President Ruto’s Budget Reorganization to Slash County Funds by Sh20 Billion
Counties are poised to lose Sh20 billion this fiscal year as President William Ruto adjusts the budget following the withdrawal of the Finance Bill, 2024.
In a memo to Parliament, Ruto has refused to sign the County Allocation of Revenue Bill, 2024, which designates Sh400.1 billion to the devolved units.
Instead, the President has proposed cutting the allocation to Sh380 billion, significantly impacting the counties.
“By the authority granted to me under Article 115 (1) (b) of the constitution, I decline to approve the County Allocation of Revenue Bill, 2024, and refer it back to the Senate for reconsideration,” stated Ruto.
“I suggest amending the Bill by replacing the First Schedule with the one attached to this Memorandum.”
This new amount is Sh5 billion less than what the counties received last year and Sh20 billion below their current allocation for this fiscal year.
Ruto cited the failure to pass the Finance Bill, 2024, as the reason for not signing the Bill into law.
He mentioned that this failure has made it necessary to reorganize and rationalize the government’s finances for this year.
To overturn the President’s memo, either House would need a two-thirds majority, a challenging feat.
“Parliament must either amend the Bill in light of the President’s reservations by a majority vote or pass it a second time without amendments or with amendments that do not fully address the President’s reservations, with a two-thirds vote in each House,” Article 115 of the constitution states.
Controversy surrounds the President’s memo to amend the County Allocation of Revenue Bill, 2024.
The CARB is designed to distribute national funds among the 47 devolved units.
The Division of Revenue Bill, 2024, which has been enacted, allocated Sh400.1 billion to counties.
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The Act divides national revenue between the national and county governments.
Lawyers and lawmakers argue that the President cannot request amendments to the County Allocation of Revenue Bill, 2024 without altering the Division of Revenue Act.
“Why would the Allocation Bill be returned if the Revenue Bill has already been approved?” questioned Senate Majority Whip Boni Khalwale.
“How can the Division of Revenue Bill be invalidated? Our counties are already financially strained.”
Nairobi Senator Edwin Sifuna questioned amending the county allocation revenue bill without changing the division of the revenue bill.
“It’s impossible. The President has no authority over how counties distribute their revenue,” he said.
“The Senate has vowed that counties will not lose any funds from what we passed.”
Nairobi Governor Johnson Sakaja stated that reducing county allocation would violate the law.
He emphasized that no amendments can be made to the Division of Revenue Bill once signed by the President.
“The law clearly states that the national government will cover any shortfall,” Sakaja told the Star.
Kisii Senator Richard Onyonka, a member of the Budget and Finance Committee reviewing the President’s memorandum, said the committee will return the issue to the Senate.
“We aim to bring this matter to the plenary so Kenyans can see which senators are opposing devolution,” he said.
President Ruto’s Budget Reorganization to Slash County Funds by Sh20 Billion
