Why counties will wait longer for money from the Exchequer
The National Treasury building in Nairobi.
What you need to know:
- Senators want counties to be given Sh400 billion as shareable revenue while MPs have proposed Sh380 billion.
- The government was banking on the passage of the Bill to raise Sh347 billion in the financial year 2024/2025.
Counties will continue to face cash crunch as both Houses of Parliament head to mediation in a bid to reach an agreement on the amount that counties should share under the Division of Revenue Bill, 2024.
However, with the National Assembly proceeding for its short recess beginning Monday next week until November 5, the cash crunch in counties is set to get worse as both Houses have to pass the Bill in case the mediation committee comes up with an agreeable amount.
Clerk of the National Assembly Samuel Njoroge said if the mediation committee comes up with an agreeable version, then MPs can be called for a special sitting to pass the Bill for onward transmission to the President for assent.
Senators want counties to be given Sh400 billion as shareable revenue while Members of the National Assembly have proposed Sh380 billion for the evolved units leading to a clash between the two Houses.
In sticking to the Sh380 billion, the National Assembly argued that the revenue projection of Sh346 billion which was to be collected had the Finance Bill, 2024 been passed is now not available hence the reduction of money promised to counties by Sh20 billion.
The government was banking on the passage of the Bill to raise Sh347 billion in the financial year 2024/2025 to plug the deficit on the government’s Sh3.92 trillion
Article 203 (2) of the constitution guarantees county governments an equitable allocation of a minimum of 15 percent of all national revenue based on the most recent audited accounts of national revenue received as approved by the National Assembly.
Majority leader Kimani Ichung’wah appealed to Senators to approach the mediation committee soberly so that money can be released to counties.
“I want to urge senators to come to the negotiating table with a sober mind bearing in mind the reality of the country’s economic situation,” Mr Ichung’wah said.
While the law requires the Bill to be enacted by June 10 or before commencement of the next financial year, four months into the new financial year it is yet to be passed by MPs.
In 2019, the National Assembly tried to cure the situation when it came with the Public Finance Management (Amendment) Bill, 2019 that would have allowed counties to access the 15 percent pending the passage of the Division of Revenue Bill in the event it is not enacted before the commencement of the next financial year.
Although passed in the National Assembly, the Bill was rejected at the Senate which argued that it was an attempt by the national government to deny counties money.
Having rejected the proposed amount from the Bill has now been subjected to a mediation committee in a bid to hammer a deal and unlock billions National Treasury owes to counties since August this year.
Mediation is a process by which the Houses of Parliament attempt to build a consensus and concurrence on contended provision of a Bill or the entire Bill whose passage requires consideration by both Houses with the intention of developing an agreed version of the version that can be passed by both Houses.
The mediation committee comprises of equal number of members drawn from both Houses.
A Bill may end up in mediation if one House disagrees with the version or amendments made by either one of the Houses.
Both Houses have the power to consider Bills concerning counties hence such a Bill whenever is passed by the National Assembly, it has to be sent to the Senate for concurrence and vice versa.
A Bill concerning counties passed by the National Assembly is sent to the Senate through a message conveyed by the speaker.
The Senate in consideration of such a Bill may pass it without amendments, pass with amendments or reject it.
In instances where the Senate passes a Bill emanating from the National Assembly without amendments, then it will be transmitted to the President for assent. However, if the Senate makes amendments to the Bill, the changes are referred back to the National Assembly for consideration.
According to Article 112 of the constitution, the mediation committee is expected to come with an agreeable version of the contested within 30 days which starts counting on the day the committee holds its first sitting.
The committee normally focuses on the contested areas of the Bill and other provisions.
However, if the committee fails to reach an agreement within the 30 days, the Bill is deemed to have been defeated and may be re-published later in the same or amended form and re-introduced for consideration.
