CRA unveils new county revenue allocation formula

November 11, 2014
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On personnel emolument factor Mandera, Lamu, Wajir, Tana-River and Samburu lag behind/XINHUA-File
On personnel emolument factor Mandera, Lamu, Wajir, Tana-River and Samburu lag behind/XINHUA-File
NAIROBI, Kenya, Nov 11 – The Commission on Revenue Allocation (CRA) has unveiled a new formula for sharing revenue among counties that if approved, will see a majority of counties get over Sh2billion higher in the next financial year.

CRA’s Director of Research and Policy Lineth Oyugi says this is after introducing two new parameters to the current five parameters which include the development factor and personnel emolument factor.

Using the anticipated sum of Sh279 billion, Nairobi still remains top, getting Sh15 billion from this year’s share of Sh11.3 billion followed by Kakamega County which would get Sh9.4 billion from Sh7.7 billion.

“We have used a participatory approach in coming up with this recommendation. We went to 45 county governments and we were able to talk to the county executives… that is the Governor and the Chief Officers. We also consulted the county budget and appropriation committees,” Oyugi said while presenting the new formula to the media.

The counties to get the least allocations but still higher than the current financial year are led by Lamu at Sh2.2billion from Sh1.7billion followed by Tharaka-Nithi at Sh3.3billion from Sh2.7billion.

In the new formula, the commission uses seven parameters which include population at 45 percent, equal share at 25 percent, poverty at 18 percent, land area 8 percent, fiscal responsibility 1 percent, development factor at 1percent and personnel emolument factor at 2 percent.

“However, to address the challenge of over-redistribution in the first generation revenue sharing formula and to cushion counties experiencing huge personnel emolument costs, the weight on the parameter on poverty and fiscal responsibility have been reduced from 20 percent and 2 percent to 18 percent and one percent respectively,” Oyugi said.

Top five counties to get the highest allocations based on population include Nairobi, Kakamega, Kiambu, Nakuru and Bungoma while the lowest share will go to Lamu, Isiolo, Samburu, Tana-River and Taita-Taveta in that order.

Using the poverty level measure, Kilifi, Mandera, Kwale, Turkana and Nairobi get the highest share, while Lamu, Kirinyaga, Tharaka-Nithi, Samburu and Embu gets the least allocations.

Based on the new development factor, five counties to get the highest share are Turkana, Mandera, Kakamega, Nairobi and Nakuru, while the bottom five counties are Lamu, Isiolo, Taita-Taveta, Elgeyo-Marakwet and Kirinyaga.

On personnel emolument factor, Nairobi, Nakuru, Kiambu, Nyeri and Kakamega top the list while Mandera, Lamu, Wajir, Tana-River and Samburu lag behind.

CRA Chairman Micah Cheserem says the new formula now awaits the Senate’s approval and which will be used for the coming three financial years.

“The current formula that we are using expires in June 2015. So we are going to give you the next formula which yesterday, the Chief Executive Officer launched with the Senate, but which the CRA is required to come up with recommendations,” Cheserem said.

The commission will in three weeks time unveil the exact amount they will recommend to go to counties and the national government.

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