The country grappling with the ongoing tussle pitting the National Assembly and the Senate over the Division of Revenue Bill, 2019. The contention revolves around the proposed allocations to the equitable share of revenues between the National Government and the County Governments for Financial Year 2019/2020.
The matter was neither resolved at the Mediation Committee level nor at the Intergovernmental Budget and Economic Council (IBEC) as stipulated by the Intergovernmental Relations Act, 2012 (IGR Act 2012). IGR Act 2012 is Kenya’s mechanism for ensuring smooth operation between the two levels of government, as created by the Constitution of Kenya.
The matter has also been referred to the Supreme Court which has urged the differing parties to embrace alternative dispute resolution mechanisms in order to resolve the stalemate amicably.
This stalemate has been occasioned by the inconsistency in determining the revenue growth factor that is a key input into computing counties revenue share over the prior year’s share.
Over the years, the three-year average inflation and three-year average growth in ordinary revenue have been utilized inconsistently by the National Treasury and Commission on Revenue Allocation (CRA). This has yielded different figures as proposed allocations for equitable share. For Financial Year 19/20 the proposed shares of revenue are, Sh310 billion by the National Treasury, Sh316 billion by the National Assembly and Sh335 billion by the Senate and CRA.
The Institute is further concerned that the dispute resolution process as stipulated by the IGR Act 2012 was not adhered to. The Act provides that, “The National and County governments shall take all reasonable measures to resolve disputes amicably; and apply and exhaust the mechanisms for alternative dispute resolutions before resorting to judicial proceedings as contemplated by Article 189(3) and (4) of the Constitution.’’
The current impasse is detrimental to the principles and values espoused by the Constitution. In addition, it poses serious budgetary challenges to the implementation of development projects and service delivery at the county level keeping in mind that critical services to the most vulnerable in our society are provided at the county government level.
We are of the opinion that the two Houses of Parliament need to bury their hatchet and resolve this protracted impasse once and for all. Additionally, to forestall future standoff the country need to come up with appropriate legal and policy frameworks.
The country should develop a predictable and consistent revenue growth factor to determine the growth of the equitable share.
Lastly, we urge the two levels of government to strictly adhere to the dispute resolution mechanisms laid down by the Constitution and the IGR Act 2012. We call for consensus building among all players such as the National Treasury, Council of Governors, Parliament and the Commission on Revenue Allocation (CRA).