The deadlock on the sharing of revenue between the national government and the counties is a crisis that needs to be quickly resolved. Of course, the counties continue to be shortchanged as many devolved functions are still being withheld by the national government.
Last June, President William Ruto promised that the pending devolved functions would be transferred within two months and even established a committee to spearhead it. However, there is no indication of any progress towards that goal. As a result, resources that should be under the control of the counties are unavailable.
The latest bone of contention is what is known as the vertical sharing of revenue between the national and county governments in the 2024/2025 financial year. This is what provides the basis for the equitable sharing of the revenue raised nationally. The National Treasury has proposed that the counties receive Sh391 billion. For its part, the Commission on Revenue Allocation (CRA) wants the counties allocated Sh398.14 billion.
However, the Council of Governors (CoG) says the equitable share to the counties should be Sh439.5 billion. They are also pushing for Sh10.5 billion as the Road Maintenance Levy Fund. A task force comprising representatives of the CoG, the CRA, and the National Treasury has failed to reach a consensus on the sharing of the revenue between the two levels of government.
CoG chairperson Anne Waiguru, who is the Kirinyaga Governor, says the negotiations have hit a deadlock, raising concern about the impact on the delivery of vital services and the implementation of projects. The county bosses have every reason to get alarmed as the government’s National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF), and the Housing levy deductions are going to hugely increase expenditure.
In other words, if the counties settle for less than their rightful share, they will find themselves hamstrung and unable to deliver on their mandates. The CoG also feels counties should be cushioned against the rising cost of inflation across the devolved sectors. This is a key issue that calls for serious consultations to enable the counties to fully execute their mandate and ensure efficient delivery of key public services.