The Council of Governors have been dealt with a blow after the Commission on Revenue Allocation (CRA) has declined request to increase the revenue allocation by an additional Sh381.5 billion.
The commission has capped the shareable revenue for counties at Sh370 billion citing budget deficits and national debt.
The commission chairperson Jane Kiringai said the Governor’s request was declined because of the current budget deficit and projected revenues could not allow allocation of more resources.
“The fiscal headroom to allocate either level of government more revenue was not possible. The projected revenue increase is estimated at Sh366.4 billion which is the error margin of unmet revenue target,” she said.
Further, the commission has allocated Sh1.76 trillion for the national government and Sh6.8 billion for the Equalisation Fund stemming from a projected revenue of Sh2.14 trillion.
CRA also raised an alarm over the inclination towards borrowing by the national government pointing out that the current trajectory is not sustainable.
Last month, Governors proposed additional funding allocated to counties in the 2021/2022 Financial Year adding that it will bring the total funds allocated for counties’ operations to Sh751.45 billion.
Governors said that the Bill which recommended that counties be allocated not less than 35 per cent of the revenue collected by the National Government had a lot of goodwill, as it was passed in both Houses of Parliament and in 45 out of 47 County Assemblies.
“To safeguard devolution and to ensure optimal operation of the devolved functions by the county governments, the Council of Governors proposes that the funds be increased in the Division of Revenue for the Financial Year 2022/23,” said CoG Chair, Governor Martin Wambora.
