Loopholes in devolution model must be sealed

What you need to know:

  • The Constitution provides that counties should be allocated a minimum of 15 per cent of audited government revenues.
  • Each will get a similar amount of money that was allocated in the last financial year.

Finally, the Senate has resolved the long-standing dispute over the Bill on revenue share among counties. It has been weeks of acrimony, high-voltage politics and machinations as the Senate debated the revised formula on revenue allocation that was prepared by the Commission on Revenue Allocation (CRA). Vote on the Bill flopped a record 10 times due to the intrigues.

During that time, counties were thrown into deep financial crisis. This week, several counties shut down and stopped services, occasioning untold pain to residents.

The deal that has been struck is being touted as win-win for everyone because no county will lose any cent. Each will get a similar amount of money that was allocated in the last financial year. That is good news. Also, the Senate went ahead to etch into the Bill provisions that will protect counties in the next financial year, basing its proposal on a pledge by President Uhuru Kenyatta early this week, to increase the allocation to counties by Sh50 billion.

But all these mask a far deeper problem. The Constitution provides that counties should be allocated a minimum of 15 per cent of audited government revenues. Ideally, the allocations to counties should rise in commensurate terms with the national budget and economic growth.

Even so, challenges exist. First, although the allocation has been pegged above the constitutional threshold, it is calculated based on old revenue figures. This is because of backlog in auditing government revenues. And this explains why, whereas national budgets keep increasing every year, allocations to counties stagnate.

Second, the row over the new formula exposed CRA’s underbelly; it does not consult properly. Third, counties were expected to generate own incomes so that they do not wholly rely on the Exchequer. They have not.

The lesson is that we have to rethink models for making devolution work.