Senators still deadlocked on revenue sharing

The Senate, for the fifth time, on Thursday failed to adopt the third basis formula for sharing revenue among counties during a special sitting as financial operations in the counties take a hit.

The formula was developed by the Commission on Revenue Allocation (CRA) and forwarded to the Senate for consideration last year.

The implication of the third formula is that the number of counties that have been receiving a higher allocation because of their huge landmass and high poverty indices will receive less.

According to the Division of Revenue Act, 2020, which equitably allocates the revenue generated at the national level between the national purse and counties, Sh316.5 billion has been allocated to the devolved units in the 2020/21 financial year.

The differences between senators whose counties are likely to gain and those that will lose have been the biggest hindrance to the adoption of the formula.

SPECIAL SITTINGS

Thursday’s was the fifth sitting to discuss the issue. Three of the five have been special sittings, in addition to several Speaker’s “Kamukunjis” (informal sittings of the House) to find a common ground on the matter.

However, every time the matter comes up, it falls through, raising doubts on whether the House has the capacity to adopt the formula to pave the way for the counties to make their budgets.

Normally, counties have until June 30 every financial year to finalise budget-making, which includes enacting the County Appropriation Bills and Finance Bills.

According to Article 217 (1) of the Constitution, once every five years, the Senate must determine the basis for allocating funds among the counties.

This means that, until the formula is in place, the Senate cannot consider the County Allocation of Revenue Bill, which shares funds equitably among the 47 counties.

Senate Majority Leader Samuel Poghisio (Pokot) was forced to request Speaker Ken Lusaka to have the motion deferred to July 28 because Finance and Budget Committee Chairman Charles Kibiru (Kirinyaga) was not available to move the committee’s report that adopted the CRA formula.

The request was granted, effectively cancelling the afternoon sitting.

HASTEN PROCESS

“The chairman should hasten the process because it is taking exceedingly long. He must provide leadership,” Mr Lusaka said.

The Speaker’s directive also means it will be the fourth special sitting of the Senate in one month. Makueni Senator Mutula Kilonzo Junior was not amused at the adjournment and immediately took to social media to vent his anger.

“We should impeach Speaker Lusaka for adjourning the Senate unlawfully! Bure (useless!),” Mr Kilonzo Jnr said. In recalling the House for the special sitting yesterday, four orders (businesses to be transacted) had been lined up for consideration.

Other than the adoption of the third basis formula, there was the Independent Electoral and Boundaries Commission (Amendment) Bill, 2019, County Tourism Bill, 2019 and the Care and Protection of Child Parents Bill, 2019.

The new formula is a radical shift as it expands the parameters for the shareable revenue. It puts the health index at 17 per cent, agriculture 10 per cent, county population 18 per cent, basic share index 20 per cent, land area eight per cent and rural access at four per cent.

The others are poverty 14 per cent, urban households five per cent, fiscal effort (revenue collection) two per cent and prudent use of public resources at two per cent.