Senators have reached a compromise on contentious rules proposed by the commission on revenue Allocation (CRA) to guide how county governments will share revenues in the next financial year starting June.
The formula to be used to share the proposed Sh 290 billion in the 2016/2017 fiscal year will largely favour rich counties and leave poor counties suffering lower allocation with more money set for distribution to counties with high population.
“We have made a compromise on the formula that will be passed once we place its motion at the national assembly. Not all counties will benefit from the new formula because, different parameters will favour certain counties,” said Senate finance committee chairman, Billow Kerrow.
The same formula was last year rejected by the senate over ‘weakness,’ with issues of equality, high poverty levels to excess of 75 percent in some counties playing at stage.
The committee has retained a 45 percent allocation to counties based on population to improve access to government services by most citizens, meaning big towns like Nairobi and Mombasa will enjoy a huge allocation.
Population has been highly contested by the senators especially from poor counties saying it would make their jurisdictions poorer.
An initial proposal had pegged the parameter at 60 percent but a meeting held by CRA in Naivasha last year reduced the share to 54 percent but senate further dragged it down to current level.
Devolved units will also be rewarded 2 percent of the revenue share for counties that will show capacity and efficiency in revenue generation, meaning counties with higher revenues are set for huge returns.
This element is expected to put county governors in check on development projects.
Share of revenue based on county government structures has been increased slightly by a percentage to 26 percent across the 47 counties, while allocation based on poverty index has been reduced by 2 percent to 18 percent.
Geographical size of the county will attract 8 percent of the share, while development level-a new factor will get 1 percent.