County leaders are intensifying their efforts to secure a substantial allocation of Sh450 billion for the next financial year, warning that failure to do so could lead to a shutdown of devolved units due to financial strain.
Anne Waiguru, Chair of the Council of Governors, stressed the importance of revising the equitable share upwards, especially in light of increased taxation such as the housing levy and the Social Health Insurance Fund (SHIF). Speaking before the Senate Finance Committee, Waiguru emphasized that without adequate funding, devolution would face a crisis exacerbated by a mounting wage bill.
“We are not seeking favors; we are demanding our fair share. The implementation of new taxes alone will escalate the wage bill. Please provide the necessary funds for us to operate efficiently,” stated Waiguru.
County leaders proposed the dissolution of the Kenya Roads Board and Kenya Rural Roads Authority, advocating for the direct disbursement of the Roads Maintenance Levy Fund.
Waiguru informed the committee led by Mandera Senator Ali Roba that projections indicate a significant increase in the wage bill due to deductions from the new Housing Levy, amounting to Sh4 billion, and the National Social Security Fund, costing devolved units Ksh.3 billion.
Highlighting the urgency of the situation, Waiguru questioned why funds were being withheld at the National Government level despite devolved functions, warning of mounting pending bills if their plea went unheeded.
Nyeri Governor Mutahi Kahiga lamented that meeting the demands of the growing workforce, particularly in the health sector to support Universal Health Coverage (UHC), would be impossible with the proposed revenue allocation.
Tharaka Nithi Governor Muthomi Njuki cautioned that the commitments made in ongoing negotiations between the Kenya Medical Pharmacist and Dentist Union (KMPDU), the Council of Governors, and the National Government were unrealistic.
COG vice chair Ahmed Abdullahi criticized the National Treasury for allocating insufficient funds to counties in the current financial year, urging a fairer distribution considering devolved functions.
The Senate committee pledged to increase the revenue allocation beyond the proposed Sh391 billion in the Division of Revenue Allocation Bill passed by the National Assembly.
Despite the Commission of Revenue Allocation (CRA) proposing a Sh398 billion allocation for counties in the 2024/2025 financial year, the National Treasury recommended a lower allocation of Sh391 billion, citing the need to validate expenditures and eliminate non-core expenses.
Counties argue that the approved allocations, based on 13 percent of local revenue collections, fall short of the constitutional requirement of 15 percent.
