Kenya Governors Warn of Financial Crisis as Counties Face Ksh.450 Billion Revenue Shortfall

Kenyan county governors warn of financial crisis if national government fails to allocate Ksh.450 billion in shareable revenue for 2024, highlighting the need for equitable revenue sharing to ensure essential services and development projects.

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Israel Ojoko
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Kenya Governors Warn of Financial Crisis as Counties Face Ksh.450 Billion Revenue Shortfall

Kenya Governors Warn of Financial Crisis as Counties Face Ksh.450 Billion Revenue Shortfall

Kenyan county governors are sounding the alarm over a potential financial crisis if the national government fails to allocate Ksh.450 billion in shareable revenue for the counties in 2024. The Council of Governors (CoG) has proposed a significant increase in county allocations to Ksh439.5 billion, while the government has put forward a lower figure of Ksh391 billion. The Commission on Revenue Allocation (CRA) has recommended an allocation of Ksh398 billion.

Despite constitutional provisions for equitable revenue sharing, there have been substantial delays in disbursing funds to the counties. As of February 2024, only 53.4% of allocated funds had been released to the counties. The impasse in budget negotiations has resulted in a deadlock, with governors and government officials at odds over the appropriate allocation for counties. Efforts to mediate the dispute through the Intergovernmental Budget and Economic Council (IBEC) have not yet yielded a resolution, prolonging the uncertainty surrounding county finances.

Why this matters: The financial crisis facing Kenyan counties threatens to disrupt essential services and development projects at the local level. Without adequate funding, county governments may struggle to meet their constitutional mandates and deliver on promises to their constituents.

The Council of Governors (CoG) Chairperson, Anne Waiguru, led a delegation of five governors in appearing before the Senate Finance Committee to express their concerns over the proposed allocation of Sh391.1 billion as the equitable share of revenue to counties. The governors, including Fernandes Barasa (Kakamega), Muthomi Njuki (Tharaka Nithi), Mutahi Kahiga (Nyeri), and Andrew Mwadime (Taita Taveta), advocated for a minimum allocation of Sh439.5 billion for the financial year 2024-25 as shareable revenue. They cited additional non-discretionary expenditures, such as the implementation of the Collective Bargaining Agreement with doctors and the Medical Equipment Service program, as justifications for the increased allocation.

"If the Division of Revenue Allocation Bill is passed as it is, the 47 counties in Kenya will face major challenges in delivering their constitutional functions," warned CoG Chairperson Anne Waiguru. The CoG has called upon the Senate to support the counties in securing the proposed Sh439.5 billion in shareable revenue for the financial year 2024-25.

Key Takeaways

  • Kenyan county governors warn of financial crisis if Ksh.450B not allocated in 2024
  • CoG proposes Ksh439.5B allocation, govt offers Ksh391B, CRA recommends Ksh398B
  • Delays in disbursing funds, with only 53.4% released as of Feb 2024
  • Impasse in budget negotiations threatens essential services and development
  • CoG demands minimum Ksh439.5B allocation for 2024-25 financial year