Senate row a chance to rethink county revenue

The acrimonious debate in the Senate in the past several weeks over the revenue share for counties underpins deep seated socio-economic and political challenges afflicting the country.

Serious inequalities prevail but the right formula has not been established to deal with that. Senators have, therefore, been engaging in resource war but failing to tackle the root cause of depravation.

A better way of framing the issue is; what on, pro rata basis, is the amount of revenues being allocated to counties and how does that match with their functions? And how does that compare with what is retained by the central government?

For example, although the national government allocates money to counties for health function, which is fully devolved, the ratio of what is given is not commensurate with the work there.

The bulk of health budget remains with the national government yet most of the functions are with counties.

Importantly, the amount on the table for sharing, Sh316 billion pales into significance considering the needs of the counties and the annual national budget, which for this financial year, stands at Sh3 trillion.

Part of the problem, which the national government has capitalised on, is that constitutionally, the allocation is based on the last revenues audited by the Auditor General.

In this case, the last audit was done a couple of years ago. So the basis for calculation is faulty; it does not correspond to the current realities.

An equally critical issue is the ability of counties to generate own revenues. Ideally, the principle of devolution was also to enable counties to exploit and harness own resources, initiate and create systems to generate wealth to augment what they get from the Exchequer. That has not happened. Instead, they depend on the central government.

The lesson is that we have to relook at devolution and particularly revenue generation, allocation and utilisation.