Home » Media Centre » Blogs » One to Watch: CRA’s Revenue Allocation Formula
Equitable distribution of national resources has always been a point of contention among Kenya’s regions. Comparison of the country’s different regions shows clear and apparent disparities in the manner in which national resources have been apportioned, particularly during the old dispensation.
The constitution seeks to rectify the unequal distribution of national resources by requiring that counties receive at least 15% of the national budget every financial year i.e. Article 203 (2) “For every financial year, the equitable share of the revenue raised nationally that is allocated to county governments shall be not less than fifteen per cent of all revenue collected by the national government.”
This portion of the national budget (which may be more than 15%) is to be divided equitably amongst the 47 counties taking into account such factors as: the developmental needs of counties, the economic disparities within and among counties and the need to remedy them, and the need for economic optimization of each county etc.
The body charged with ensuring the equitable distribution of the national kitty between the country’s 47 counties is the Commission on Revenue Allocation. The Commission earlier this week released its proposed formula for the allocation of 150 billion shillings (estimated 15% of the national budget) between Kenya’s 47 counties.
According to the Commission’s Chairperson, Micah Cheserem, between 10 and 20 per cent will be allocated to each of the counties according to poverty levels; between 3 and 8 per cent will be allocated according to the region’s size. Between 15 and 20 per cent will be shared equally by the 47 counties while between 50 per cent and 70 per cent will be shared on the basis of the size of the counties population.
So size matters and so does population, the latter especially given that the population determinant may eventually account for between half to two thirds of the total amount to be shared. Since both size and population are major determining factors in the allocation of national resources, its no wonder that the delimitation of new constituencies and wards is so fraught with tension and gerrymandering seems to be the order of the day…however that’s another post.
The Commission’s formula for allocating national revenue, which is ultimately intended to achieve an efficient public sector through fiscal decentralization, has come under fire for being unfair and lacking measures to curb potential excesses, fiscal mismanagement and corruption at county level. After all how can fiscal decentralization achieve public sector efficiency if the process is riddled with corruption? A criticism to which the chair of the Commission has responded, “If you do not vet your leaders and bring in honest governors, then they will steal your money because it is not our work to come in and check it. If you vote in leaders because they slaughter bulls for you and throw parties, where do you think they’ll recover that from?” A succinct narrative of Kenyan electoral politics, and a warning to vote wisely.
What are your thoughts on the Commission’s formula for revenue allocation?
Find the Commission’s criterion for allocation of national revenue between national and county governments here. If you have any submission to make on the formula the Commission will be accepting submissions from the public until the end of the March.
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