MWENDA: Public has a say on revenue sharing plans

Letters

LETTERS: Public has a say on revenue sharing plans

Monday, February 25, 2019 20:06

By KENNEDY MWENDA |

The Commission on Revenue Allocation (CRA) has commenced a nationwide public consultation requesting for submissions from stakeholders, civil society groups and the general public on the proposed third basis for revenue sharing among county governments.

It goes without saying that public participation remains a fundamental constitutional right under the new democratic dispensation. In addition, this period offers the commission an opportunity engages the citizens in technical policy discussions in a structured manner that generates a greater societal reflection. The process of coming up with an acceptable allocation formula requires effective engagement with various stakeholders as well as technical experts.

This, however, does not preclude Kenyans from voicing their concerns as well as their input on what they believe is the appropriate way of revenue sharing.

You cannot underestimate the importance of the new revenue sharing basis once passed by Parliament; the new basis is expected to be utilized for the next five financial years to share revenues among counties..

The proposed Third Basis has four main objectives, the first objective is to enhance service delivery; the second is to promote balanced development. The third and fourth objectives are to incentivize counties to optimize capacity to raise revenue and promote the prudent management of financial resources, respectively. The revised formula embodies some changes from the previous formula. These changes are motivated by the need to ensure finance follows function. The wisdom behind this principle is the fact that counties need resources commensurate with their responsibilities.

Public participation offers an avenue upon which Kenyans will be informed and offer recommendations as to how they believe counties should spend their allocated funds only in respect to the functions that have been devolved.

Trust in this process matters deeply for the commission. In coming up with the revised formula, Internal and External consultation that is necessary for intellectual coherence has been done involving technocrats and experts in various field drawn from economics, accounts, political science and public governance.

The mere fact that the process is technical in nature does not preclude the process from public input. The public are the end consumers of services rendered by the county governments hence their input as pertains to the allocation and sharing of revenue cannot be ignored. It goes without saying that Devolution was conceived to provide Kenyans with a greater voice in the way they are governed.

Another significant change in the revised formula is the change in relative weights of each of the expenditure measures reflects the affordable cost of the different functions assigned to county governments. This proposed approach is meant to provide clear and transparent funding norms for different county functions and services.

The new basis has taken into consideration the importance of matching funding to expenditure needs in the counties. This is why functions such as health, agriculture, Water roads and urban services have specifically been the basis for sharing revenues.

The element of prudent management of public funds has also been factored in the third basis.

This measure seeks to incentivize counties to reap the rewards of engaging in sound financial management practices. Counties do generate internal revenues through local taxes and fees. They also receive transfers from the nationally raised revenues. Counties are required to ensure value for money when spending what they have been allocated.

For residents living in urban areas, you will agree that urban counties face unique challenges in providing services such as garbage collection, sewerage, storm water management and maintenance of transport services due to the higher number of people using them as well as to develop plans for the urban areas. This is becoming increasingly imperative due to the growing rate of urbanisation spurred by devolution. To surmise, the equitable share to county governments in financial year 2018/19 is 314 billion. In the new proposal, The commission recommends that the equitable share to county governments be increased to Kshs. 336 billion for the year 2019/20 to enhance the delivery of devolved services.

Kennedy Oliver Mwenda, communications manager, Commission on Revenue Allocation.