Fresh Fallout Between Ruto & Governors Looms Amid Doctors’ Strike
The ongoing debate about fair revenue sharing between the national government and county administrations has resurfaced, with governors pushing for a significant boost in the funds allocated to local governments.
The core of the problem revolves around resource distribution, as governors argue that many counties are facing economic instability because they lack adequate funding.
In January, the Council of Governors (CoG) suggested a substantial increase in funding, advocating for a boost to Ksh439.5 billion. This amount is in stark contrast to the government’s suggested increase to Ksh391 billion.
During a session before the Senate’s Committee for Finance and Budget, Chairperson of the Council of Governors, Anne Waiguru, highlighted the critical need for enhanced resources. “We are not seeking favors; we are advocating for resources adequate to sustain counties and ensure their continued functioning,” Waiguru asserted.
In contrast, the Commission on Revenue Allocation (CRA) has recommended revising county allocations to Ksh398 billion to address the fiscal needs of the devolved regions. The commission suggested a Ksh7 billion increase.
The constitution mandates that revenue must be distributed fairly between the national and county governments. Counties must receive at least 15% of the total revenue collected by the national government.
However, recent data reveals a significant lag in the allocation of funds, which intensifies the financial difficulties experienced by counties.
As of March, reports show that county governments are still missing almost half of their equitable revenue share from the Treasury, intensifying financial challenges at the local level. By February 29, 2024, counties had received just 53.4% of their allocated funds, leading to significant financial uncertainties.
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The budget negotiation stalemate has resulted in a deadlock, with governors and government officials disagreeing on the proper allocation for counties in the next fiscal year.
The National Treasury suggested an allocation of Ksh391 billion, but the Council of Governors insists on Ksh439.5 billion, highlighting a significant difference in their resource allocation preferences.
The lengthy discussions regarding the division of vertical revenue highlight the difficulties in reconciling the financial requirements of both national and county governments. Although the Intergovernmental Budget and Economic Council (IBEC) has attempted to mediate the disagreement, a solution is still out of reach due to differing views on how to distribute the shared revenue.
Governors have reaffirmed their position, calling for a Ksh450 billion allocation to counties due to rising operational expenses and the necessity of maintaining vital services and initiatives.
Nyeri Governor Mutahi Kahiga emphasized the financial challenges counties encounter, especially in covering salary expenses and financing essential initiatives such as Early Childhood Development (ECD) education.
The gathering on Tuesday was held to discuss how revenue would be distributed among counties and included important participants such as the Council of Governors, the Commission on Revenue Allocation, officials from the National Treasury, and representatives from the Senate.
The outcome of the discussions will soon reveal if a significant breakthrough can be reached, potentially extending the uncertainty around county finances.
Fresh Fallout Between Ruto & Governors Looms Amid Doctors’ Strike
