How Funds Will Be Distributed to Counties Under New Revenue Sharing Formula
The Commission on Revenue Allocation (CRA) has wrapped up discussions with all 47 county governments regarding the draft Fourth Basis for Revenue Sharing Among Counties Formula.
This updated formula is essential for deciding how national funds are distributed among counties, to ensure fairness and foster balanced regional development.
The Fourth Basis for Revenue Sharing Formula distributes funds according to several critical factors.
It takes into account population size, land area, poverty levels, and fiscal capacity.
Counties with larger populations will be allocated more resources to address the needs of their residents.
Similarly, counties with more extensive land areas may receive additional funding to manage the costs associated with broader service delivery.
Poverty rates play a significant role, in directing higher funding to counties facing greater socio-economic difficulties.
Fiscal capacity is also a key consideration, ensuring that counties with less revenue-generating capability receive support to bridge the gap between their needs and their revenue.
The CRA has adhered to the revenue-sharing criteria outlined in Article 203 of the Constitution: county capacity to perform functions, development needs, economic disparities, affirmative action, revenue potential stability, and predictability of allocations.
The Formula’s Approach
The formula employs a weighted system where each factor is assigned specific weights based on policy priorities.
This methodology aims to ensure an equitable distribution of resources and address regional inequalities.
By adopting this approach, the formula supports balanced development and ensures that all countries can deliver essential services and encourage local growth.
In its recent engagements with county governors and regional economic blocs, the CRA committed to incorporating feedback from these discussions into the final formula.
The objective is to refine the proposal to better meet the diverse needs of each county while adhering to the principles established under Article 203 of the Kenyan Constitution.
This article sets out principles such as fairness, addressing economic disparities, and meeting regional development needs, which the CRA is dedicated to maintaining.
Council of Governors Chairperson and Kirinyaga Governor Anne Waiguru underscored the importance of utilizing current and accurate data in shaping the new revenue-sharing proposal.
In the meeting with the CRA, she stressed that the formula’s indicators—including basic share, population size, geographical area, poverty index, gross county product, and the state of paved and unpaved roads—are intended to ensure fair development across all counties.
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“The COG met with the CRA to review the ‘Fourth Basis for Revenue Sharing Among Counties Formula’ proposal. A crucial aspect of this formula is the availability of reliable, up-to-date data and ensuring equitable development across all 47 counties as guided by Article 203 of the constitution.”
“The formula’s indicators include basic share, population size, geographical area, poverty index, gross county product, and road conditions. A special committee of governors from each region will collaborate with the commission to incorporate recommendations aimed at enhancing access to quality devolved services and development infrastructure,” Waiguru added.
A dedicated committee of governors from each region will work with the CRA to integrate their recommendations, focusing on improving access to quality devolved services and infrastructure.
By considering factors such as county capacity, development needs, and revenue potential, the formula aims to establish a more predictable and fair system of resource distribution.
As Kenya advances with the implementation of the Fourth Basis for Revenue Sharing Formula, the emphasis remains on ensuring that every county has the necessary financial resources to meet its residents’ needs and drive regional development.
The joint efforts between the CRA and county governments reflect a mutual commitment to achieving balanced growth and enhancing the quality of life for all Kenyans.
How Funds Will Be Distributed to Counties Under New Revenue Sharing Formula
