Several county governments are set to lose billions of shillings in shareable revenue from the National government during this financial year as President William Ruto moves to enforce budget cuts following the collapse of the Finance Bill 2024.
Counties set to lose millions in the revised allocations proposed by President Ruto include Nairobi, Kiambu, Turkana, Bungoma, Mandera, Nakuru, Kilifi, Marsabit, Murang’a and Trans Nzoia.
Ruto, in a Presidential Memorandum which was communicated to the House last Thursday, wants senators to amend the County Allocation of Revenue Bill 2024, (CARA) to reduce the share due to counties from Sh400.1 billion to Sh380 billion for this financial year.
Plugging the hole
Should the President have his way, the 47 county governments will collectively lose Sh20 billion, is geared towards plugging the hole in the national budget occasioned by the President’s refusal to assent to the controversial Finance Bill 2024 following weeks of protests spearheaded by the Generation Z.
The new figure is Sh5 billion less than the Sh385 billion the county governments received in the last financial year.
“In exercise of the powers conferred on me by Article 115(1) (b) of the Constitution, I decline to assent to the County Allocation of Revenue Bill, 2024 and refer the Bill for reconsideration by the Senate. I recommend that the Bill be amended by deleting the First Schedule and replacing it with a Schedule as shown in the Memorandum,” reads part of the Presidential memorandum.
The Presidential Memorandum seeks to do away with the First Schedule of the Bill as approved by Parliament, which contains allocations due to each of the 47 county government’s equitable share of revenue from the national government.
According to the revised schedule attached to the Presidential Memorandum, Nairobi county stands to lose up to Sh1.1 billion.
Instead of the Sh20.9 billion that it was set to receive, Nairobi will now receive Sh19.8 billion.
Turkana county will on the other hand lose up to Sh700 million, receiving Sh12.95 billion as opposed to the initial allocation of Sh13.63 billion.
Kiambu County, which was initially allocated Sh12.71 billion will now receive Sh12.04 billion while Mandera county will receive Sh11.47 billion, Sh600 million less than its initial allocation.
In the revised estimates, Nakuru county stands to lose more than Sh750 million, from the initial Sh14.13 billion allocation to the revised Sh13.39 billion. Bungoma county, which was poised to receive Sh11.54 billion in the Bill as passed by the Senate will now receive Sh10.95 billion, a difference of Sh750 million.
Should the president have is way, Kilifi county which was allocated Sh12.5 billion will now lose Sh600 million, only receiving Sh11.9 billion.
Marsabit county, which was to receive Sh7.8 billion has now been allocated Sh7.4 billion, a Sh400 million reduction, while Trans Nzoia which was to receive Sh7.79 billion will now receive Sh7.3 billion, also losing a similar amount. Muranga which was set to get Sh7.7 billion is likely to lose Sh400 million as it is allocated Sh7.3 billion in the revised estimates.
Paul Otuoma’s Busia county, which was to receive Sh7.76 billion will have to make do with Sh7.3 billion in the new proposals, while Nandi county which was to receive Sh7.6billion is set to lose Sh500 million, ending up with Sh7.1 billion.
James Orengo’s Siaya county which was set to receive Sh7.5 billion will now receive Sh7.1 billion, a Sh400 million reduction if senate accedes to the president’s proposals.
The reductions in the county revenues are likely to affect the operations of county governments in this financial year.
In the Bill passed by the House, the 47 county governments were to share Sh400.117 billion for the 2024/25 in equitable share revenue as provided for in the Division of Revenue Act, 2024.
In refusing to sign it into law, the President cited the failure to enact the Finance Bill, 2024 which has necessitated the re-organization and rationalisation of the Government’s financial arrangements in the current financial year.
The President argues that the reduction is necessitated by the re-organisation and rationalisation of the Government’s financial arrangements for 2024/25 financial year, citing the failure to enact the controversial Finance Bill, 2024.
However, a section of the Senators are poking holes in the Presidential memorandum, charging that it is the parent DORA law that should first be amended to reduce the Sh400.1 billion and not the disbursement schedules.
A fierce debate is likely to ensue on the presidential memo with some Senators questioning the rationale of the President’s refusal to sign the CARA Bill when he has already assented to the Division of Revenue Bill, 2024, which is already a law.
Senate majority Whip Boni Khalwale (Kakamega) questioned what would necessitate the Allocation Bill to be returned if the Revenue Bill has been assented to, adding that they swore to uphold and defend the Constitution and the rule of law.
