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Counties will have to wait longer to access shareable revenue as senators and MPs are headed for talks to try and resolve the current impasse over President William Ruto’s proposals to slash the sharable revenue by Sh20 billion from Sh400.1 billion to Sh380 billion.

The senators and Members of the National Assembly agreed to form an 18-member committee to try and unlock the stalemate which arose after senators rejected the decision by the National Assembly and insisted that counties should get Sh400 billion that was in the original Division of Revenue bill despite their counterparts from the National Assembly supporting the reduction.

The members from the senate to sit in the mediation team include senators Edwin Sifuna (Nairobi), Mohamed Faki (Mombasa), Richard Onyonka (Kisii), Eddy Oketch (Migori), Ali Roba (Mandera) and Julius Murgor (West Pokot), Veronica Maina (nominated), Wahome Wamatinga (Nyeri) and Danson Mungatana (Tana River).

The representatives from the National Assembly include Budget and Appropriations committee chairperson and Kiharu MP Ndindi Nyoro, Mary Emaase (Teso South), John Chikati (Tongaren), David Ochieng (Ugenya) , David Kiplagat (Soy), Otiende Amollo (Rarieda), Fatuma Jehow (Wajir County), Makali Mulu (Kitui Central), and Wilberforce Oundo (Funyula).

Mediation committee

Speaker of the National Assembly Moses Wetang’ula, appointed the nine Members of the National Assembly to serve in a mediation Committee following the decision of the members of the National Assembly to reject recommendations from the senate to maintain the shareable revenue.

Said Wetangula: “Honourable Members, as you are aware, on Wednesday, 16th October 2024, the House rejected the Motion on consideration of the Senate amendments to the Division of Revenue (Amendment) Bill 2024 essentially committing the Bill to mediation as in accordance with Article 112 of the Constitution and Standing Order 149.”

On the other hand, senate speaker Amason Kingi named the nine members after he received the message from the National Assembly rejecting the amendments by the senate.

He said: “The Speaker (Hon. Kingi): Hon. Senators, I wish to report to the Senate that I have, pursuant to Standing Order No.46(3), received the following Message from the Speaker of the National Assembly regarding the decision of the National Assembly on the Senate amendments to the Division of Revenue (Amendment) Bill (National Assembly Bills No.38 of 2024). The Message, dated Tuesday, 22nd October, 2024, was received in the office of the Clerk of the Senate on Wednesday, 23rd October, 2024. Pursuant to Standing Order No.46(4), I now report the Message.

Standing order

And added: “Now therefore in accordance with the provisions of Article 112 of the Constitution and Standing Order Nos.41(1) and 148(b) of the National Assembly Standing Orders, I hereby convey the said decision of the National Assembly to the Senate and seek the appointment of nine Senators to a Mediation Committee to consider the Bill in accordance with Article 113 of the Constitution.

The formation of the mediation team follows the decision of the senate to reject Ruto’s proposal. A record 28 senators voted to retain the Sh 400 billion that was in the original bill despite their counterparts from the National Assembly supporting the reduction. No senator opposed the bill.

The Sh400.1 billion is a figure that senators agreed with the National Assembly during mediation as they had initially proposed a figure of Sh415 billion as the sharable revenue.

The vote came after the chairperson of the Committee on Finance and Budget and Mandera Senator Ali Roba moved amendments retaining the sharable revenue at Sh400.1 billion but proposed a reduction of total sharable revenue in the National Government from Sh2.6 trillion to Sh2.2 trillion.

He said: “The meaning of downwards revision of projected ordinary revenue means that we have deleted the proposal that would have seen both counties and National Government bearing the brunt whenever there is a shortfall because this proposal is not tenable. We have only proposed a reduction of the National Government sharable revenue from Sh2.6b to Sh2.2b while maintaining the sharable revenue at 400.1 billion as passed by initial Division of Revenue bill.”

Finance bill protests

Ruto in July proposed a reduction of Sh 20 billion in the 2024/2015 financial year after he rejected assent to the Finance Bill following the anti-finance bill protest staged by youths calling Generation Z.

In a communication to parliament, Ruto declined to assent to the County Allocation of Revenue bill and sent it back to the house for consideration.

The Bill was presented for Presidential Assent on June 28 but Ruto declined citing the failure to enact the Finance Bill, 2024 which he said necessitated the re-organization and rationalization of Government’s financial obligation for the financial year 2024/2025.

“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 the Bill be amended by deleting the First Schedule and replacing it with a Schedule that is attached to the Memorandum,” reads the Presidential memorandum

Last month while appearing before senators, National Treasury Cabinet Secretary John Mbadi said that the reduction of Sh20 billion as proposed in the Division of Revenue (Amendment) Bill, 2024 was occasioned by the fact that the projected revenue raised nationally for the financial year 2024/25 dropped significantly by Sh 346.00 billion from Sh 2,948.12 trillion to Sh 2,602.12 trillion due to the revised revenue raising measures.

He claimed that the country has no money and thus Kenyans must either start living within their means, cut expenditure as well as collect more revenues.

Already he said in the last two months the country has under collected by about Sh18.5 billion which clearly shows that it will be hard to meet the targets agreed upon.

He said: “In order to bridge the financing gap of Sh316.72 billion as well as enable the National Government to provide resources towards critical expenditure areas, it is proposed that Sh2,243.42 billion is allocated to the National Government, while Sh380.00 billion is allocated to County governments. This translates to 93.64 percent of the shortfall being borne by the National Government while counties bear 6.35 percent of the shortfall i.e. Sh296.60 billion and Sh20.11 billion respectively.”