Council of Governors Opposes Revenue Cut, Calls for Sh400.1 Billion Equitable Share for Counties
The Council of Governors (CoG) is urging the National Government to reinstate the Sh400.1 billion equitable share for County Governments, as originally agreed upon. The CoG argues that the recent revisions in the national budget, which were approved by the Cabinet, should be reflected in the sharable revenue allocated to counties.
The call follows the withdrawal of the Finance Bill 2024/25 after Gen-Z protests in June 2024, which had led to a reduction in county revenue allocations. The National Government had planned to allocate Sh387 billion, a move that would have resulted in 31 counties losing over Sh12 billion, while seven counties, mostly from Northern Kenya, would have gained an additional Sh7 billion. The CoG now seeks the restoration of the full Sh400.1 billion allocation.
At a recent meeting held in Naivasha, CoG Chairperson and Wajir Governor, Ahmed Abdullahi Jiir, along with Executive and Liaison, Management and Business Committee Chairperson Mutahi Kahiga, emphasized the need to ensure equitable and timely funding to the counties. The meeting, held under the theme ‘Fostering Collaborative Leadership and Synergy for Transformative Governance and Devolution,’ discussed crucial issues regarding revenue allocation and intergovernmental relations.
The CoG also expressed concerns over the National Social Security Fund (NSSF) reforms, noting that County Governments should be exempt from contributing to Tier II under the NSSF Act, as their contributions are already covered under the Lap Fund, a pension scheme funded from the Consolidated Fund.
The ongoing discussions also focused on the Fourth Basis for revenue sharing (2025/26–2029/30), which has already been submitted for Senate consideration. This new revenue-sharing formula includes additional parameters, such as the blue economy, water and sanitation, fiscal effort, environmental performance, and affirmative action for small counties, among others.
The CoG has called for the timely transfer of funds for recently unbundled functions from the National Government to County Governments, ensuring that all devolved functions and resources are properly transferred as required by the Cabinet directive of January 21, 2025. There is also a push for the operationalization of new urban areas, with the CoG urging the National Government to transfer both functions and resources to newly established cities and municipalities.
The CoG has advocated for the digitization of fund approval processes to eliminate delays in County Governments’ access to funds, ensuring that National Government ministries carrying out county functions adhere to the Inter-Party Agreement (IPA) as required by law.
The Commission on Revenue Allocation (CRA) Chairperson, Mary Wanyonyi, defended the proposed formula, assuring that no county would lose funding outright due to the stabilisation fund. The formula aims to correct historical marginalization, particularly in arid and semi-arid regions, while also addressing the needs of more populous counties.
As devolution continues to evolve, the CoG’s call for equitable revenue sharing highlights the ongoing challenges of balancing the funding needs of both populous and marginalized counties to ensure the effective delivery of services and the continued growth of devolution in Kenya.