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Counties have suffered a major blow after Treasury only allocated them Sh391.1 billion against the Sh439.5 billion governors wanted as equitable share for the Financial Year 2024/25.

The Division of Revenue Bill (BORB) sponsored by Budget and Appropriations Committee (BAC) chairperson and Kiharu MP Ndindi Nyoro proposes that the total sharable revenue for the two levels of government be put at Sh2.948 trillion out of which the National government will get Sh2.54 trillion, Equalization Fund Sh7.86 billion and counties Sh391.1 billion.

Allocation is, however, an increase of Sh16.6 billion from Sh374.5 billion allocated in the 2023/24 Financial Year. National Treasury has equally been pushing for the of Sh391 allocation.

“Bill proposes to allocate county governments Sh391.1 billion for the Financial Year 2024/25 as equitable share of revenue raised nationally, which is an increase from a base of Sh374.5 billion allocated in the Financial Year 2023/24,” the bill.

However, the Sh374.5 billion is an adjustment `from the initial Sh385.4 billion counties had been allocated following a National and County Governments coordinating summit held between February 10 and 12.

The summit resolved that the Road Maintenance Fuel Levy (RMFL) of Sh10.9 billion be netted off and transferred to counties as conditional allocations beginning Financial Year 2024/25.

Tabling of the Bill follows passage of the Budget Policy Statement that outlines the broad strategic priorities and policy goals that will guide the National and county governments in preparing their budgets. To fast track passage of the Bill, lawmakers yesterday reduced the publication period from seven to four days.

National Assembly Deputy Majority Leader and Kilifi MP Owen Baya said this will expedite debate process, owing to the fact that Treasury needs to prepare a budget while BAC needs to scrutinise the same as counties need money.

“This Bill unlocks debate on budget as well as allows the National Treasury to prepare the main budget. For us to wait for the number of days it will inconvenience very many institutions including Treasury, committee and counties,” Baya noted.

Move comes days after the Senate Finance and Budget Committee recommended that counties be allocated Sh415.95 billion in line with the projected revenue growth.

Committee argued that the devolved units are experiencing additional expenditure pressures emanating from statutory deductions.

Council of Governors (CoG) chaired by Kirinyaga Governor Ann Waiguru has been pushing for an allocation of Sh439.5 billion as equitable share to counties for the Financial Year 2024/25, while the Commission of Revenue Allocation (CRA) had recommended Sh398.14 billion.

In January, during the Intergovernmental Budget and Economic Council chaired by Deputy President Rigathi Gachagua, CoG, CRA and National Treasury failed to agree on what the sharable revenue to counties should be.

Despite the move, the Bill states that the share allocation was informed by trends in the performance of revenue, including financing constraints due to limited access to finance in the domestic and international financial markets and the low ordinary revenue collections attributed to the ongoing geopolitical shocks.

This includes the Russia-Ukraine war and the US Federal Reserve’s interest rate hike which has negatively affected the dollar exchange rate against the Kenya shilling and the international debt market.