A looming impasse over shareable revenue could cripple plans for the General Election just four months away.
The kitty is again impeding progress in budget-making as National Assembly and Senate members squabble over the Division of Revenue Bill, (DoRB) 2022.
While the National Assembly has approved Sh370 billion equitable share for counties in the next budget, the Senate insists on Sh495 billion.
During the Speaker’s Kamukunji (informal sitting) on Tuesday, senators resolved not to proceed with debate on the bill, leaving the reading of the budget, set for Thursday next week, in limbo.
Speaker Ken Lusaka said the debate would not proceed until the Sh39.8 billion County Government Grants Bill is considered through mediation.
Makueni Senator Mutula Kilonzo Jr said lawmakers suspended debate on the DoRB, which is also headed for mediation, after they proposed an increment in allocation to counties.
Conditional allocation and grants have since 2013 been part of the Division of Revenue Act, but Attorney General Paul Kihara Kariuki cited a court ruling that said they cannot be part of the DoRB.
Tabling of budget estimates
Based on the High Court ruling in 2019, the DoRB must be approved by Parliament before tabling of the budget estimates by the National Treasury Cabinet Secretary.
The Grants Bill contains Sh39 billion, an allocation drawn from mainly donors, meant for counties as conditional grants. Of the figure, some Sh32 billion is sourced from multilateral support while the remaining is a donation from the government.
The dynamics and odds appear to have conspired against President Uhuru Kenyatta, Deputy President William Ruto and ODM leader Raila Odinga, who will have to rally their troops to avert an impasse that might derail the passage of DoRB and budget.
Complicating matters, the Senate has revived the Building Bridges Initiative proposal that seeks to allocate at least 35 per cent of revenue raised to counties.
This means the lawmakers will not settle for less than the Sh495 billion recommended by the Finance and Budget Committee that is chaired by Kirinyaga Senator Charles Kibiru.
The committee said the equitable share should be increased from Sh370 billion, while the government’s share should fall from Sh1.764 trillion to Sh1.639 trillion.
“The proposed amount is unchanged. Factoring in inflation, the allocation is lower and it would constrain counties from rendering the same level of services in the 2021/22 financial year,” the committee said.
Impediment to devolution
The team said it also considered the ongoing drought across the country, the Sh2.33 billion allocated in the last six years for construction of county headquarters, the Equalisation Fund and Early Childhood Development Education.
Senator Kibiru said the stalemate on the County Government Grants Bill is an impediment to devolution.
“It denies West Pokot county Sh733 million, Kisumu Sh922 million, Wajir Sh1.31 billion and Bungoma Sh686 million. Critical projects are affected by the lack of funds,” he said.
Kisii Senator Okong’o Omogeni said the National Assembly should not dictate to the Senate what to do.
Passed by the Senate last year, the Grants Bill was amended by National Assembly towards the end of the year, changes rejected by senators.
One of the sources of the row is an amendment by the National Assembly to have the Treasury as the prime facilitator of any deal between a county government and a development partner as well as tabling such agreements in the National Assembly and Senate before inclusion in budget policy statements.
The other is a proposal by National Assembly to replace the words “grants” and “conditional” with “additional allocation”.
Additional reporting by Ibrahim Oruko
