County governments will receive Sh387 billion in the current fiscal year after a mediation team of the Senate and National Assembly struck a deal following weeks of protracted negotiations.
The allocation is Sh2 billion more than the amount the devolved units received in the last financial year.
“The figure we have agreed upon is Sh387 billion as the mediated position for county governments,” Mandera Senator Ali Roba said after the stormy session that saw journalists kicked out of the meeting.
The breakthrough is a relief to counties that had risked a cash crisis due to delays and the standoff between the Senate and the National Assembly.
Roba co-chaired the mediation committee on the Division of Revenue Bill, 2024 alongside Kiharu MP, Ndindi Nyoro.
The Bill splits the revenues generated nationally between the national and county governments.
The Senators and MPs had clashed over the amounts that should be allocated to counties, triggering the standoff that led to the formation of the 18-member mediation team.
While senators had demanded and approved an allocation of Sh400.1 billion, MPs insisted on Sh380 billion.
Announcing the breakthrough after hours of heated exchanges, Roba and Nyoro said the committee arrived at the amount after careful consideration of several factors.
“The magnanimity of the members of this mediation has been based on the fact that we are proceeding on recess, the two houses. And the way we all support devolution, we do not want to be seen to be in a situation where our counties are grounding to a halt,” Nyoro said.
The National Assembly’s Budget and Appropriations Committee chairman said the team considered the economic situation of the country and extra expenses counties are expected to incur during the year.
“We have seen that there are many areas that we need to support our counties. One is the additional levies in terms of housing levy, which the employer and the employee have to pay. There are new levies in the healthcare provision and the new cadre of PAYE,” Nyoro said.
“Because of inflation considerations and also realising that this financial year is an extraordinary year without the Finance Bill in place, we decided to give our counties Sh387 billion,” he added.
Both sides made concessions after careful consideration of all the factors.
“The argument is based on the principle that even the employees under labour law, when you employ a staff and you pay him a salary of ShX today, unless some catastrophic incident happens, you don’t give that employee less money suddenly.”
The breakthrough now sets the stage for the passage of the revised Division of Revenue Bill, 2024, and the amended County Allocation of Revenue Bill, 2024, for seamless disbursement of funds by the Treasury to the devolved units.
Parliament had passed the legislation but the President rejected
the initial Revenue Bill after the
withdrawal of the Finance Bill.
