Business Daily
Central Kenya
Commission on Revenue Allocation
County Allocation of Revenue Act
Kakamega 1.7 million
Kenya National Bureau of Statistics (KNBS
National Treasury
Public Finance Management Act
Taita Taveta
Tana River

Isiolo, Lamu top pay per-person as focus shifts to spending

Isiolo, Lamu and Marsabit counties have the highest per capita shares begging the question if allocations are properly used to uplift livelihoods.

Residents of Isiolo, Lamu and Marsabit have drawn the highest average annual payment per-person since the inception of the devolved government system in 2013, data by the National Treasury showed, shifting focus on the utilisation of funds in such counties. Isiolo topped the list of payment per-person with an annual average of Sh21,837 over the period 2013-2018. Lamu was second with per capita allocation of Sh20, 970, followed by Marsabit at Sh18,204.

People living in Tana River, Samburu and Taita Taveta also received a huge share of Sh17,321, Sh15, 724 and Sh11,843 respectively.Nairobi had the least allocation per person at Sh4,198 while Kiambu, Meru and Nakuru got Sh5049, Sh5,333 and Sh 5,380 respectively.Cumulatively county governments received more than Sh1.3 trillion since their establishment in March 2013. Of the payments, 95 per cent was from the equitable revenue share, for which the devolved units have autonomous budgeting and expenditure responsibilities as well as accountability obligations under the Public Finance Management Act, 2012 and its regulations.In the financial year 2017/18 alone, county governments received Sh 302 billion as their equitable share of revenue. This represents 100 per cent of the appropriation as per the County Allocation of Revenue Act (CARA), 2017.

At the beginning of financial year 2017/18, the Commission on Revenue Allocation (CRA) introduced a new policy, identifying marginalised areas and the criteria for sharing the equalisation fund.The resources are allocated based on a weighted formula: population (45 per cent); equal share (26 per cent); poverty (18 per cent); land area, (eight per cent); fiscal effort (two per cent) and development factor (one per cent).

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The formula implies that counties will receive a greater share of revenue the larger their population, the higher their poverty rate and the larger they are in terms of land mass. In addition, because all counties would face some fixed costs of running their local government, 26 per cent of the revenues are to be shared equally among them. Another two per cent of revenue is provided as an incentive for fiscal responsibility, and will be initially shared equally among the counties. The idea is that those counties that manage their resources better and are more effective in mobilising their own resources will be rewarded by receiving a higher share of the resources under the fiscal responsibility parameter.

The breakdown of per capita payments is likely to trigger debate on the state of financial management in the counties amid continued disparities in development and wealth.“The formula divides money equitably between national and county governments. Each level has to work with priorities,” George Ooko, chief executive of the CRA told the Business Daily.In a recent report by the Kenya National Bureau of Statistics (KNBS), Nairobi and Central Kenya counties dominate the list of richest counties in statistics that have exposed disparities in wealth among the devolved units.Nairobi has the lowest share of poor people with 17 persons in every 100 living in poverty, followed by Nyeri and Meru with 19 each, Kirinyaga (20) and Narok (23).

Turkana is classified as the poorest county in the 2016 survey with more than 79 in every 100 of its population living in poverty, followed by Mandera (78), Samburu (76), Busia (69) and Garissa (66).Kenya ushered in devolution in 2013 to bridge the uneven distribution of wealth that the centralised system of governance entrenched. Countrywide, 36.1 per cent of the country’s population of about 45.4 million lives in poverty, an improvement from 46.6 per cent in 2006.

Besides being the richest county, Nairobi holds the largest population in the country of about 3 million, followed by Kakamega 1.7 million and Kiambu 1.6 million.

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