining allocation to counties. These include devolved functions, such as health and agriculture, population and service delivery.

FOLLOW FUNCTIONS

A core principle here is that cash should follow functions. But the formula has been stridently opposed on the ground that when the variables are aggregated, the cash allocations would favour high-potential regions and disadvantage the historically marginalised, like northern Kenya, Coast and parts of Rift Valley.

Resource allocation is emotive. It is closely linked to livelihoods, politics and economics. Whereas scientific methods have to be applied, they cannot be applied mechanically without tempering them with socio-cultural and political realities.

Sadly, the debate has been turned into a political contest with the interlocutors advancing partisan propositions that only worsen the division. This is perilous as it polarises the country and fails to resolve a matter that is germane to deepening devolution.

DEVOLUTION

The objective of devolution is to achieve two things. First, empower communities to make decisions on matters that affect them and two, achieve equity in resource allocation. Underlying these is the desire to cure historical injustices, among others, disparities in development due to skewed resource distribution.

To guide resource allocation between national and county governments, the Constitution set a base, stipulating that at least 15 per cent of national revenues has to be disbursed to counties.

Since 2013, when devolution came into effect, the National Treasury has been disbursing on average, 30 per cent of the revenues, to the counties, which is double the baseline. This underlines the government’s commitment to devolution.

When the Senators meet tomorrow for another round of debate, they must address the question: Is the new formula strengthening devolution or undermining it?