Initially, the Finance Bill, 2024, had allocated Sh400 billion to the devolved units but the Bill's rejection forced the figure to be reviewed downwards to Sh380 billion.
The Bill sought to amend the Division of Revenue Act, 2024, to revise the sharing of the revenue raised nationally between the National and county governments, to reflect the downward revision of projected ordinary revenue collection for the financial year 2024/25.
It was passed in the National Assembly on August 7, before proceeding to the Senate, where it was passed with amendments on October 3.
On October 16, the National Assembly rejected the Senate’s amendments to the Bill paving the way for the formation of a mediation committee to unlock the impasse.
The 18-member committee co-chaired by Kiharu MP Ndindi Nyoro and Mandera Senator Ali Roba reached a deal Tuesday, that saw Sh7 billion added to the counties.
Before striking the deal, the committee examined several factors including the reasoning behind the reduction of the allocation to counties by Sh5 billion from last year’s funding, and also the basis for the projected shortfall of Sh346 billion in revenue.
The members also reviewed the criteria used to determine the projections before deliberating on how much funding would ultimately be allocated to Counties.
They further assessed historical revenue collection projections over the past decade by the national government along with county performance in collecting revenue from local sources.
The additional allocation to the counties now represents 24.67 per cent of the most recent audited revenue which is way above the 15 per cent minimum threshold constitutional requirement.
The Act allocates Sh2.2 trillion to the National Government.
Present during the event at State House were Deputy President Kithure Kindiki, National Assembly Speaker Moses Wetang’ula and his Senate counterpart Amason Kingi.
Others were Prime Cabinet Secretary Musalia Mudavadi, Treasury Cabinet Secretary John Mbadi and leaders from both Houses.
Ruto also assented to the Rating Bill 2022, and the Water (Amendment) Bill, 2024.
The Rating Act, 2024, creates a standard framework for valuation and rating, and clear guidelines for counties on how to assess property values and impose rates, among others.
On the other hand, the Water (Amendment) Act, of 2024, provides for Public-Private Partnerships in financing the development of water works by National Government Agencies.
