Counties risk losing Ksh. 20 billion after Ruto's memoranda to Senate

As per the memorandum, the president proposes to amend the Country Allocation of Revenue Bill (CARA) by reducing monies meant for counties to Ksh. 380 billion which will be Ksh. 5 billion less than what they received in the last financial year.

The County Allocation of Revenue Bill, an annual law that provides for the equitable allocation of revenue raised nationally among the 47 counties, was passed by the Senate on June 11, 2024 with concurrence of the National Assembly on June 25.

In the original Bill passed by the House, the 47 County Governments were to share Ksh.400.117 billion for the 2024/25 in equitable share revenue as provided for in the Division of Revenue act (DORA) 2024, but the President says the reduction is necessitated by the reorganization and rationalization of the Government's financial arrangements for 2024/2025 financial year

“This includes the County Allocation of Revenue Bill, 2024, to accommodate the anticipated revenue reduction that would have been collected had the Finance Bill, 2024 come into force,” says the President in his memorandum, which has since been committed to the Committee on Finance and Budget.

The memorandum has elicited sharp reactions from Senators with some claiming the President can not amend the County Allocation Revenue bill without amending the Division of revenue bill that divides money vertically between the National Government and the county governments. 

“What would necessitate the Revenue Allocation Bill to be returned if the Revenue Bill has been assented to?” asked Majority Whip Boni Khalwale, reiterating that the allocation Bill flows from Division of Revenue Bill.

“How can the allocation Bill be invalidated? I say this because we are very conscious of the fact that our counties are constrained. The manner that we were able to give the counties Sh400 billion, many Senators believe it should remain there," he said.

“We swore to uphold and defend the Constitution and, therefore, the rule of law.” 

“How can you amend county allocation revenue bill without amending the division of revenue bill? It’s impossible, in fact the President has no role in how counties share their sharable revene," said Nairobi Senator Edwin Sifuna.

“We have vowed as a senate that counties will not lose even a single penny from what we passed as a senate," he added.

Kisii Senator Richard Onyonka, who is also a member of the budget and finance committee that is processing the President’s memorandum, says the committee will throw the ball back to the senate to make the necessary decision.

“We want to bring the issue back to the plenary, so that Kenyans will see which senator is fighting for devolution as which one will be a rubberstamp of the executive," he said.

Nairobi County will lose up to Ksh1.1 billion if the lawmakers concur with the President. Instead of the Ksh20.9 billion that it was set to receive, Nairobi will now receive Ksh19.8 billion. 

Bungoma County was to receive Ksh.11.54 billion in the Bill as passed by the Senate but will receive Ksh.10.95 billion, a difference of Ksh.750 million, Turkana has lost out more than Sh700 million. It was set to receive Ksh.13.63 billion it will now receive Ksh.12.95 billion. 

Kiambu County will lose more than Ksh.600 million. From the Ksh.12.71 billion, it will now receive Ksh.12.04 billion, Mandera County will receive Ksh.11.47 billion, Ksh.600 million less than what Senate had allocated, while Nakuru County has lost out on more than Ksh.750 million. It was to receive Ksh.14.13 billion but will now get Ksh.13.39 billion.

The Budget and finance committee is expected to table its report to the House on or before Thursday, July 18, 2024