Ergo, Ego: On the Division of Revenue Bill

Michael Onsando
16 July ,2019

“So please restrict yourselves to the functions that have been allocated to the county. And they are here. When we read them, you think we are demeaning you, but it is not us. It is the people of Kenya who gave you these roles like animal control and welfare, licensing of dogs and facilities for the accommodation, care and burial of animals.”

Of course the County Government does more than bury pets. And it would be unwise to let a little political banter (no matter how brutal) get us all twisted. But it is definitely worth looking into an issue that might have the country at a stand still if it isn’t resolved – The Division of Revenue Bill.

The problem began when President Uhuru signed the Appropriation Act 2019 before the stalemate of the Division of Revenue Bill was solved. A stalemate that has turned to the Supreme Court to be resolved, as the rest of the country wonders how much more of the 2019/2020 financial year will move with county governments unable to pay for drugs, water, electricity and development projects.

But why did Ras one sign the bill despite so much contention around the country?

First, the bill was signed late June, meaning that the president probably waited till the last minute to sign. It would also help to remember that many counties still misappropriate funds (remember Waititu’s peace keeping in South Sudan funding?). Also that a lot of money goes back to the government at the end of the financial year, although this might be chalked up to the complications in the exchequer process. So it makes sense that there have been some questions raised as to the amount of money that the Senators proposed for the counties.

On the other hand, that this issue is holding up services is also a bit absurd. The initial proposal by the Commission of Revenue Allocation was for KES 335 Billion before the National Assembly slashed it to KES 310 Billion – a difference of about KES 25 Billion. Which averages at about 530 million per county (it’s unlikely that the money will be divided equally but yeah). Which is what makes it absurd because Nairobi county has over a billion shillings allocated for “General Administrative Services.” And this isn’t even to challenge the necessity of that expense. Rather I want to ask – are we going to grind everything to a halt because of an amount of money that is half of the administrative services? Is this work by the National Assembly really tantamount to an “onslaught on devolution” as claimed by Wycliffe Oparanya, Chairman of the council of governors?  Take this from his statement issued yesterday:

“In this second term, devolved governance is being attacked by denying County Governments their much needed resources. The National Treasury continues to hold counties hostage by always deviating from the Commission on Revenue Allocation (CRA) recommendations and by constantly delaying disbusrsement of funds to counties”

I’m not going to go into delaying of funds. I’ve heard the rumours about the exchequer process being more complicated than a rube goldberg machine. But is this, strictly speaking, true? Sure, the CRA has recommendations but isn’t parliamentary oversight the reason that they are recommendations and not laws?

Are the CRA’s recommendations meant to be accepted without question or challenge?

Budgeting seems to be an extremely practical question. Moving money from here affects there and moving money from there affects somewhere else – and it’s not like the country has been doing fantastically anyway with Henry Rotich’s latest budget talk showing that about 61% of the country’s 2019-2020 budget going to servicing debt

So why are we being held hostage by this clash of egos? And we know it is a clash of egos because when it comes to discussing it we delve into trivialities like burying pets and licensing of dogs. Meanwhile two weeks have gone in the financial year and work is yet to begin officially. 

“There is a problem. A big one for that matter. It can only be solved when people sober up” Kwame Owino, Director, Institute of Economic Affairs

The National Assembly says it must be KES 310 Billion. The Counties move to 327 – is it that difference worth pulling the brakes on the county machinery? Is this ego contest worth the delay?

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