Counties get boost as Senate increases recurrent expenditure ceiling by Sh7.93 billion

In a major victory for governors, the Senate has approved an increase in the expenditure ceiling for county governments, allowing them to spend an additional Sh7.93 billion on recurrent expenses for the current financial year.

This decision, however, has drawn criticism from Members of County Assemblies (MCAs), who argue that the reductions to their budgets will severely affect their ability to carry out their duties.

Under the new expenditure ceiling, counties are now permitted to allocate up to Sh33.75 billion for recurrent expenses, a significant rise from last year's ceiling of Sh25.82 billion.

The increase reflects the Senate's decision to give county executives more financial flexibility to meet operational costs.

Some counties are set to benefit the most from the expanded budget. Meru, for example, will see its recurrent expenditure ceiling increase to Sh1.04 billion from Sh802.47 million.

Kitui's budget will rise to Sh1.03 billion from Sh787.23 million, while Nakuru will be allowed to spend Sh949.69 million, up from Sh703.77 million.

Nairobi's expenditure has been increased to Sh924.64 million, up from Sh640.18 million, and Murang'a will be allowed to spend Sh822.21 million, up from Sh633.05 million.

Other counties with notable increases include Kiambu, which will now have Sh937.94 million to spend, up from Sh689.61 million, and Kakamega, which will see its budget rise to Sh954.36 million from Sh702.97 million.

Migori, Nandi, and Kisii are also among the counties benefiting from increased recurrent expenditure ceilings.

MCAs' cuts

While county executives celebrate their windfall, the news is less welcome for county assemblies.

The Senate has however reduced the recurrent expenditure ceiling for MCAs by Sh4.24 billion.

Last year, county assemblies were allowed to spend up to Sh40.61 billion, but this has now been slashed to Sh36.36 billion.

Nairobi, Kiambu, Wajir, and Turkana counties have faced the biggest reductions.

Nairobi's assembly budget was cut by Sh327.4 million, while Kiambu's was reduced by Sh229.6 million. Wajir's budget was slashed by Sh208.4 million, and Turkana's assembly saw a reduction of Sh196 million.

These cuts have sparked protests from MCAs, who argue that the reductions will cripple their ability to carry out their constitutional roles effectively.

Philemon Sabulei, Chairman of the County Assemblies Forum, expressed his concerns about the drastic cut to the MCAs' budget.

"This represents a drastic cut that has a considerable adverse impact on the ability of the county assemblies to perform their constitutional mandate effectively," Sabulei said.

He noted that the reduced ceiling would disrupt the operations of county assemblies and undermine their role in devolved governance.

Sabulei called for a re-evaluation of the budget adjustments to ensure that county assemblies are adequately resourced to fulfil their constitutional responsibilities.

The initial proposal had capped county assemblies' recurrent expenditure at Sh40.19 billion, but this figure was later reduced after the President sent the County Allocation of Revenue Bill back to Parliament for review.

The revised County Allocation of Revenue Bill, 2024, now sets new parameters for county governments' expenditures.

According to Section 107(2)(a) of the Public Finance Management Act, a county's recurrent expenditure should not exceed its total revenue, excluding wages and benefits for public officers.

The wages and benefits of public officers are capped at 35 per cent of a county's total revenue.

For county assemblies, the law specifies that their expenditures should not exceed 7 per cent of the county's total revenue or twice the personal emoluments, whichever is lower.