Economy

100 constituencies to lose Sh771m in new CDF formula

house-SENATECHERARGEI0708GG

Parliament buildings in Nairobi. FILE PHOTO | NMG

edwinmutai_img

Summary

  • The committee has recommended that the budget ceiling for each constituency be three quarters of the amount divided equally among all constituencies and an amount equal to a quarter divided among all constituencies taking into account the number of wards in each constituency.
  • The formula mirrors allocation of funds to the 47 counties where the devolved units get varying amounts based on a range of parameters such as population size, land area, health care and roads.
  • There are 1,450 wards in the country based on the delimitation of electoral areas by the Independent Electoral and Boundaries Commission (IEBC) following the promulgation of the 2010 Constitution.

Some 100 constituencies will lose Sh771.06 million in allocations from the National Government Constituencies Development Fund (NG-CDF) if Parliament adopts proposed changes to the cash distribution formula.

The National Government Development Fund (Amendment) Bill, 2019, which has already been adopted by the National Assembly’s Select Committee on the NG-CDF, proposes that the 290 constituencies equally share 75 percent of the annual NG-CDF allocation, with the rest distributed based on the number of wards in each constituency.

“Using the annual allocation for 2020/21 of Sh41.7 billion the proposal resulted in a high of Sh156.8 million and the lowest at Sh124.2 million, creating a variance of Sh32.5 million. The effects of this is that 190 and 100 constituencies are better and worse off respectively” the committee said in a report.

The formula would see 190 constituencies gain between Sh6 million and Sh13 million while the rest would lose Sh158,155 to Sh13 million. All the 290 constituencies get a flat rate of Sh137.4 million every year, with the Treasury having allocated Sh41 billion to the NG-CDF in the current financial year.

The committee has recommended that the budget ceiling for each constituency be three quarters of the amount divided equally among all constituencies and an amount equal to a quarter divided among all constituencies taking into account the number of wards in each constituency.

The formula mirrors allocation of funds to the 47 counties where the devolved units get varying amounts based on a range of parameters such as population size, land area, health care and roads.

There are 1,450 wards in the country based on the delimitation of electoral areas by the Independent Electoral and Boundaries Commission (IEBC) following the promulgation of the 2010 Constitution.

The NG-CDF board said the proposed amendment to the Act was likely to create a huge variance in allocation of funds to constituencies. “Scenario developed by the board and working with the 2020/21 financial year allocation results in a wide range variance of Sh113,322,255 where Turkana West and Lamu East would receive the highest and lowest at Sh220,675,608 and Sh107,453,353.

“Comparing the same with the current sharing formula, the amendment would make 123 constituencies better off while 167 will be worse off,” the board said in submissions to the committee on NG-CDF.

Tongaren MP Eseli Simiyu who sponsored the National Government Development Fund (Amendment) Bill, 2019 had sought to amend Section 34 the NG-CDF Act, 2015 to introduce a new budget ceiling for constituencies.

He proposed that three quarters of the CDF cash be divided equally among all constituencies and an amount equal to a quarter divided by the national poverty index multiplied by the constituency poverty index.

Dr Simiyu argued that the equal share as stipulated in the NG-CDF Act, 2015 is unconstitutional and that constituencies vary in terms of needs and levels of poverty, most of them being below the poverty line.

“It is worth noting that equal sharing of the fund would not close the poverty gap index,” the Tongaren MP said.

The NG-CDF board told the committee that it had been exploring a number of variables and scenarios aimed at improving the basis of sharing the fund among constituencies.

NG-CDF is exclusively meant to support projects under the functions of the national government. This includes schools and security-related projects such as police stations and police posts, as well as education bursaries.

The CDF has been popular with MPs as they use taxpayer funds to initiate development projects at the constituency level to endear themselves to voters.

The NG-CDF board said it identified poverty, number of wards, and number of public primary schools, enrolment in public primary schools, constituency area, secondary school indicators, temporary classrooms, urban public school and level of prudence in utilisation of funds.

The board said the variables were informed by the need to capture a wide range of diversity in the socio-economic status among and within constituencies. It dropped a number of proposed variables such as constituency area since some are expansive, in semi-arid areas while others were small and in urban areas.

According to a schedule on the distribution of the Sh41 billion under the new sharing formula, Gichugu, Githunguri, Gigil, Webuye East and Bomachoge Chache constituencies will receive the highest amount of cash, with each getting Sh156,755,259.

Constituencies that have seen their allocation slashed from the current Sh137.4 million to Sh124,241,552 include Jomvu, Laisamis, Igembe South, Mwingi North and Kirinyaga Central.

“Ideally, the formula for distribution among constituencies should be clear, transparent and apply equally. “Legislation can make allowances to provide funding also on the basis of distance from the capital city, level of poverty, size of constituency, size of population or other qualities that affect the provision of services in a constituency,” the committee said in the report.