Treasury cuts counties cash to Sh217.9bn

Politics and policy

The Treasury Building in Nairobi. FILE 

By EDWIN MUTAI

In Summary

• The Constitution provides for a revenue allocation of at least 15 per cent of the national budget.
• Governors have been pushing for increased allocation of at least 40 per cent of national taxes or a minimum of Sh238 billion to meet the needs of their governments.

 

County governments will share Sh217.9 billion if Parliament approves the Division of Revenue Bill that was introduced in the House on Thursday, setting the stage for a standoff with governors.

The Treasury also allocated the 47 counties a further Sh8.2 billion as conditional grants to be used in financing rural electrification, Level Five hospitals and youth polytechnics, bringing the total allocation to counties to Sh226.66 billion.

The Sh217.9 billion falls short of the Sh230 billion that the Commission on Revenue Allocation says is the bare minimum required to finance operations of the devolved governments in the financial year ending June 2015

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Governors have been pushing for increased allocation of at least 40 per cent of national taxes or a minimum of Sh238 billion to meet the needs of their governments.

The Constitution provides for a revenue allocation of at least 15 per cent of the national budget.

“The last audited revenues approved by the national assembly are those of 2009/10. Based on these revenue figures, the allocation to counties is 43 per cent,” read the Bill, published by Majority leader Aden Daule.

“The Bill considers the provision that revenue allocation to the counties should be at least 15 per cent of nationally raised revenue calculated on the basis of the last audited accounts in line with Article 203 of the Constitution.”

READ: Senate wants revenue allocation to counties raised to 40pc

The Bill allocated Sh3.65 billion for rural electrification, Sh3.74 billion for Level Five hospitals and Sh1.4 billion for construction and upgrading of youth polytechnics.

The national government will be allocated Sh799.6 5, with the Equalization Fund taking Sh3.4 billion. Each of the 290 constituencies will receive Sh5 million for completion of centres of excellence under the economic stimulus package.

The Bill acknowledges difficulties in determining the actual amount of money to be allocated in the absence of information on the real cost of functions at each level of government.

The Constitution requires stability and predictability of revenue, observance of fiscal austerity and fostering of cordial relationships be observed.

The public debt will consume Sh414.4 billion for the year to June 2015, up from the current Sh381.5 billion.