The Commission on Revenue Allocation (CRA) has firmly opposed the proposed cut in equitable shares for devolved units, arguing that reducing the allocation from Sh400 billion to Sh380 billion for the current financial year is unjustifiable.
CRA Chairperson Mary Chebukati stated that national revenue projections are expected to rise from Sh2.23 trillion in the previous financial year to Sh2.6 trillion this year.
“The National Government allocation should remain at Sh2.194 trillion while counties receive their share of shareable revenue,” she told the Senate Finance Committee, chaired by Mandera Senator Ali Roba.
Chebukati emphasized that the national revenue is projected to reach Sh2.602 trillion in 2024/25, making the proposed allocation of Sh379.12 billion for counties reasonable. “There is no justification to reduce the county allocation,” she asserted.
The CRA Chairperson warned that the proposed reduction in the Division of Revenue (Amendment) Bill 2024 could negatively impact service delivery in devolved units.
In response, the Council of Governors (COG) rejected the proposal to cut the equitable share from Sh400 billion to Sh380 billion, citing budgetary constraints. COG Vice Chairman Ahmed Abdullahi criticized the Finance Bill 2024, which aims to slash the county budget by Sh20 billion, calling it unsustainable.
Abdullahi urged senators to advocate for the full Sh400 billion allocation in the Division of Revenue Bill 2024, stressing that any reduction would severely impact service delivery in the counties. “The current situation does not warrant extra-constitutional measures like reducing counties’ equitable share. COG is entirely opposed to this proposal,” Abdullahi said.
Makueni Governor Mutula Kilonzo argued that the equitable share should be based on the last audited accounts approved by the National Assembly, not on projected revenue. He referred to Section 39 (3) of the Public Finance Management Act, which states that the National Assembly can only amend national budget estimates according to the Division of Revenue Act.
“Counties’ equitable share is excluded from the National Government’s Appropriation and, by extension, from the budget estimates under Article 221 (7), as it is a charge on the Consolidated Fund,” Kilonzo noted.
Kakamega Governor Fernandes Barasa highlighted additional proposed cuts to county governments’ allocations, citing austerity measures. Barasa warned that these reductions, alongside statutory remittances like housing levy deductions and payments for county health workers, would further strain county resources. “This proposed amendment exacerbates the strain on county budgets, while national government operations continue uninterrupted,” Barasa said.
