The Commission on Revenue Allocation (CRA) in its proposals recommended that county governments should receive a total of Kshs. 407 billions in allocation Sh203 billion and the national government a total of Khs. Sh407 billion.The commission’s proposal for county governments is more than the Sh160 billion approved by the Cabinet sitting during the month of April to factored in the national budget for the next financial year.
Of these monies, the big five counties in the proposed to allocations are that Nairobi Sh11.7 billion, Kakamega Sh7.3bn, Bungoma Sh7.2bn, Kiambu Sh6.5bn and Nakuru Sh6.9bn, translating into 20 per cent of the total allocations to the counties.
The total of these to go to the big five in the proposed allocations that have drawn widespread criticism, especially from members of Parliament are said to be more than the proposed total allocations to fifteen counties that the legislators are calling unfair.
Launching the share formula between the national government and the 47 counties, the CRA boss, Micah Cheserem said they were working with 2011/12 audited revenue but they expected the government to collect revenue amounting to Kshs. 800 billion in 2012/13 financial year.
Mr. Cheserem invited members of the public to discuss and debate over the proposed formula before it is forwarded to Parliament for debate and approval adding that it will be in place effectively for four months in the event of a March 2013 general elections.
He said: “If elections are held on March 4, 2013, the earliest the government will be in place will be in April next year. In all likelihood, the 2012-2013 Budget will be run by the national government to the tail-end.”
According to the formula, 60 percent of the allocation will based on population size, 20 percent on basic equal share, 12 percent on poverty level rate, 6 percent on the size of land and 2 percent on fiscal responsibility exercised by the county. The remaining 20 per cent will be shared equally among the 47 counties.
The Moses Sichei the CRA Director in charge of Research, says that the formula which can be amended after three years is aimed at ensuring equity in resource distribution and sealing the disparities witnessed in previous allocations under the old constitutional order.
Top beneficiaries in the allocations include Nairobi Kshs.11.7 billion, Nakuru Kshs. 6.9billion, Kiambu Kshs.6.5 billion, Kakamega Kshs. 7.3 billion, Bungoma Kshs. 7.2 billion, Turkana Kshs. 5.7 billion, Kisii Ksh. 5.5 billion, Kisumu Kshs. 4.6 billion, Kilifi and Kisii Kshs. h5.5 billion each, Wajir Kshs. h4.7 billion and Uasin Gishu Kshs. h4.3 billion with Lamu, which is the smallest of the 47 counties in the country, coming last with Kshs. 1.4 billion.
On the bottom line of the proposed disbursements are Isiolo Kshs. 1.9 billion, Samburu Kshs. 2.2 billion, Taita Taveta and Tharaka Nithi Sh2.3 billion each while Elgeyo Marakwet was allocated Kshs. 2.4 billion, Laikipia and Tana River Kshs. 2.6 billion apiece.
The fifteen counties that score lowest on the stated CRA scales are – Nyamira, Marsabit, West Pokot, Vihiga, Busia, Embu, Kirinyaga, Tana River, Laikipia, Elgeyo Marakwet, Tharak Nithi, Taita Taveta, Samburu, Isiolo and Lamu which are expected to bag 19 per centof the revenue to be shared.
Parliament will have to approve two funding Bills, the Division of Revenue Bill which deals with sharing of revenues between the national and county governments and the County Allocation of Revenue Bill which relates to the sharing of revenue among the counties, at least two months before the end of each financial year.
The commission’s technical committee is still working on the criteria on distribution of the equalization funds, but Commissioner Raphael Munavu urged that the county government must be allowed to prioritize their own development projects with special preference to water, education and health services.
The commission recommended that the Equalisation Fund (0.5 per cent of the national Budget) be disbursed from the 2013-2014 financial year when county governments will be functioning.
It also proposed that the funds set aside for the 2011-2012 and 2012-2013 financial years be rolled over to the 2013-2014 financial year. The sectors to be targeted for improvement are water, education, health services, energy and rural access roads.
Mr. Cheserem says that the money may not be disbursed in the next financial year because of the widespread un-certainties concerning the next general elections date that is still seeing others pushing for March next year and others December this year.
The other issue is the budgetary processes that must be followed as per the law before the matter is taken to parliament for debate and approval both which are traditionally mired in a lot of bureaucratic red tape
He says that if the ele4ctions are held in March next year, the earliest the new government would be in place would be in April of the same year which means that the 2012/2013 national budget would be run by the national government up to the tail end.
The Commission on Revenue Allocation says that in case parliament approves these proposals, the allocation formula will be employed for the first three financial years of under the devolved governance structures.
It is alo paramount that parliament passes two critical bills that are critical for the finances to be legally channeled to the country’s 47 counties. These Bills are the Division of Revenue Bill and the County Revenue Allocation Bill and they must be passed at least two months before the end of each financial year.
The first of the two Bills deals with sharing revenues between the national and county governments, while the latter relates to the sharing of revenue among the counties throughout the country.
The Commission for the Revenue Allocation also recommended that the Equalisation Fund which translates into 0.5 per cent of the total revenue of the national government should be disbursed from the financial year 2013/2014 at which time it is expected that the county governments will be functioning.
The other proposal on the commission’s raft that there should be funds set aside for the 2011/2012 as well as 2012/2013 financial years which should be rolled over to spill into the 2013/2014 financial year.
Some of the most critical sectors targeted as key beneficiaries to these proposed allocations the improvement of water, education, health services, energy provision and the rural access roads network.