Counties will get Sh302 billion in the next financial year after a committee set up to negotiate a compromise between the Senate and the National Assembly struck a deal.
The mediation committee’s decision means a potentially crippling cash crunch in the counties because of lack of an agreement between the two Houses will be avoided.
An additional Sh12.2 billion was approved as conditional allocations.
This comprises Sh4.5 billion for the medical equipment leasing scheme, Sh900 million for free maternal care, Sh4.2 billion for Level Five hospitals, Sh605 million for construction of county headquarters, and Sh2 billion for youth polytechnics.
There is also an additional Sh31.48 billion that is not part of the shareable revenue comprising Sh11 billion from the Fuel Levy Fund and Sh20.4 billion from loans and grants from donors.
This means that counties will receive a total of Sh345.69 billion in the next financial year.
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The deadlock occurred because neither House was willing to cede ground, with an earlier version of the Bill collapsing after the mediation committee failed to agree. The Senate had wanted counties allocated an equitable share of Sh314 billion, while the National Assembly had approved Sh291 billion.
Treasury had initially proposed Sh299 billion while the Commission on Revenue Allocation had proposed Sh309 billion.
In the reports tabled simultaneously in both Houses, the committee said its decision was informed by “the need to adequately fund counties against the limited resources available for the two levels of government”.
“The committee agreed that there is need for both levels of government to live within the current resources by effecting austerity measures on non-core expenditures. The county governments should also improve on their own-source revenue collection so as to [have] additional funds,” the committee said.
PRAISED GROUP
In the Senate, Kisumu Senator Anyang’ Nyong’o praised the committee for reaching a compromise and saving counties a looming financial crisis.
“If we had adjourned sine die without the Bill, the country would have been in a terrible mess. We have shown we take the interests of counties seriously,” he said. He, however, complained that the Sh345 billion was negligible compared to what remains at the centre to facilitate what he called consumptive bureaucracy.
In its report, the committee said the approval of the Division of Revenue Bill was crucial for counties’ budget process.
