The Intergovernmental Budget and Economic Council (IBEC) has urged governors to bear with the Ksh20 billion budget allocation cut occasioned by the withdrawal of the Finance Bill 2024.
In a communique on Monday, August 26, 2024, IBEC, which is chaired by Deputy President Rigathi Gachagua, urged counties to restructure their finance bills accordingly.
“Though County Governments raised concerns with the reduction of shareable revenue by Ksh20.1 billion from Ksh400.1 billion to Ksh380 billion, it was noted that with the exceptional circumstances of FY 2024/25, and the withdrawal of the Finance Bill 2024/25, there was a need for counties to appreciate the need for a variation of the DORA (Division of Revenue Act) and restructure their respective Finance Bills accordingly. The Council of Governors requested that they be allowed to engage the Senate on the matter,” the communique read in part.
IBEC has also revealed that the National Treasury has committed to disburse approximately Ksh10 billion annually of the arrears owed to counties in terms of equalization funds beginning the 2024/25 financial year.
IBEC recommendations
IBEC also recommended that the Commission on Revenue Allocation in consultation with the National Treasury the Ministry of Tourism Kenya Wildlife Service, the Council of Governors, IGRTC and the Executive Office of the President finalize the implementation of the presidential Directive on 50/50 revenue sharing from the national parks with counties hosting the Parks.
In agriculture, the council resolved that there is a need for the Ministry of Agriculture to monitor the distribution of fertilizer through a multi-agency team within the supply chain and to strengthen quality assessment including restructuring communication to counties and observing efficiency and effectiveness in the whole process and the cabinet secretary for agriculture to report on the progress in the next IBEC forum.
“The Council resolved that the Ministry of Agriculture develops a policy framework to support the agriculture sector that includes farm input subsidies, and this should involve county governments and key stakeholders,” the communique added.
It was also agreed that the Office of the Deputy President convenes a consultative meeting between the governors, Kenya Revenue Authority, the National Treasury and the Commission on Revenue Allocation (CRA) to resolve matters VAT on counties own source revenue.
IBEC also urged the National Treasury to release all funds for the construction of county headquarters, library services, court fines, County Aggregation and Industrial Park (CAIPs), museums and mineral royalties.
The Council resolved that the National Treasury disburse equitable shares using the Public Financial Management (PFM) provision on a 50 per cent vote on account. The National Treasury will disburse amounts for July and August in early September.
