County governments will receive a total of Sh387 billion in the current fiscal year, following a successful mediation between the Senate and the National Assembly.
The agreement, reached after weeks of tense negotiations, provides a Sh2 billion increase over the previous financial year’s allocation, offering much-needed relief to devolved units.
Mandera Senator Ali Roba, who co-chaired the mediation committee along with Kiharu MP Ndindi Nyoro, confirmed the breakthrough.
“The figure we have agreed upon is Sh387 billion as the mediated position for county governments,” Roba said, after a stormy session that saw journalists removed from the room.
The mediation came after a lengthy standoff between the Senate and the National Assembly, both of which had differing views on the allocation.
Senators had proposed a figure of Sh400.1 billion, while MPs had insisted on Sh380 billion. The mediation team, comprising 18 members, worked tirelessly to bridge the gap between the two sides.
The new allocation will ensure that counties avoid a potential cash crisis, which had loomed due to delays in passing the Division of Revenue Bill. “This mediation reflects our shared commitment to the success of devolution,” Roba added.
The Division of Revenue Bill is crucial as it determines how revenue generated at the national level is divided between the national and county governments.
The agreement to allocate Sh387 billion was reached after both sides made concessions, keeping in mind the country’s economic realities and the additional financial burdens counties will face this year.
Nyoro, who also chairs the National Assembly’s Budget and Appropriations Committee, noted that the decision took into account the economic climate, new levies in healthcare, and the housing levy, which both employers and employees are now required to contribute.
He also highlighted that the absence of the Finance Bill in this financial year made the mediation even more critical.
“The situation this year is extraordinary, and we wanted to ensure that counties had sufficient funding to continue their operations smoothly,” Nyoro said.
The agreement sets the stage for the passage of the revised Division of Revenue Bill, 2024, and the County Allocation of Revenue Bill, 2024, paving the way for the swift disbursement of funds to county governments.
The President had initially rejected the first Revenue Bill after the Finance Bill was withdrawn, adding further complexity to the situation.
With this mediation now concluded, the country can look forward to the smooth implementation of devolution, which remains a critical pillar of Kenya’s governance framework.
