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Treasury raises funds for devolution as counties share cash

Friday February 15 2019


National Treasury Cabinet Secretary Henry Rotich speaks during the African fiscal forum at Radisson Blu Hotel in Nairobi on February 14, 2019. The ministry has indicated how funds will be apportioned to all counties. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

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Only six counties will get more than Sh10 billion allocation in Treasury Secretary Henry Rotich’s Sh2.7 trillion budget tabled in Parliament yesterday.

Nairobi City County will receive the lion’s share of the cash after the Treasury allocated it Sh15.6 billion out of the total equitable share of Sh310 billion.

Turkana, Nakuru, Mandera, Kilifi and Kakamega counties will each receive slightly more than Sh10 billion.

Lamu, Tharaka Nithi, Elgeyo Marakwet, Baringo, Embu, Isiolo, Kirinyaga, Laikipia, Nyamira, Nyandarua, Samburu, Taita-Taveta, Vihiga and West Pokot will get less than Sh5 billion each. Lamu County will receive the least amount of Sh2.5 billion.

“The county government’s equitable share of revenue was allocated among the county governments on the second basis of revenue allocation criteria approved by Parliament in accordance with Article 217 of the Constitution,” the Treasury said in the Division of Revenue Bill, 2019 tabled in Parliament.



The allocation to 47 devolved units for the financial year beginning July 2019 and ending June 2020 is about Sh6 billion more than the current allocation of Sh304.9 billion.

The county governments will also receive Sh13.9 billion additional conditional allocations from the national government to cater for leasing of medical equipment (Sh6.2 billion), compensation for user fees foregone (Sh900 million), level five hospitals (Sh4.3 billion), construction of county headquarters (Sh485 million) and rehabilitation of youth polytechnics (Sh2 billion).

A further Sh38.7 billion will be allocated to the counties in conditional loans and grants and Sh8.9 billion from fuel levy fund for roads construction and maintenance.

The Sh38.7 billion in loans and grants will go towards devolution support of levels one and two hospitals, universal healthcare programme, agriculture and rural inclusive growth project, devolution advice and support and Kenya Climate Smart Agriculture.


The money will also go towards funding the Kenya Urban Support Project, water and sanitation development, water tower protection and climate change mitigation and adaptation and drought resilience programme in Northern Kenya.

In total, the Treasury has set aside Sh371.6 billion to county government allocations, a slight decrease from Sh372.7 billion allocated in the current financial year.

Counties lost Sh9 billion in the current financial year following adjustment in the revised budget through the supplementary budget I.

“The County Allocation of Revenue Bill, 2019 proposes to allocate a total of Sh371.6 billion of resources raised nationally.

"This is equivalent to 36 percent of most-recent audited revenues which have been approved by the National Assembly for the financial year 2014/15 (Sh1 trillion),” the Treasury says in the bill.

The counties’ equitable share of revenue raised nationally was arrived at by adjusting the base allocation of county governments share for financial year 2018/19 from Sh314 billion to Sh304.9 billion, and subsequently growing the revised base for county governments equitable share for financial year 2018/19 by Sh5 billion.

The cumulative shortfall since the 2015/16 financial year now exceeds Sh374 billion, with the largest shortfall of Sh195 billion having been in 2017/18.