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{
"id": 1588132,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588132/?format=api",
"text_counter": 1214,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": "THE EQUALISATION FUND APPROPRIATION BILL (National Assembly Bill No.21 of 2025)"
},
{
"id": 1588133,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588133/?format=api",
"text_counter": 1215,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": " Hon. Temporary Speaker, I beg to move that the Equalisation Fund Appropriation Bill (National Assembly Bill No.21 of 2025) be now read a Second Time. This Bill was published on 12th June 2025 and introduced in the National Assembly on 17th June 2025. It was referred to the Budget and Appropriations Committee for consideration and reporting to the House. The Bill seeks to provide legal authority for appropriating money from the Equalisation Fund for use in the beneficiary regions during the Financial Year 2025/2026. The Equalisation Fund established pursuant to Article 204(1) of the Constitution requires that 0.5 per cent of all revenue collected by the national Government nationally go to it. The National Assembly computes the amount distributable, based on the most recently audited national revenue accounts. In considering this Bill, it is important to note that we are using audited and approved revenues of the 2021/2022 Financial Year. The audited revenue for this financial year is approximated at Ksh1.92 trillion, upon which we are considering the Equalisation Fund. The Equalisation Fund is exclusively for essential services like water, road infrastructure, health facilities, and electricity. The Equalisation Fund only funds those projects. Historically, the projects must be in marginalised regions. The objective of the Fund is to elevate standards of living in such areas to be at levels comparable to the rest of the nation. Allocation to the Equalisation Fund must adhere to a structured framework formulated by the Commission on Revenue Allocation (CRA) in accordance with Article 216(4). The current operational policy is on its second consideration. It identifies 1,424 marginalised areas as beneficiaries across 34 counties. Each designated county receives a proportion share of the Fund determined by allocation criteria of the Common Reporting Standards (CRS). In this Bill, we are appropriating Ksh16.8 billion to develop these identified areas. I will just highlight how we are arriving at the Ksh16.8 billion that we are allocating. First, Ksh6.2 billion has been carried forward from the 2024/2025 Financial Year. The Ksh10.6 The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1588134,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588134/?format=api",
"text_counter": 1216,
"type": "speech",
"speaker_name": "Alego Usonga, ODM",
"speaker_title": "Hon. Samuel Atandi",
"speaker": null,
"content": "billion is earmarked for this 2025/2026 Financial Year. The Ksh9.78 billion represents 0.5 per cent of the latest audited and approved national revenue and Ksh2.7 billion constitutes arrears authorised under the Division of Revenue Bill of 2025. The Fund allocated Ksh12.4 billion in 2018. That was arrears for the 2014/2016 Financial Year. The Ksh10.7 billion was earmarked for the 2021/2022 Financial Year, which was the second marginalisation policy. As we talk, I wanted to say that we have arrears of about Ksh45 billion. It has not been remitted to the Equalisation Fund. This is a very big challenge to the Fund because there is a financial year when there was zero allocation to the Fund. This has really affected the performance of this Fund. The Budget and Appropriations Committee has raised the concern with the Ministry of the National Treasury and Economic Planning. We need to enforce it going forward. We need to fund all those arrears. There is persistent regional disparity in the way this Fund allocates resources. For example, eight counties account for over 60 per cent of the Fund in this budget. Turkana County will receive Ksh1.86 billion, West Pokot will receive Ksh1.7 billion, and Narok County will receive the highest share at Ksh1.3 billion. Mandera, Wajir, Samburu, Garissa, and Baringo will receive Ksh5.5 billion collectively. This really underscores the marginalisation I was talking about in sharing the Fund. To safeguard accountability, we recommend that the funds bypass county revenue funds accounts. Instead, they should flow directly to the dedicated Central Bank of Kenya accounts for each county. We recommend that because we want to ensure the funds are not used for other purposes when they go to counties. We know governors lack discipline. Hon. Temporary Speaker, we are making this recommendation because we want to ensure that when these funds go to the counties, they are not used for other purposes. We know the governors lack discipline. Sometimes they receive the money and do something else with it, as opposed to earmarking it for the reasons they have been appropriated. We would also like the Controller of Budget to authorise the withdrawals, so that we eliminate the bureaucracy that exists. There is a lot of bureaucracy in the way these funds are administered. Therefore, we want to give the powers to the Controller of Budget to administer them. This will allow funds to flow directly and bypass the county revenue accounts. On the issue of arrears and shortfalls, we tried to meet the shortfalls by allocating about Ksh2.7 billion in this financial year. However, we realised it is negligible, especially for the case where we have a shortfall of about Ksh45 billion. We need a really drastic decision where we will allocate at least half of that shortfall, which translates to Ksh20 billion, in every financial year going forward. By doing this, we will have allocated full shortfalls in the next two financial years. Therefore, I recommend that this House approves the Equalisation Fund Appropriation Bill as it is to allow us to move and allow the counties and resources to flow to the projects. Hon. Temporary Speaker, I beg to move and call upon my able deputy, Hon. Pukose, to second."
},
{
"id": 1588135,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588135/?format=api",
"text_counter": 1217,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. Robert Pukose."
},
{
"id": 1588136,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588136/?format=api",
"text_counter": 1218,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": " Hon. Temporary Speaker, I stand to second the Equalisation Fund Appropriation Bill (National Assembly Bill No.21 of 2025). This Equalisation Fund is a creation of the Constitution 2010 under Article 204, as put by my Chairman. It came into being when the drafters of the Constitution realised that not all parts of Kenya had developed equally. We had about 14 counties that were lagging behind in terms of water, electricity, roads and health facilities. This necessitated the creation of the Equalisation Fund to help them catch up with the rest of the country. The Equalisation Fund had the initial policy which focused on 14 counties. Then, we had the second policy which looked at other parameters concerning the Fund which created 1,424 regions. Despite that, you The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
},
{
"id": 1588137,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588137/?format=api",
"text_counter": 1219,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": "find that the county allocations reveal that eight counties account for 60 per cent of the Ksh16.8 billion as per the Financial Years 2024/2025 and 2025/2026 allocations. There are many challenges. The Equalisation Fund was initially implemented through various ministries such as the Ministry of Health, Rural Electrification and Renewable Energy Corporation (REREC) and other agencies to ensure these areas got services. This met challenges necessitating change of regulations. The Committee proposed amendments in this Bill. The allocated funds will not be deposited into the county revenue fund accounts. Instead, they will be transferred directly to a special purpose account, opened by each beneficiary county, at the Central Bank of Kenya. This arrangement enhances financial control and ensures that the funds are used exclusively for their intended purposes. We have seen diversion of money meant for the health function. That is how we came up with the Facilities Improvement Financing (FIF) to make sure that money that is allocated for health is used for health. Therefore, the enactment of this Bill constitutes sufficient legal authority for the Controller of Budget to approve and authorise withdrawals from the Fund, streamlining the disbursement process. In addition, the Bill also provides that once the Controller of Budget authorises a withdrawal from the Equalisation Fund and the secretary of the board submits written instructions through the National Treasury requesting the release of the funds, these documentations constitute sufficient authority for the CBK to effect payment from the Fund account. This ensures that there is some accountability and the money is going directly to those projects. When you look at the allocations in terms of the schedule which is there, First Schedule, allocation per county and per constituency, they have projects which have been approved by the board. Therefore, if the money is diverted into other issues, then you have pending bills. Hon. Temporary Speaker, as we speak, we have pending bills from the first disbursement and money that is lying about within the ministries not having been utilised because there were hitches in as far as legal challenges that came in during that time where we had governors going to court and we even had amendments to the regulations."
},
{
"id": 1588138,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588138/?format=api",
"text_counter": 1220,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": "Therefore, the Committee having scrutinised this, feels that outstanding arrears to the Equalisation Fund stood at Ksh46.5 billion as of June 2024 against accumulative entitlement of Ksh59.96 billion since the Fund’s conception. This means that only Ksh13.3 billion, equivalent to 22.4 per cent of the total entitlement amount has been disbursed to the Fund. This shortfall in funding not only undermines the Fund’s credibility, but also poses a serious threat to the achievement of its core mandates considering that the Fund had a lifetime of 20 years. Therefore, it might be coming to an end, but I think in the wisdom of this House, we can still do an amendment to extend that period for the Fund."
},
{
"id": 1588139,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588139/?format=api",
"text_counter": 1221,
"type": "speech",
"speaker_name": "Endebess, UDA",
"speaker_title": "Hon. (Dr) Robert Pukose",
"speaker": null,
"content": "Hon. Temporary Speaker, with those few remarks, I second."
},
{
"id": 1588140,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588140/?format=api",
"text_counter": 1222,
"type": "scene",
"speaker_name": "",
"speaker_title": "",
"speaker": null,
"content": "(Question proposed)"
},
{
"id": 1588141,
"url": "http://info.mzalendo.com/api/v0.1/hansard/entries/1588141/?format=api",
"text_counter": 1223,
"type": "speech",
"speaker_name": "Hon. Peter Kaluma",
"speaker_title": "The Temporary Speaker",
"speaker": null,
"content": " Hon. Samwel Moroto, is recognised."
}
]
}