Senate, National Assembly enter mediation over Revenue Bill dispute

The Senate and the National Assembly head into mediation as counties face worsening financial constraints from the delayed passage of the Division of Revenue Bill, 2024.

Both Houses are at odds over the amount to be allocated to counties, with the Senate pushing for Sh400 billion in shareable revenue while the National Assembly is proposing Sh380 billion.

The cash crunch is expected to deepen with the National Assembly set to break for a short recess beginning Monday, which will last until November 5.

For the much-needed funds to be disbursed to counties, both Houses of Parliament must agree on and pass the Bill before it is sent to the President for assent.

The Clerk of the National Assembly, Samuel Njoroge, said that should the mediation committee reach an agreement, a special sitting of MPs can be convened to approve the Bill and forward it to the President.

The National Assembly defended its stance on reducing the allocation by Sh20 billion, pointing to the revenue shortfall following the failure to pass the Finance Bill, 2024.

Initially, the government had aimed to collect Sh347 billion to plug a deficit in its Sh3.92 trillion budget for the 2024/2025 financial year.

Majority Leader Kimani Ichung’wah appealed to Senators to approach the negotiations with an open mind to ensure the money is released to counties promptly.

“I want to urge Senators to come to the negotiating table with a sober mind bearing in mind the reality of the country’s economic situation,” he said.

According to the Constitution’s Article 203 (2), counties are guaranteed an equitable share of at least 15 per cent of all national revenue based on the latest audited accounts approved by the National Assembly.

However, four months into the current financial year, the Bill has yet to be passed, leaving counties in a precarious financial position.

In 2019, the National Assembly attempted to address similar delays by passing the Public Finance Management (Amendment) Bill, 2019, which would have allowed counties to access 15 per cent of their revenue in cases where the Division of Revenue Bill had not been enacted before the start of the financial year.

However, the Senate rejected this amendment, claiming it would reduce funds allocated to counties.

The mediation process, which involves an equal number of representatives from both Houses, is now tasked with reconciling the differences.

Under Article 112 of the Constitution, the mediation committee has 30 days from its first sitting to agree on a version of the Bill that both Houses can pass. If the committee fails to reach a consensus within that period, the Bill will be deemed defeated and may need to be reintroduced.

Should the Senate amend the Bill, it will be returned to the National Assembly for further consideration. If no changes are made, the Bill will be passed directly to the President for assent.