(Nairobi) – Counties across Kenya will receive KSh 387 billion ($2.59 billion USD) in the current fiscal year after prolonged negotiations between the Senate and National Assembly reached a resolution. The agreement, which provides counties with KSh 2 billion ($13.4 million USD) more than last year, marks the end of a standoff that had threatened to cause a financial crisis in devolved units.
The Division of Revenue Bill, 2024, which allocates national revenue between the central and county governments, had stalled due to disagreements between lawmakers. The Senate had proposed KSh 400.1 billion ($2.68 billion USD) for counties, while the National Assembly insisted on KSh 380 billion ($2.54 billion USD).
The deadlock necessitated the formation of an 18-member mediation committee, co-chaired by Mandera Senator Ali Roba and Kiharu MP Ndindi Nyoro. After intense deliberations and heated debates, the committee agreed to allocate KSh 387 billion ($2.59 billion USD) to counties.
Nyoro explained that the decision considered the country’s economic constraints and additional financial obligations for counties, including new levies for housing, healthcare, and updated PAYE rates.
Key Allocation Details
Previous Allocation (2023) Senate Proposal MPs’ Proposal Final Allocation (2024) KSh 385 billion ($2.57B USD) KSh 400.1B ($2.68B) KSh 380B ($2.54B) KSh 387B ($2.59B)
Roba emphasized that the mediated amount aimed to prevent counties from halting operations. “We do not want to see counties grounded due to lack of funding,” he stated.
Both sides conceded to ensure funding reached counties promptly. Nyoro described the outcome as “a balanced compromise,” recognizing inflation, the lack of an updated Finance Bill, and economic challenges.
The agreement now clears the way for the passage of the revised Division of Revenue Bill, 2024, and the County Allocation of Revenue Bill, 2024. This step is crucial for the Treasury to disburse funds efficiently to devolved units, averting potential delays in service delivery.
The National Assembly had passed an earlier version of the Revenue Bill, but it was returned by the President following the withdrawal of the Finance Bill. Lawmakers’ cooperation ensured a resolution before Parliament proceeded on recess.