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Rich counties to get more cash in CRA revenue plan

The share of poverty in influencing allocations
The share of poverty in influencing allocations will drop to 15 percent from the current 18 percent. FILE PHOTO | NMG 

A proposed formula for sharing of revenue among the 47 counties will be influenced less by level of poverty and population of a devolved unit.

The plan developed by the Commission on Revenue Allocation (CRA) says the share of poverty in influencing allocations will drop to 15 percent from the current 18 percent.

The weight of population will fall to 18 percent from 45 percent in a review that will cover the next five years from July 2019 if approved by the Senate.

The proposed formula has now included the share of residences who do not have health insurance and the size of population that relies on farming in a county as determinants in the sharing of billions of shillings among the 47 units.

“The proposed changes in the relative weights of each of the expenditure measures reflect the cost of the different functions of county governments,” Ms Jane Kiringai, the CRA chairperson, said.

“As a commission we seek to incentivise counties to reap the rewards of engaging in sound financial management practices regardless of budget and population size.”

Currently, counties share revenue based on five parameters, namely; population (45 percent), equal share (25 percent), poverty (20 percent), land area (eight percent) and fiscal responsibility (two percent).

The proposed formula will see allocations to nine counties, mainly poor devolved units, fall in the next financial year starting July 2019.

These include Mandera whose allocation next year compared to the current fiscal period will dip by Sh1.36 billion, Lamu (Sh1.09 billion), Isiolo (Sh145 million), Wajir (Sh514 million) Tana River (Sh285 million), Kilifi (Sh1.43 billion) and Kwale (Sh1.02 billion).

The changes have rewarded resource-rich counties such as Nairobi, whose share will rise by Sh1.65 billion to Sh17.44 billion, Nakuru (Sh2.34 billion), Meru (Sh1.33 billion), Kisumu (Sh688 million), Kiambu (Sh699 million), Kakamega (Sh792 million) among others.

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