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REVENUE SHARING DEBATE 2020: THE BEST METHOD TO SHARE RESOURCES WITH MINIMUM CONFLICT

By Gedi Mohamed Ibrahim

Gedi0n 25th September 1963, the Kenyan Prime Minister Jomo-Kenyatta gave an address at a conference attended by British and Kenyan representatives from the 25th September to 6th October 1963 in London with the aim to finalize the Constitutional arrangements ahead of the Independence of Kenya on 12th December 1963.

The dilemma that faced the Kenyan leaders by then was to endeavour and give Kenya a workable Constitution guaranteeing the stability and effective government in the years after independence. They devoured to accord contention and friction in the machinery of government and have Kenyan leaders to procreate the more urgent task of having a Kenyan spirited constitution, economic recovery and development of the nation.

At Independence, the Kenyan Constitution was based on the standard “Lancaster House template” used for the former British Colonies in Africa and greatly aided further oppression and dictatorship rather than unity and prosperity. Injustice to regions within Kenya, ethnic lineage and improper division of revenue anarchy followed and development was linked directly to the leader and his birthplace. Issue of equity and equality was never entertained.

To ail, the Constitutional discrepancies in the past, the most important policy change ushered in by Kenya’s 2010 Constitution was an overhaul of the way in which resources are shared across the Country. The Constitution of Kenya, 2010 took these powers away from the executive and created new bodies, including the Commission of Revenue Allocation and the Senate to lead a more transparent and objective process of deciding how to share resources.

As stipulated under Article 216(1) of the Constitution, the Commission on Revenue Allocation is mandated to make recommendations concerning the basis for the equitable sharing of revenue raised by the National Government between the National and County Government and among the County Governments.

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Article 216(2) further mandates the Commission to make recommendations on other matters relating to the financing of and financial management by county governments and to encourage fiscal responsibility.

The decision about how to share revenues across the counties begins with a recommendation by the Commission on Revenue Allocation. This is forwarded to Parliament which makes the final determination.

The parliamentary process begins in the Senate, which can accept or amend the CRA proposal. Once they have approved it, it moves only around it with a supermajority. If they do amend it must go back to the Senate for review or mediation.

Within only five years, the post-independence ruling elite in Kenya had amended the Constitution to fully decentralize power. The Colonial power map was reconstituted.

Presidential power in Kenya was considerably strengthened during the one-party era which lasted from 1969 to 1991.

The Constitution of Kenya, 2010 lays out both detailed principles and elaborates procedures for making decisions about public finances. What do these principles and procedures indicate about the intended aims of Kenya’s new Public Finance System? The core values in the new system are reduced to two: Public engagement throughout the process and equity in the distribution of resources.

The decision about how much money to give counties actually involves two choices:

The first is the issue of how much of the total national pot to give to the two levels of governments. This is sometimes referred to as the “Vertical” share.

The second decision is equally how much each individual County gets out of the total that is given to the counties as a whole and definitely, this is where the elephant in the room hides.

The Senate has adjourned for the 10th time on Monday 18th August 2020 failing to agree on the best method to share revenue in the Division of Revenue Bill 2020 and further displaying horrible images of leaders who have lost the trajectory on matters nationhood, equity and fair sharing of resources.

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I opine that the Senate needs to read and understand Article 203 of the Constitution of Kenya 2010 which anchors on national interest, the fiscal capacity of counties, economic disparities within and among counties.

If we were to care about the greater Kenyan Unity, Peace and Harmony, we would simply allow sharing revenue on need basis guided by the developmental trajectory of counties.

It is important to note that counties that were funded well from independence and host key governmental installation can never compete with arid and semi-arid counties that have not enjoyed state warmth prior to devolution.

To achieve sufficiently the provisions of Art 174(f) that promotes social and economic development and the provision of proximate, easily accessible services throughout Kenya the senate must adopt a formula that will give more money to counties marginalized than the rest. That will simply reduce the gap between the have’s and have not counties in the Country.

Under their new proposal, the amount shared to counties shall range between Sh250 billion and 270 billion. The balance from the available Sh316 billion shareable revenue will then be distributed among counties based on an amendment tabled by Hon Sakaja in the Senate.

The simulation of the Hon Linturi amendment significantly reduces the range between those who will lose out and those who will gain. A total of 29 counties will gain. But the gains and losses are not as significant as those to be occasioned by the deal recommended by the Finance committee. Under the Linturi proposal, Mandera will lose Sh245 million, Kwale (177 million), Wajir (Sh175 million), Marsabit (Sh156 million), Kilifi (Sh153 million), Mombasa (Sh135 million), Narok (Sh130 million), Makueni (Sh107 million), Nyamira (Sh97 million) and Tana River (79 million). Allocation due to Kiambu increases marginally by Sh160 million, Nandi and Nakuru (Sh149 million), Uasin Gishu (Sh142 million), Nairobi (S120 Million), Trans Nzoia (Sh94 million), Kajiado (Sh87 million), West Pokot and Baringo (Sh83 million), and Kirinyaga (Sh79 million), respectively.

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From the above formula’s, one fails to understand why underdeveloped counties continue to receive peanuts from the National Government while constituted as devolved units under the new Constitution. The expectation of the drafters of our current supreme law was to fund more marginalised regions of the nation and redeem them from the curses of poverty, delusion and hopelessness.

To conclude, we must rise above the board and accept that the cake is enough for the country to share. For Example … Form four leavers from northern Kenya have no business coming to Nairobi, Mombasa and Kisumu to enrol in universities when the Government of the day has invested in quality higher learning institutions and generated resources to the common man on the ground. It beats logic too that the National Government builds new roads every year and improves road network connectivity but forgets the roads in Northern Kenya as if that region is not part and parcel of the nation’s territorial boundary.


“Let’s share resources having in mind that we are equal before the law and exercise equality more frequently”


REVENUE SHARING DEBATE 2020- THE BEST METHOD TO SHARE RESOURCES WITH MINIMUM CONFLICT -1


Gedi Mohamed Ibrahim is an advocate of the High Court of Kenya and he can be reached at Mohamed.gedi33@gmail.com


 

About Whispers from the North

Whispers from the North is an online platform that appreciates the ecological, cultural and socio-economic diversities of Northern Kenya. We also acknowledge that the lives of the communities of northern Kenya has been shaped by a number of intrinsic and extrinsic factors which have led to complex challenge that calls for a multifaceted approach.

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