EDITORIAL: Address the funding of counties to end hitches - Daily Nation

Address the funding of counties to end hitches

Wednesday September 12 2018

By EDITORIAL
More by this Author

The Council of Governors meeting in Nairobi this week has raised some fundamental issues that should be addressed comprehensively to keep the spirit of devolution alive. First is the question of persistent delays in disbursement of cash to the counties that has literally crippled the operations of the devolved units and rendered them unable to deliver services.

In their report, the governors indicate that some 22 counties have not got money from the National Treasury this financial year; the 25 that got the funds were only given a fraction of their entitlements. Cumulatively, there is a serious financial crisis facing counties and this cannot be wished away.

The delays and inadequate disbursements is the surest way to kill devolution.

DIVISION OF REVENUE

Secondly, the governors have expressed their concern that their views are hardly taken on board in regard to division of revenue.

Specifically, they negotiated with the Ministry of Transport to raise the portfolio of cash they received from the fuel levy from 15 per cent to 20 per cent but that was never implemented.

Fuel levy is used to develop roads. Whereas this was previously the mandate of the ministry, it is now a shared responsibility.

There are classes of roads developed and maintained by counties. The argument, therefore, is that, since the counties are shouldering an equally significant burden of building and maintenance of roads, they deserve higher allocations to enable them to execute that mandate.

MANAGING HOSPITALS

This fact is critical because it applies to other sectors. For example, health has largely been devolved with counties taking the responsibility of managing hospitals — except referral institutions — and paying salaries for medical practitioners.

The national government is left with the task of formulating policy, providing oversight and managing the two main referral hospitals — Kenyatta in Nairobi and Moi in Eldoret.

On a pro-rata basis, the national government’s health expenditure has gone down and, instead, most of the costs of have been transferred to the counties. However, the allocation of funds is skewed in favour of the national government.

CREATE WEALTH

There is a need for a serious discussion about the cash allocations between the national and county governments.

Constitutionally, the baseline is 15 per cent, which should be raised to conform to the reality on the ground. Success of devolution will only depend on financial stability, and this is where the discussion should be. Even so, counties must also ask the question, what are they doing to create their own wealth?

Why have rate collections and general revenues declined since the advent of devolution? Simply put, counties must find ways of generating own incomes so that they can wean themselves off the national government and operate as sustainable entities — which is what the Constitution envisaged.

Advertisement