Governors warn of severe impact as senate proposes Sh20 billion cut to county funds

The Commission on Revenue Allocation (CRA) has opposed a proposal to slash county governments' budget by Sh20 billion.

Appearing before the Senate Budget and Finance Committee on Thursday, CRA Chairperson Mary Chebukati argued that the proposed reduction is unjustified given the anticipated increase in national revenue.

“The national revenue is projected to rise to Sh2.602 trillion in 2024/25 from Sh2.223 trillion in 2023/24. Consequently, the equitable share of Sh379.12 billion should be maintained without reduction,” Chebukati said.

At least 20 of the governors who attended the session unanimously opposed the budget cut proposal, expressing concerns that such a reduction would severely impact county operations.

Ahmed Abdullahi, Vice Chairman of the Council of Governors, emphasised the need to preserve devolution despite current national challenges, including recent demonstrations and the rejection of the Finance Bill 2024.

He insisted on maintaining the counties’ equitable share at Sh400 billion.

“The current situation does not warrant extra-constitutional measures such as the proposed budget cut. The Council of Governors firmly opposes reducing the allocation to Sh380 billion and advocates for retaining it at Sh400 billion,” Ahmed said.

Makueni Governor Mutula Kilonzo criticised the proposal, stressing that county allocations are based on audited accounts approved by the National Assembly, not projected revenues.

He added that the scrapping of the 2024 Finance Bill should not justify reducing county revenue shares.

Kilonzo also pointed out that under Article 219 of the Constitution, once allocated, counties' equitable share must be transferred without delay or reduction.

He highlighted that the Division of Revenue Act dictates the allocations, which cannot be altered post-approval.

“Since this legislation affects counties' finances, the Commission on Revenue Allocation’s recommendations are crucial, and Parliament has yet to vote on the matter as required under Article 205 of the Constitution. The equitable share should remain unaffected by National Government appropriations,” Kilonzo said.

Kakamega Governor Fernandez Barasa warned of the dire consequences of the proposed budget cut, which he claimed would undermine county governments' ability to deliver essential services, including healthcare.

“The proposed Sh380 billion allocation is lower than last year's Sh385.4 billion, leaving counties unable to sustain even basic operations. In Kenya’s incremental budgeting system, allocations should not be reduced from the previous year,” Barasa said.