Lawmakers from both chambers of Parliament will convene for mediation following the rejection by the National Assembly of proposals from the Senate to raise county allocations by Sh25 billion. The Senate had suggested increasing the allocation from the initially proposed Sh391 billion to Sh415 billion in the Division of Revenue Bill.
MPs dismissed the Senate’s proposal after warnings from the Budget and Appropriation Committee (BAC), chaired by Kiharu MP Ndindi Nyoro. The committee cautioned that this increase would impact the Road Maintenance Levy Fund (RMLF) and the National Government Constituencies Development Fund (NG-CDF), which would each need to provide an additional Sh10 billion.
The Finance and Budget Committee, led by Senator Ali Roba (Mandera), had recommended a total government budget of Sh2.5 trillion, with counties receiving Sh415.9 billion for the 2024/25 fiscal year. The committee justified its proposal by adjusting the base allocation from Sh385 billion to accommodate non-discretionary financial obligations, including deductions for the affordable housing levy, increased contributions to the NSSF, and the Social Health Insurance Fund (SHIF), as well as matching allocations for industrial parks.
However, during a session marked by loud arguments and tense exchanges, Nyoro clarified that diverting funds to counties would impact the NSSF and SHIF, for which the committee had previously advocated for increased funding. He emphasized the challenges in allocating an additional Sh25 billion to counties, as the government had already reduced its budget by Sh273.3 billion due to lower-than-expected revenue collection.
He said: “Whereas it is obligatory for me to bring a motion, I rise to reject the Senate amendments. Currently, we are dealing with a deficit-to-GDP ratio of 2.9 percent, which is a modest deficit. We want to cap our deficit to 2.9 percent.
“Whatever the budget we are giving to the counties, then something has to suffer. We do not have an open envelope. Even as we make the current budget, it is proper we know that the estimates we are considering are not elastic. If we are to consider this, certain votes have to give way.”
He added that if they were to give counties more money, they will have to slash the RMLF going to counties by Sh10 billion and the NGCDF by Sh 10 billion to get to sharable revenue.
“This is one of the reasons why the BAC rejected this report. I request this House to agree with BAC. We reject this motion so that we can go to the mediation committee so that we can save the said figures that we have already ringfenced,” Nyoro said.
Six other members of the National Assembly, David Ochieng (Ugenya), Nyakundi Mokaya (Kitutu Chache North), Samuel Moroto (Kapenguria), Moses Atandi (Alego Usonga), Naisula Lesuuda (Samburu West), Makali Mulu (Kitui Central), and Ali Wario (Garsen) have been chosen by National Assembly Speaker Moses Wetangula to join their Senate counterparts on the mediation committee, in addition to Nyoro.
Emase urged the House to save the NGCDF and RMLF from cuts. She said: “I second the rejection of the bill. The discussion is about the variance. The National Assembly proposed Sh391 billion, while the Senate proposed Sh415 billion. The issue is where the 24 billion will come from.
“You have heard this money must come from somewhere – either RMLF or NGCDF. You all understand the economy we are operating in. We are in a tight corner and we can’t afford this.”
Because of the important work the two funds do, said Majority Leader Kimani Ichung’wa, lawmakers would not allow allocations to them to be slashed.
“I rise to agree with the BAC that it is important that we make decisions when we are all aware that choices have consequences. You all know we have had issues with governors on the fuel levy. They have been asking for the Sh10 billion and if we agree with this, the BAC has to give it away,” he said. “Also, you all know that NGCDF will be affected, yet we celebrated this fund for being in existence. If you take this away, then we suffer.”
Counties, proposed Majority Whip Sylvanus Osoro, should not get any more allocations as they are yet to utilize what they received. He said: “Devolution came in 2013 but can hardly show what it has done. NGCDF has been here and its presence has been felt by counties.
“Some of these county governments have a lot of money and they have not even been able to spend the monies given to them. We are getting into the closure of this financial year. Some of these governors have done nothing.”
But Minority Leader Opiyo Wandayi, Minority Whip Junet Mohamed and Migori Woman Representative Fatuma Mohammed told Nyoro to stop saying that NGCDF and RMLF will be affected if counties get Sh25 billion more.
Said Wandayi: “I support the motion. I agree in totality with the Senate recommendations. In our own calculation, counties need much more than what you have allocated them.
“The Senate is not telling us to remove money from NGCDF amd RMLF – it is only telling us that we need more money. It is incumbent on us to look at how much money we need.”
Junet accused BAC of trying to kill devolution. “I stand to support the amendments of the Senate. Let’s be honest, I have seen a billion shillings for the first time. We cannot be used as a House to kill devolution,” he said.
“The Senate has only asked for an increment – they have never said the money be removed from NGCDF or RMLF. What I am saying is that we must send more money to the counties.”
Said Mohammed: “The other side is blackmailing us. I don’t see anywhere the Senate is saying the money will be taken from NGCDF.”
