The National Assembly has rejected the Senate’s proposal to increase county government allocations by Ksh65 billion in the 2025 Division of Revenue Bill.
The Senate had amended the Bill to raise the amount from Ksh405 billion to Ksh465 billion.
However, MPs say the increase is unrealistic given the current economic situation of the country
Majority Leader Kimani Ichung’wah, while speaking on the floor, said the country does not have the financial space to support the additional billions.
“That is an increase of about Ksh65 billion above what is agreed, and bearing in mind the fiscal space of the country, it may not be practical to increase,” said Ichung’wah during the House session.
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With both Houses disagreeing, the matter will now head to a mediation committee to find common ground on the final allocation.
“Therefore, having considered that, I thought it was only fair to reject these amendments by the Senate and allow us to go into early mediation. I therefore urge this House to reject in totality this proposal by the Senate”, he added.
Governors Differ with National Assembly on Allocation
Earlier in March, the Council of Governors (CoG) strongly opposed the proposed Ksh417.4 billion allocation to counties, saying that it is insufficient to support effective service delivery and a setback to the spirit of devolution.
The CoG, chaired by Kakamega Governor Fernandes Barasa, who also led the Finance, Planning, and Economic Affairs Committee, argued that the allocation heavily favored the national government at the expense of counties’ constitutional mandates.
During deliberations on the Bill, the governors demanded an increase in the equitable share to at least Ksh536.8 billion.
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“Over the last five years, while ordinary revenue has grown from Sh1.8 trillion to Ksh2.6 trillion, and is projected to rise further,
“The counties’ equitable share has increased by only Ksh70.9 billion compared to the national government’s Ksh702.6 billion growth. This trend is inequitable and unsustainable,” said governor Barasa.
Further, they noted that even the Senate’s proposed Ksh465 billion still fell short of meeting county financing needs.
Also, they highlighted that Kenya’s projected 5.3% economic growth and a growing shareable revenue base, expected to reach Ksh2.8 trillion in the 2025/26 financial year, as justification for a higher county allocation.
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