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{
    "id": 1015280,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1015280/?format=api",
    "text_counter": 95,
    "type": "speech",
    "speaker_name": "Kieni, JP",
    "speaker_title": "Hon. Kanini Kega",
    "speaker": {
        "id": 1813,
        "legal_name": "James Mathenge Kanini Kega",
        "slug": "james-mathenge-kanini-kega"
    },
    "content": "Senate shall, by resolution, determine the basis for allocating the share of national revenue that is annually allocated to the county level of Government among the counties. In order to facilitate the workings of the Senate, Article 216(1) of the Constitution mandates the Commission on Revenue Allocation (CRA) to make recommendations concerning the basis for equitable sharing of revenue raised by the national Government between the national Government and among county governments. Since the promulgation of the Constitution in 2010, there has been two formulae or, if you like it, basis. The first basis for sharing revenue among counties was approved by the 10th Parliament in November 2012 and was used to share revenue for the Financial Years 2013/2014, 2014/2015, 2015/2016 and 2016/2017. The second basis was approved by the 11th Parliament in June 2016 and was used to share revenue among counties in the Financial Years 2017/2018, 2018/2019 and 2019/2020. It is also important to note that when that second-generation formula was presented to the Budget and Appropriations Committee, it was never debated. So, the 60 days lapsed and it was perceived to have passed. It never came for debate but I am happy that this Committee has been able to deliberate on this third-generation formula. The first basis for revenue sharing approved by the 10th Parliament in November 2012 was based on five parameters with different weights, namely population at 45 per cent, poverty gap at 20 per cent, land area at 20 per cent, the basic equal share at 25 per cent and fiscal responsibility at 2 per cent. The second basis for sharing revenue approved by the 11th Parliament in 2016 was based on six parameters, namely basic equal share at 26 per cent, population remained at 45 per cent, land area remained at 8 per cent, the poverty gap at 18 per cent, fiscal effort at 2 per cent and a new area of development factor at 1 per cent. The second basis was meant to provide alternative or adequate funding for county governments to enable them to effectively undertake their assigned functions, correct economic disparities, minimise the development gap and incentivise counties to optimise capacity to raise revenue. It is also important to highlight the reason why CRA gave that basis. That is pursuant to Article 2016 (2) of the Constitution. The CRA submitted its recommendation on the third basis of sharing revenue among counties to the Senate for consideration. The proposed criterion by CRA was tabled in the Senate on 30th April 2019 and was committed to the Standing Committee on Finance and Budget. Hon. Speaker, we are talking about 30th April 2019. So, the Senate decided to sit and sleep on this document until two or three months ago. The CRA’s proposal for the third basis of sharing revenue among counties was based on the following objectives: (a) to enhance service delivery; (b) to promote balanced development; (c) to incentivise counties to optimise capacity to raise revenue; and (d) to incentivise prudent use of public resources. In the CRA’s proposal, there was a shift towards service-oriented approach of revenue sharing where new parameters such as health index, agriculture services and other services were introduced and thus increased the number of parameters to 10. In comparison, the first and the second basis of sharing revenue were nearly the same with minimal changes entailing introduction of additional parameters, that is, development index and altering the weight in the second basis. The first and the second basis had basic equal share of 25 per cent and 26 per cent respectively while the third basis had proposed 20 per cent, which is a reduction. Poverty is also a common parameter among the three formulae as 20 per cent was in the first basis, 18 per cent in the second basis and proposed 14 per cent in the third basis of the revenue sharing. The share of land area parameter is constant at 8 per cent across the first, second and third basis on sharing revenue while that of fiscal effort is also constant at 2 per cent across all the three basis of revenue sharing. I want 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."
}