A drive to reduce the Sh316.5 billion allocated to counties in equitable share over an expected dip in revenues due to the coronavirus pandemic failed as the National Assembly approved the 2020 Division of Revenue Bill.
The bill, which outlines how to share revenue between the national and county governments, now goes to the Senate.
If the Senate adopts the proposals, they will be sent to President Uhuru Kenyatta, whose assent is required before they become law. But if the Senate amends them, they will proceed to a mediation panel of both Houses.
ROAD MAINTAINANCE
Under the proposals, Sh1.53 trillion will go to the national government; Sh316.5 billion to counties; Sh13.73 billion in conditional grants from the government; Sh9.43 billion for road maintenance; and Sh6.53 billion for the Equalisation Fund.
The allocations are based on the Sh1.357 trillion in audited accounts of the 2016/17 financial year as approved by the National Assembly last year.
“We are safely within the minimum of 15 per cent provided for in the Constitution,” said Kikuyu MP Kimani Ichung’wah, who chairs the Budget and Appropriations Committee that considered the bill.
Mr Ichung’wah, however, warned that the coronavirus now ravaging the world “will hit us hard in terms of revenue projection for this year and the next financial year”.
This prompted National Assembly Majority Leader Aden Duale to urge lawmakers to cut the allocation to counties.
HONEST DECISION
“Why do we want to cheat ourselves? This is a House that must make honest decisions. We must have an amendment to reduce the Sh316.5 billion allocated to counties,” he said.
“You can’t give what you do not have. Let us face the reality that you are giving someone money that you have not raised,” he said, adding that the Covid-19 pandemic will hit projected revenues.
But Minority Leader John Mbadi and MP Amos Kimunya opposed the proposal, arguing that while there may be a shortfall in revenues, that is not a good reason for slashing money allocated to devolved regions.
STIMULATE ECONOMY
“We may face a shortfall in revenue, and that is something to worry about if [the coronavirus] is pronounced for a long duration.
“The Treasury should tell us how we will stimulate the economy,” Mr Mbadi said. Mr Kimunya urged his colleagues to pass the bill in its current form.
“Let’s pass the bill as it is so that it is not seen that the National Assembly is starting a premature fight with the Senate, the Treasury and counties. Otherwise, we will end up with a prolonged mediation,” he said.
Article 219 of the Constitution cushions allocations to counties. It states that once the National Assembly and the Senate have appropriated money, it cannot be reduced.
Any shortfall in revenues would be absorbed by the national government, meaning the budgets of the Executive, Parliament and Judiciary will have to be reorganised.