H.E. RAILA ODINGA’S STATEMENT ON REVENUE SHARING FORMULA:
In recent few days, the attention of the country has been captured by the standoff over the sharing of revenue among county governments. Five times, the Senate has failed to adopt its own amendments to the third basis formula for sharing revenue from the Commission for Revenue Allocation.
This stand-off is causing paralysis and mistrust at a time the country needs to be united and singularly focused on tackling the grave pandemic currently threatening the lives and livelihoods of our people. It has also taken a dangerous ethnic undertone instead of being a level-headed debate on the nation’s development trajectory.
The revenue sharing formula that the Senate has deadlocked over is a variation of what was recommended by the Commission for Revenue Allocation (CRA), the body mandated under Article 216 (1) of the Constitution of Kenya, to come up with a formula.
The key principle in the CRA recommendation on the third basis for revenue sharing for the next five financial years is that allocation should be population-driven. The CRA recommendation is based on an understanding that county governments are about service requirements of the population including in health, agriculture, infrastructure,education, among others.
The Senate made certain amendments to the CRA recommendation but equally retained the central principle that allocation must be about the population. Unfortunately, the institution has disagreed on its own amendments.
Under the circumstances, the country and our people would better served if we adopted the recommendation of the CRA for the next five years.
The CRA recommendation built on lessons from a comprehensive review of the second basis, a comparative analysis of financing transfer systems from other countries, and extensive consultations with national government, county governments, public finance experts, and the public in an independent and non-partisan manner.
In order to avoid a similar stand-off next time, the concerns currently arising should be forwarded to the CRA for consideration in its future recommendation.
The resources currently being recommended can adequately serve our counties if we eliminate corruption in addition to heavily punishing those perpetuating the vice both at the national and county levels. Luckily, the war on corruption is yielding fruits and should safeguard public finances.
We must also focus on encouraging counties to raise own source revenues from the economic activities within the county and demanding a prudent usage of those resources.
Having had a robust debate on this matter, the Senate should now allow the country move forward by adopting the CRA report while using the concerns voiced for future recommendations on revenue sharing.
H.E. Raila Odinga, EGH.
27th July 2020.