Nine MPs, nine senators appointed to mediate Sh380 billion county revenue dispute

An 18-member mediation committee has been established to address the ongoing dispute over the equitable share of revenue to be allocated to counties for the current financial year.

Parliament formed the team, composed of nine MPs and nine Senators, to resolve a months-long deadlock after disagreements surfaced regarding the proposed reduction of county funding by Sh20 billion.

The committee has a 30-day mandate from its initial session to find a compromise.

Representatives from the National Assembly include Kiharu MP Ndindi Nyoro, who is also the Chair of the Budget and Appropriations Committee, Teso South MP Mary Emase, John Chikati (Tongaren), David Ochieng (Ugenya), David Kiplagat (Soy), Otiende Amollo (Rarieda), Fatuma Jeho (Wajir Woman Representative), Makali Mulu (Kitui Central), and Ojiambo Oundo (Funyula).

The Senate team includes Finance and Budget Committee Chair Ali Roba also Senator for Mandera, Nairobi Senator Edwin Sifuna, Mohamed Faki (Mombasa), Richard Onyonka (Kisii), Eddy Oketch (Migori), Danson Mungatana (Tana River), Wahome Wamatinga (Nyeri), Julius Murgor (West Pokot), and Veronica Maina (nominated).

The impasse arose when MPs approved Sh380 billion for county allocation, contrary to the Senate's initial request of Sh400.1 billion.

The adjustment was introduced through the amended Division of Revenue Bill, 2024, following President William Ruto’s withdrawal of the contentious Finance Bill, 2024, which faced strong opposition, particularly from Generation Z.

The Division of Revenue Bill designates how national revenues are divided between the national and county governments.

In response, Senate Speaker Amason Kingi said last week, "I hereby convey the said decision of the National Assembly to the Senate and seek the appointment of nine Senators to a Mediation Committee to consider the Bill in accordance with Article 113 of the Constitution."

The delay in revenue allocation has impacted county governments, which rely heavily on Treasury disbursements for payroll, project funding, and bill payments.

Senators are seeking a minimum of Sh400 billion for counties, whereas the National Assembly argues that, due to the projected Sh346 billion shortfall that would have been addressed by the Finance Bill 2024, counties can only be allocated Sh380 billion.

Senators maintain counties should not receive less than the Sh385.4 billion allocated in the previous fiscal year.

The dispute dates back to August when the National Assembly passed the Division of Revenue (Amendment) Bill, 2024, referring it to the Senate, which amended and returned it in October.

After further disagreements, the bill was directed to the mediation committee.

In September, the Treasury released Sh31.8 billion for July's allocation after a two-month delay, in response to an advisory from Attorney General Dorcas Oduor, permitting the release of 50 per cent of funds based on the previous fiscal year’s Sh385 billion allocation.

Treasury Cabinet Secretary John Mbadi explained that legal constraints necessitated seeking the AG's opinion.

While Mbadi pledged the August allocation for release within October, the status of allocations for September and October remains unclear.