Nairobi gains from new revenue division formula

Thursday July 6 2017

Nairobi Governor Evans Kidero

Nairobi Governor Evans Kidero joins a member of the Mount Kenya Milk Choir for a dance at Uhuru Park, Nairobi, on July 1, 2017 on International Day of Cooperatives. Nairobi will get Sh15.4 billion in the 2017-18 fiscal year, the highest revenue allocation among the 47 counties. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

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Nairobi will get the highest share of the Sh302 billion allocated to county governments in the current financial year following the signing into law of the 2017 County Allocation of Revenue Bill.

In the 2017/2018 financial year, the 47 counties will share a total allocation of Sh341 billion, consisting of Sh302 billion of equitable share of national government revenue, Sh23 billion in conditional grants from the national government and a further Sh16.4 billion in conditional allocations from loans and grants from development partners.

According to the law assented to by President Uhuru Kenyatta, Nairobi will get Sh15.4 billion, an increase from Sh14 billion in the 2016/17 financial year.

Other counties that have also received huge allocations are Turkana (Sh11.3 billion), Kiambu (Sh9.96 billion), Kilifi (Sh9.95 billion), Kakamega (Sh9.9 billion) and Mandera (Sh9.7 billion).

The apportioning is based on a second-generation formula, a new sharing method agreed on by the Commission on Revenue Allocation and passed by the Senate last year that will see counties that collect higher revenue receive more money.

The equitable sharing of the Sh302 billion is pegged on population at 45 per cent, basic equal share at 26 per cent, poverty levels at 18 per cent, land area at eight per cent, fiscal responsibility at two per cent and development at one per cent.

It also took into account the published census results for the northeastern counties of Garissa, Wajir and Mandera.

However, the new formula saw Kakamega, Turkana and Mandera, which have been getting the lion’s share, lose out to Lamu, Tharaka-Nithi, Taita-Taveta, Elgeyo-Marakwet, Marsabit, Kirinyaga and Isiolo counties.

Though the allocation is supposed to enhance development and services, recent reports from the Office of the Auditor-General and that of Controller of Budget have indicted the county governments for misusing public funds.


Counties will also spend Sh23 billion in conditional grants from the national government on the basis of the approved formula, to enhance services to their people.

They include grants for level five hospitals, special-purpose grants supporting the construction of county headquarters and conditional allocations for development of youth polytechnics.

Others are allocations to compensate county health facilities for forgone use fees, leasing of medical equipment and allocations from the road maintenance fuel levy fund for repair and maintenance of county roads.

While spending the billions, the county governments will be guided by a budget ceiling on recurrent expenditure.

The budget ceiling, as approved by Parliament, sets the limits of recurrent expenditure for county assemblies and county executives.

For instance, Nairobi gets the highest limit of Sh1.2 billion for the county assembly and Sh738 million for its executive wing.

The President also approved changes to the 2016 County Governments Act that make further provisions to the county assembly service boards and the county assembly service.

The changes provide a framework for establishing effective operation of the county assembly service in all counties as well as the procedure for appointing members of the board and functions of the clerk.