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Governors, Treasury CS Rotich differ over county revenue allocation

Governors on Tuesday differed with Treasury Cabinet Secretary Henry Rotich over the formula used to allocate funds to counties for the next financial year.

Mr Rotich, they said, was deliberately pushing for underfunding of counties to portray them as failures, according to the Council of Governors (CoG).

The Council chairman Peter Munya, who was accompanied by governors Wycliffe Oparanya (Kakamega) and Jack Ranguma (Kisumu) claimed that the CS had ignored consultative decisions on the amount that counties deserved.

They cited a move to transfer the free maternity scheme funds from the counties to the National Hospital Insurance Fund (NHIF), saying that was a unilateral decision meant to frustrate counties.

The governors, who said that besides funds for other devolved functions like roads and libraries being left out of the budget, they were not consulted over the free maternity health scheme that will now be administered under NHIF.

The NHIF, the governors observed, is a parastatal under the national government and questioned why the government had allocated conditional grants to counties, for a function that will be undertaken by another level of government.

“It is completely turning the law upside down. Don’t give the impression that counties are receiving a lot of money for public consumption.

‘The national government must decide. If they want to keep maternity money, let it be under their budget,” Mr Munya told the Senate Finance Committee chaired by Billow Kerrow (Mandera).

Other senators present included Senate Majority Chief Whip Beatrice Elachi (Nominated), Prof Anyang’ Nyong’o (Kisumu), Paul Njoroge (Nominated) and Aron Cheruiyot (Kericho).

Prof Nyong’o said the national government should ensure that county governments are able to perform their functions by allocating adequate funds.

“If health is devolved, don’t take maternity money to somewhere else. The money for referral hospitals, which are under the national government never changes,” Prof Nyong’o said.

The governors want the Senate to re-consider the equitable share for the 2017/18 financial year saying funds provided in the Division of Revenue Bill forwarded to the Senate was inadequate to fund devolved functions.

MPs in the National Assembly reduced the equitable share in the bill that determines the amount of funds allocated for devolved functions in the 47 counties, from Sh299.1 billion that Treasury had proposed, to Sh291.1 billion.

The Commission on Revenue Allocation (CRA) Chief Executive Officer George Ouko told the committee they had proposed that devolved units be allocated sharable revenue of Sh314 billion.

Mr Ouko while admitting that the MPs move to reduce the allocation was ill advised, said the amount was appropriate to take care of inflation, population increase and the high cost of service delivery.

The Sh291.1 billion, he said, implies that counties will be growing at a growth rate of 3.8 per cent, which is below inflation rate that stands at 6.7 percent.

Mr Kerrow demanded to know why the CS kept on changing the parameters used to allocate funds to counties pointing out this year, the country’s inflation was used as the benchmark, as opposed revenue growth.

Mr Rotich said they are guided by the Constitution and global standards when making decisions on how to share revenue between the two levels of government.

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