Oparanya now wants Sh20bn fund used to cushion poor counties

Council of Governors chairman Wycliffe Oparanya wants the Sh20 billion equalisation fund domiciled at the National Treasury to be used to cushion poor counties that will lose out on the proposed revenue sharing which favours densely populated regions.

The proposed revenue sharing formula has caused a big division in the Senate, throwing counties deeper into a financial crisis.

Some Sh316.5 billion has been allocated to the counties as equitable shareable revenue in the 2020/21 financial year.

If the Senate adopts the formula, 18 counties — mainly the less populous and marginalised — will lose up to Sh17 billion.

Mr Oparanya Wednesday noted that it would be painful for counties to adjust their budgets and advised that the third basis on revenue sharing be passed and equalisation kitty be used to supplement regions which will lose out.

"Counties have already prepared their budgets and it will be difficult to adjust them as this will affect operations," Mr Oparanya, who is also the Kakamega County boss, said in Vihiga County.

He noted that the proposed formula would benefit his county but would impact negatively on Vihiga which risks losing Sh300 million.

"Let us have the equalisation funds used to cushion the counties that will lose out," he said.

He said the first and second basis of revenue sharing formula that were used during the first six years of devolution were to help in coming up with a more agreeable plan but this was yet to be realised.

For his part, Vihiga Governor Wilber Ottichilo said the third basis of revenue sharing would be a “disaster if approved by the Senate”.

He suggested that the proposed formula should be deferred for another year to allow room for consultation.

"If okayed, it will affect us in running the government. I plead with the Senate to defer it until next year to allow room for a clear conversation on the matter," he said.

Dr Ottichilo said poor counties would lose out on the equitable share in the proposed plan. On Tuesday, a special sitting of the Senate called to discuss the formula adjourned without debate after Minority Leader James Orengo called for further consultation on the various proposals submitted by lawmakers.

REJECTED PROPOSAL

Senators from the sparsely-populated northern Kenya have rejected the proposal.

Further, three senators — Johnson Sakaja (Nairobi), Boniface Kabaka (Machakos) and Sam Ongeri (Kisii) — have opposed the formula even though their counties stand to gain more money.

The failure by the lawmakers to agree on the formula means that debate on the County Allocation of Revenue Bill, 2020, which had been shelved pending a decision on the formula, will remain in abeyance.

The Bill is the legal instrument that details the horizontal share of the revenue raised nationally but which is allocated to the 47 counties.

It is calculated at not less than 15 per cent of the last audited accounts of the national government as approved by Parliament.

Commission on Revenue Allocation has developed 10 criteria for sharing revenue among the counties through the third basis.

These are health index on which the commission placed 17 per cent weight, agriculture (10 per cent), population (18 per cent), poverty (14 per cent), basic share (20 per cent), land area (eight per cent), rural access (four per cent), urban households (five per cent), fiscal effort (two per cent) and prudence index (two per cent).