This archive report was first published on 23 August 2020.
Published on August 23, 2020
By IBRAHIM ORUKO
A Senate committee formed to resolve the revenue-sharing stalemate has extended its engagements with stakeholders after new simulations by the Commission on Revenue Allocation (CRA) indicated that at least 28 counties may lose under the proposed formula.
The simulations, which were conducted using the 2019 population census and poverty index, threw the lawmakers off-guard as they revealed that the original formula would entrench the problem that has caused the stalemate.
The committee, which was established by the House last week, has been struggling to find a middle ground to end the stalemate. The lawmakers have been unable to pass the third criteria of sharing revenue among counties due to the majority view that no county should lose anything.
However, the CRA's new simulations have revealed that 28 counties, mainly from the North, Coast, and Lower Eastern regions, stand to lose under the proposed formula. This is in contrast to the initial formula, which showed that 19 counties would lose while 28 others would gain.
The commission had used the 2009 census and poverty index to develop the contentious formula before the country went into last year's census. The formula, which puts more weight on population, was submitted to the Senate in April last year.
During a meeting between the committee, National Treasury CS Ukur Yatani, and CRA on Friday, the CRA presented three options, all of which indicated that 28 counties stand to lose out on the allocations while 19 will gain should its formula be applied to the 2019 population census.
Mr Yatani cast doubt on the proposal by Nominated Senator Petronila Were, saying it would take at least four years to implement if approved by the Senate. Ms Were has proposed an amendment to the House committee on finance in which she suggests that allocation per county in the 2020/21 financial year be retained as it was in the last financial year.
The CS told the committee it would take at least four financial years for the equitable shareable revenue to peak at Sh348 billion, and that is if the vagaries of the Covid-19 pandemic are not factored in. The projections provided to the committee show that the equitable shareable revenue will rise to Sh323 billion in the 2021/22 financial year, then to Sh331 in the 2022/23 and Sh341 billion in the 2023/24 financial year.
