Stalemate over revenue sharing between national, county governments

Discussions between governors and other stakeholders including the Treasury and the Commission on Revenue Allocation (CRA) regarding revenue sharing in the national and county governments have stalled.

Council of Governors (CoG) chairperson Anne Waiguru on Tuesday said the discussion was taken to the Intergovernmental Budget and Economic Council (IBEC), chaired by Deputy President Rigathi Gachagua, where no consensus was reached as to how the revenue will be shared for the 2024/25 financial year.

During January 29’s IBEC session, Waiguru noted, it was resolved that the matter be referred to a task team comprised of members from the COG, CRA and the Treasury, to further deliberate to achieve a consensus on the amount to be shared between the two levels of government.

“We however note with concern, that after lengthy discussions and analysis of the proposed recommendations by the task team, the three parties retained divergent positions on their proposed figures for shareable revenue,” the CoG chair stated.

Treasury proposes Ksh.391 billion equitable share while CRA proposes Ksh.398.14 billion.

The Council of Governors has meanwhile proposed Ksh.439.5 billion as equitable share and Ksh.10.52 billion as Road Maintenance Levy Fund (RMLF).

“In view of the foregoing and upon careful consideration of the matter at hand, the Council hereby declares a stalemate on the discussions around vertical sharing of revenue. In this regard, we urge that our proposal of Ksh.450 billion to Counties be adopted,” said Waiguru.

The governors maintain that county governments are cushioned from the rising cost of inflation across various devolved sectors, the rising operations and maintenance cost in counties and the need for a commensurate adjustment for revenue growth.

They also back their proposed figure with the need for the provision of an allocation towards county employees’ annual salary incremental cost and allocation to factor in emerging items that will occasion additional expenditure by counties.

These include the new mandatory National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF) and Housing Levy contributions.

“We therefore call upon the national government to reconsider their position in view of the aforementioned budgetary items. This will allow counties to execute their mandate and ensure efficient service delivery on their assigned functions,” added Waiguru.