Economy

Governors sue to compel release of 50pc revenue amid formula stalemate

Summary

  • The Council of Governors (CoG) has moved to court seeking orders to compel the National Treasury to immediately release 50 percent of the Sh316.5 billion allocated to the devolved units in the current financial year.
  • In a petition filed Wednesday at the High Court in Nairobi, CoG says the Senate has abandoned its responsibility by delaying to break the stalemate on the third basis of sharing revenue.

The Council of Governors (CoG) has moved to court seeking orders to compel the National Treasury to immediately release 50 percent of the Sh316.5 billion allocated to the devolved units in the current financial year.

In a petition filed Wednesday at the High Court in Nairobi, CoG says the Senate has abandoned its responsibility by delaying to break the stalemate on the third basis of sharing revenue.

The council filed the case alongside Laikipia and Mandera county governments, saying should the court fail to intervene and order the Senate to unlock the impasse within 14 days, the devolved units will be exposed to existential danger.

They argue that Article 217 (7) of the constitution allows for the current second generation formula to be used in funds disbursement until such a time the new formula will be approved.

On reliance to the Supreme Court Advisory Opinion dated May 15, 2020, the council said it may ask the National Assembly to authorise the withdrawal of 50 percent of the total equitable share allocated to counties as per the previous year’s Division of Revenue Act.

This will be to enable the devolved units to continue functioning and rendering services to the citizens.

They are aggrieved that it is almost three months after commencement of the 2020/21 Financial Year, yet nothing is forthcoming.

“We are gravely aggrieved by the said inaction, procrastination and dilly dallying by the Senate and failure by the Controller of Budget, National Treasury and Finance Cabinet Minister to release 50 per cent of the funds allocated to the county governments,” reads the documents.

Due to lack of funds, the court documents indicate that the devolved units have been unable to carry out their functions as required by the constitution.