Economy

County chiefs win fight for control of rural power funds

duale

Majority Leader Aden Duale (right) addresses journalists in Nairobi on Wednesday. Mr Duale amended the Division of Revenue Bill in Parliament on Thursday. Photo/FILE

Governors have won the battle for control of billions of shillings meant for rural electrification and regional hospitals after Parliament made a U-turn and transferred the allocation to the counties.

Majority Leader Aden Duale has made amendments to Division of Revenue Bill in changes that will see Sh226 billion allocated to counties.

The counties had initially been allocated Sh217.9 billion, which together with Sh3.65 billion set aside for rural electrification, Sh3.74 billion for Level Five hospitals and Sh1.4 billion for youth polytechnics add up to Sh226 billion.

This meant cash for rural electrification was to be controlled by the MPs while the Treasury was to channel the Sh5.14 billion directly to the regional hospitals and youth polytechnics. The governors will now share the Sh8.79 billion.

The Treasury has been under pressure to boost counties allocation after it used the 2009/2010 accounts to calculate the income ratio that allowed the national government to keep the share of the revenue meant for counties.

“We don’t want to be accused as MPs or the Treasury as seeking to control the funds devolved to counties,” said Mr Duale in reference to the proposal to increase the governor’s allocations.

He added that the Controller of Budget would advise on how the governors would share the Sh3.74 billion for Level Five hospitals, which are present in a few counties.

Governors have been pushing to control the cash devolved to the counties including the Equalisation Fund and allocation to the regional hospitals, commonly referred to as Level 5.

The Treasury will allocate the Rural Electrification Agency (REA) Sh7.3 billion for the year ending June 2015, but the budget would be shared equally between the counties and the national government.

READ: Row looms after Senate devolves rural power cash

The Sh3.65 billion counties cash, which is set to be under the watch of governors, was to be controlled by MPs, angering the county chiefs.
Now, the cash will remain with REA, but the governors will dictate zones to be connected to the national grid.

The national government allocation of Sh3.65 billion will be mainly used to connect public facilities such as learning institutions as the State races to link rural schools in plans to give free laptops to Class One pupils.

The Ministry of Energy had a target to connect 5,000 rural schools to the national grid by June, but has so far managed 1,000.

The Parliamentary Public Accounts Committee was this week put on the spot over its failure to approve latest revenue accounts that has limited revenue going to counties.

The Treasury has proposed that counties be allocated Sh226 billion in the next financial year — which the government has been telling the public is “43 per cent of national revenue”.

However, this is only true when audited figures for 2009/10 are used to calculate the ratio.