The Commission on Revenue Allocation (CRA) released a 44-page report which highlights the details of the 3rd Revenue Allocation formula. The CRA has a constitutional mandate of making recommendations concerning the basis for the equitable sharing of revenues.
These recommendations have to be considered and approved by the Senate. The 3rd Revenue allocation formula will be used as a basis for the financial years 2020/2021 to 2024/2025.
During the process of coming up with this formula, the Commission on Revenue Allocation (CRA) solicited input from the members of the public, various organizations, Ministries, Departments and Agencies across Kenya.
In terms of organizations consulted include: Kenyatta University School of Economics, International Budget Partnership, Strathmore University, ICPA(K) and Parliamentary Budget Office among others. They all gave their comments for possible consideration.
In public sector, the Kenya National Bureau of Statistics (KNBS), Ministry of Agriculture, Ministry of Health, County Governments and Ministry of Water among others were also consulted.
This 3rd Revenue Allocation Formula is expected to be used for financial year 2020/2021 – 2024/2025.
The formula has four key objectives as follows, a) To enhance services delivery; b) To promote balanced development; c) Incentivise fiscal effort and d) Incentivise fiscal prudence. The Kenya transfer framework address the four key objectives.
Principles of inter-government transfer which are applicable include: a) clarity if objectives b) equity to ensure all citizens have access to basic service and c) adequacy where County Governments should have adequate resources.
The first basis of this series was approved in November 2012 while the second basis second basis was approved in June 2016.
The second basis was based on population (45%) and basic equal share (26%) which is used to raise equity and fairness issues; poverty which is weighted at 18%, land area 8%, fiscal effort 2% and development Index is weighted at 1 percent.
According to the 3rd Revenue Allocation basis, every 5,000 people are supposed to have a community unit while a dispensary is expected to serve 10,000 persons, health center (30,000), primary referral (100,000), Level 5 (1 million) and Tertiary referral is expected to serve 5 million people.
Agriculture is one of the main parameters used to decide how much counties receive. The Food and Agriculture Organization (FAO), one extension officer serves 400 farmers while 5 extension per ward.
Allocation based on 3rd Basis
The following is a list of counties and how they will be allocated resources based on 3rd Revenue Allocation formula.
- Nairobi (Ksh. 17.1 billion);
- Bungoma (Ksh. 9.3 billion);
- Kakamega (Ksh. 10.8 billion);
- Kiambu (Ksh. 10.7 billion);
- Nakuru (Ksh. 10.1 billion)
From FY 2013/2014 to FY 2019/2020 counties had resources allocated as follows: is Baringo (Ksh. 31.52 billion), Bungoma (55.4 billion), Lamu (Ksh. 16.1 billion), Kisii (Ksh. 49 billion), Lamu (16.16 billion), Nairobi (94.9 billion), Nakuru (Ksh. 59 billion) and Nakuru (40.4 billion). Tharaka Nithi received the least allocation at Ksh. 22.8 billion.
Currently, senators failed to agree on the 3rd Revenue Allocation formula. The majority of the senators voted against it on Tuesday. Senator of Siaya, James Orengo, accused President Uhuru Kenyatta of being inaccessible when he is needed most.
Senator Johnson Sakaja said on the floor of the house that the formula which was discussed on the floor of the house is not the one which was recommended by Commission on Revenue (CRA).
GOT a story? RING Kerosi Dotcom on +254 20 78 64 348 or WHATSAPP on +254 704 829 003 or EMAIL email@example.com