Counties get Sh369bn despite drop in revenue they collected
Council of Governors chairman Wycliffe Oparanya speaks at his office in Kakamega on June 3. Counties will be allocated Sh369.9 billion in the coming financial year. PHOTO | ISAAC WALE | NATION MEDIA GROUP
What you need to know:
- Conditional grants allocations amount to Sh13.7 billion, Sh30 billion being external loans and grants and Sh9.4 billion from the Roads Maintenance Levy Fund.
- Counties will have to match their budgets to the country’s revenue, said John Kinuthia, the lead research analyst at International Budget Partnership.
County governments will receive Sh369. 9 billion in the 2020/2021 financial year despite a drop in revenues collected.
The shareable revenue for the 47 counties remained at Sh316 billion, which is equivalent to the current financial year’s allocation.
Conditional grants allocations amount to Sh13.7 billion, Sh30 billion being external loans and grants and Sh9.4 billion from the Roads Maintenance Levy Fund.
SHAREABLE REVENUE
To reduce counties’ dependence on shareable revenue, Treasury Cabinet Secretary Ukur Yatani said his ministry in conjunction with other stakeholders have finalised the development of an integrated revenue management system for county governments.
Counties have in the recent past become increasingly reliant on the State after failing to meet local revenue targets, thus continuously putting a strain on the Treasury to provide development top-up funds.
Under the Fourth Schedule of the Constitution, counties get their revenue from market and trade licensing fees, parking fees, liquor licensing, county parks, beaches and public cemeteries.
“The system, which is aimed at eliminating leakages and high revenue collection costs of the counties, is expected to be in place by the end of the FY 2020/21,” Mr Yatani said.
Counties will have to match their budgets to the country’s revenue, said John Kinuthia, the lead research analyst at International Budget Partnership.
DEBT REPAYMENTS
Mr Kinuthia said the Sh316 billion in shareable revenue that has remained the same as the 2019/20 financial year is acceptable given the under-performance of ordinary revenue, high debt repayments and a rising wage bill.
“Counties got the good end of the stick. They are lucky that the money was not reduced given the constrained fiscal environment. The national government has had to bear the load of revenue shortfalls, with counties missing the pinch of the lower-than-expected collections,” Mr Kinuthia said last evening.
Additionally, Treasury allocated Sh26.4 billion to the Nairobi Metropolitan Services to manage functions transferred from the Nairobi County government in February. This includes some Sh15.95 billion from the county’s equitable share and Sh660 million as an additional conditional allocation. NMS has also been allocated Sh1.5 billion from the national government’s equitable share to finance the Mukuru Renewal Project.
DISADVANTAGED COUNTIES
On pending bills, Mr Yatani reported that Sh36.7 billion or 71 percent of the total eligible bills had been settled by counties by May. The outstanding bills are expected to be cleared by June 30.
Some Sh6.8 billion has been allocated under the Equalisation Fund, from which billions of shillings are disbursed to disadvantaged counties through the Exchequer to cushion them and accelerate their development.
