The ongoing political heat over revenue sharing was informed by recommendations from the Commission on Revenue Allocation (CRA) which proposed the third basis for sharing revenues among counties. CRA is supposed to be making proposals after every five years and the proposed recommendations, when passed will last for five years.
Raila Odinga, the opposition leader, expected to whip his Senators has already thrown his weight behind the CRA formula, arguing that Senators fail to adopt their own recommendations and amendments. He has urged that they make future recommendations to CRA for consideration for the fourth basis.
“The Senate made certain amendments to the CRA recommendation but equally retained the central principle that allocation must be about the population. Unfortunately, the institution has disagreed on its own amendments”, Raila noted.
The third basis has introduced a new feature to the formula by having them considered, in order to deepen service delivery. Health and agriculture are the new entrants, which have tinkered with the overall amounts some counties receive, leading to acrimony. This has seen some counties benefit while others lose, a situation that has led leaders in the Senate and beyond to cry foul.
The third basis proposes the formula as follows; health index is placed at 17 per cent weight, agriculture (10 per cent), other basic services (18 per cent), poverty (14 per cent), basic share (20 per cent), land area (eight per cent), rural access (four per cent), urban households (five per cent), fiscal effort (two per cent) and prudence index (two per cent) among others.
In the mind of CRA, these services, specifically health and agriculture are critical responsibilities counties perform in the governance structure, hence availing resources to them would be prudent.
The health parameter is further divided into three. There is the number of health facilities in the County, the number of people who go to health facilities and the health facility gap. For instance, while Nyeri and Wajir Counties have the same population but facilities are different. Nyeri has more facilities and while it will get its share of the same, Wajir also gets the facilities gap share to enable it better serve its residents.
The agriculture parameter is divided into two. Each county gets half the amount equally while the remaining half is based on agricultural utility of the land per county.
The rest of the parameters have largely remained the same, save for allocations that have reduced.
The first two formulas placed more weight on populations at 45 per cent, and this has further informed the insistence by some legislators that the formula must guarantee one man, one shilling.
However, former Legislator Billow Kerrow poured cold water on the insistence on one man, one shilling, arguing that this already happens.
“The nine counties (from Mr. Kenya region) have a population of 8.5 million, representing 18 per cent of the national total. In 2020/21 allocations, they receive sh53.3B, being 17 per cent of the total county revenues. On per capita basis, sh316.5 billion will work out to sh6,600 per person. This region’s allocation works out to per capita of sh6,200. Hence, if we base the sharing on population which they deem essential, they got their one man one shilling mantra fulfilled” the former legislator asserted.
CRA explained that the recommendation seeks to address four primary objectives; to enhance service delivery, to promote balanced development, to incentivise counties to optimise capacity to raise revenue and to incentivise prudent use of public resources.
The basis is expected to be used for sharing of revenues for financial years 2019/20 to 2023/24.