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A plan to slash by Sh5 billion allocation to the devolved units in the current financial year could open a new battle front between the National government and the Council of Governors (COG).

This comes as Senators and the county chiefs opposing the move charged that it is both unconstitutional and an affront to devolution.

Parliament allocated the devolved unit Sh400.1 billion following mediation between the two houses, but the Treasury intends to reduce this to Sh395 billion, triggering an uproar.

CoG Chair Anne Waiguru (Kirinyaga) called on the National Treasury to retain the allocation to the devolved units as contained in the Division of Revenue Act 2024.

“We therefore wish to state unequivocally that the Council rejects this proposal in totality and demands that the National Treasury retain the county equitable share as enumerated in the Division of Revenue Act, 2024,” said Waiguru.

Unilateral decision

Waiguru argued that the constitution provides that the county governments do not suffer in the event of cash flow challenges by the Kenya Revenue Authority (KRA).

The uproar comes after the National Treasury informed parliament about its intention to fundamentally cut both national and county government budgets by Sh200billion with the withdrawal of the Finance Bill, 2024.

“This unilateral decision not only undermines the spirit of devolution but also jeopardises the essential services delivered to millions of Kenyans,” charged Waiguru.

Governor Anyang Nyong’o (Kisumu) said the reduction is a scheme to kill devolution, adding that any reduced funding to counties would amount to a travesty of justice on devolved governments whose share of revenue is based on the audited national accounts.
“How can the President purport to base the failed Finance Bill on the division of revenue allocations, which are calculated on a budget of three years ago?” posed Nyong’o.

Breach of law

Johnson Sakaja (Nairobi) said that no amendment can be made to the Division of Revenue Bill which has already been signed by the President, adding that reducing county allocation would be a breach of the law.

The Division of Revenue Bill splits the spending between the national and county governments.

The objective of the Division of Revenue Bill 2024 is to provide for the vertical sharing of revenue raised nationally between the National and County Governments for the financial year 2024/25 in accordance with Articles 202 (1) and 218 of the Constitution.

“The law is very clear that where there is a shortfall, the national government will bear,” said Sakaja.

During public participation before the passage of the Division of Revenue Bill 2024, Governors argued that the projected ordinary revenue is set to grow by 15 percent, demanding that Counties should be allocated Sh439.5billion.

However, after a mediation between the National Assembly and the Senate, the members agreed that the Counties be allocated Sh400.1 billion.

The amount marked an increase allocation from the last financial year 2023/2024 equitable share of revenue allocation to county governments which was Sh385.4 billion.

The Division of Revenue Bill added an additional Sh14.6 billion to county governments.

“The Sh346 billion (lost in the now withdrawn Finance Bill) out of the Sh3.9 trillion budget is nine percent, at least at the national level. I would not wish that the same be applied to our counties, which must be on an equity basis,” added Sakaja.

Senators, while supporting the County Chiefs in opposing the budget cuts were categorical that the Treasury’s sweeping budget cuts should not apply to the counties.

Unconstitutional offices

Senate Majority Whip Boni Khalwale (Kakamega) instead called for the abolition of unconstitutional offices that are a burden to taxpayers.

Khalwale singled out offices of the First Lady, Spouse of the Deputy President, Spouse of the Prime Cabinet Secretary, and county first ladies as unconstitutional offices gobbling millions of money.

“Those are private family issues that should never be brought to the public,” Khalwale said.

Senator Enoch Wambua (Kitui) asked the state to cut down the government excesses instead of reducing the budget for counties.

“If you multiply Sh30 million by 290 constituencies, that is Sh8.7 billion. That money should be going to counties as part of the equitable share. There was no reason why the MPs added themselves Sh30 million for CDF. What for?” posed Wambua.

In addition, Mohammed Chute (Marsabit) asked the President to protect and support the counties to deliver services to Kenyans.

“The President should support the county governments. The county governments should also stop their excesses,” he said.