Hopes for an agreement over the controversial third revenue-sharing formula were high Tuesday after it emerged that the Senate has narrowed down the gap to two out of the six proposals that have been on the table.
Debate on the formula had been expected Tuesday, but was deferred to Thursday after it emerged negotiations are still ongoing.
Speaker Kenneth Lusaka has established a four-member ad hoc committee to harmonise the two proposals and see whether it could lead to a breakthrough.
The committee has until the end of Wednesday to develop a report and submit it for debate during a special sitting of the House Wednesday.
EQUITABLE SHAREABLE REVENUE
In the 2020/21 financial year, counties were allocated Sh316.5 billion in equitable shareable revenue, which in the absence of the formula cannot be shared among the counties.
“The committee is discussing and hopefully narrowing the gap between the competing sides,” Mr Lusaka told the Nation Tuesday.
Senators have rejected the formula that was developed by the Commission on Revenue Allocation (CRA), which they describe as polarising because it perpetuates inequalities among devolved units.
Even the version that was developed by the Senate Finance Committee, and which was an improvement of the CRA proposals, was also rejected on the same score, with the lawmakers arguing that it sought to take away resources from regions that have traditionally been marginalised while rewarding those that have benefited from big allocations in the past.
The Nation learnt that the two proposals on the table are one that seeks to postpone the commencement date of the third formula by two years as had been suggested by Elgeyo-Marakwet senator Kipchumba Murkomen to allow for further discussion.
The second proposal says the new formula should apply to allocations that are over Sh316 billion.
Members of the ad hoc committee are senators Irungu Kang’ata (Murang’a), Mutula Kilonzo (Makueni), Ledama Olekina (Narok) and Margaret Kamar (Uasin Gishu).
“The progress has been positive. This means that if we continue engaging we may arrive on the best mechanism where it will be a win-win situation,” Mr Kang’ata said Monday.
Senators Mwangi Githiomi (Nyandarua), Ledama Olekina (Narok) and Abdullahi Ali (Wajir) had proposed amendments to the committee’s report.
In his amendment, Mr Githiomi wants 70 per cent of total allocation to the counties shared equally by all the 47 counties, while the remaining 30 per cent to be subjected to the criteria developed by CRA, with population and health index getting the lion share.
Both Mr Ali and Mr Olekina have a similar amendment, bar the percentage.
Mr Olekina wants the 90 per cent of the allocation shared based on the criteria developed by CRA, while 10 per cent of the allocation should be used to cushion counties that will have reductions in their allocations compared to what they received in the last financial year until such a time when the equitable share will reach Sh395 billion.
Mr Ali wants 95 per cent of the total allocations (Sh316.5 billion) shared out depending on the CRA criteria and the remaining five per cent to cushion counties that will have reductions in their allocations compared to what they received in the last financial year until such a time when the equitable share will reach Sh395 billion.