Give us money promised by BBI, governors now say

The demand follows a decision by the Commission on Revenue Allocation (CRA) to keep total disbursements at Sh370 billion for the 2022/23 fiscal year though revenues are projected to increase.

CRA said the additional revenue will be better used to pay off Kenya’s rising public debts so as to reduce the fiscal deficit, ease pressure on the exchequer and free funds for next year’s elections.

The national shareable revenue for FY2022/23 is projected to increase by Sh366.4 billion to Sh2.142 trillion, up from Sh1.776 trillion this year.

But governors are demanding Sh751.45 billion, as proposed by the failed Constitution of Kenya Amendment Bill, 2020, which sought to raise the minimum allocation from the current 15 percent to 35 percent of national revenue. 

This position, they argue, was supported by 45 county assemblies that passed the bill.
The Court of Appeal in August upheld a High Court ruling that stopped the proposed changes, declaring them illegal and unconstitutional. 

“Further, this position is buttressed in the Constitution of Kenya Amendment Bill, 2020, which recommends that counties be allocated not less than 35 per cent of all the revenue collected by the national government,” said Ndiritu Muriithi, chair of the finance committee of the Council of Governors.

“As such, the Council of Governors emphasises an upward increase of the County Equitable Share to Sh751.45 Billion.” 

He said this was supported by President Uhuru Kenyatta and ODM leader Raila Odinga and passed in both Houses of Parliament and in 45 county assemblies.

The governors say denying them an increase as their spending is increasing will disrupt services to citizens at the grassroots, which they argue is key to stimulating economic growth.  

While counties can restructure their spending in order to stimulate economic growth, Mr Muriithi said, “debt sustainability and the upcoming General Election should not be cited by CRA as a basis for revenue sharing to hamper adequate funding and service delivery to ‘mwananchi’ at the lowest level of governance”.

The latest protests from governors come after they failed at a consultative meeting last month to prevail upon CRA to raise their equitable revenue share for next year.

After the meeting, governors said their revenues should be increased and any shortfalls be borne by the Treasury as is the norm to free more resources for spending in the devolved regions.

If the CRA proposals are adopted, counties will need to get creative to find alternative means of plugging financing deficits as their recurrent and development expenditures are rising.  

Data from the Controller of Budget shows counties increased their annual spending by 135 per cent to Sh398 billion in the year to June, up from Sh169.4 billion in FY2013/14, the first year of devolution.

In the seven-year period, spending by counties on salaries, wages, travel and operations more than doubled to Sh281.9 billion from Sh132.8 billion, while spending on development programmes rose more than three times from Sh36.6 billion to Sh116.1 billion.