NAIROBI, Kenya Feb 6 — Governors have declared a stalemate on mediation efforts on the division of revenue formula for Financial Year 2024/2025.
Council of Governors (CoG) Chairperson Anne Waiguru made the announcement on Tuesday saying the Commission on Revenue Allocation (CRA) and the National Treasury had maintained their respective positions and declined to yield to the Council’s proposal.
CoG maintained its demand for Sh439.5 billion in equitable share and Sh10.5 billion under the Road Maintenance Levy Fund (RMLF).
The National Treasury proposed Sh391 billion which would see a Sh5 billion increment from the 2023/24 allocation, with CRA recommending Sh398 billion.
“We however note with concern, that after lengthy discussions and analysis of the proposed recommendations by the task team, the three parties retained divergent positions on their proposed figures for shareable revenue,” Waiguru remarked.
Treasury maintained its proposal for Sh391 billion leading to a deadlock at the Intergovernmental Budget and Economic Council (IBEC) chaired by the Deputy President prompting the mediation efforts.
CoG premised its demand for Sh439.5 billion on inflationary pressure which it argued had impacted development spending in sub-national governments.
“Our proposal is buttressed by the rising Operations and Maintenance cost in Counties,” the Council explained.
Governors also bid for a commensurate adjustment for revenue growth as well as provision of an allocation towards County employees’ annual salary incremental cost.
“The allocation to factor in emerging items that will occasion additional expenditure by Counties such as the new mandatory National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF) and Housing Levy contributions,” CoG stated.
