, NAIROBI, Kenya, Jun 11 – The National Treasury has allocated a total of Sh287 billion to County Governments in the 2015/2016 financial year.
In his budget statement to Parliament on Thursday, National Treasury Cabinet Secretary Henry Rotich stated that this amount which includes shareable revenue of 259.7 billion and an additional conditional allocation of 27 billion will be used to fund various projects within counties.
The Treasury CS pointed out that this represents 37 percent of the most recent audited revenues approved by the National Assembly which amounts to 776.6 billion in financial year of 2012/2013.
“Parliament has allocated to county governments Sh259.7 billion as shareable revenue following consultations with the Inter-Governmental Budget and Economic Council comprising the Council of Governors, the Commission on Revenue Allocation, the Commission on the Implementation of the Constitution and the Parliamentary Service Commission,” he stated.
He indicated that this will ensure that County Governments deliver on their promises to Kenyans.
“To further support the implementation of the devolved system of government, Sh27 billion has been set aside as additional conditional allocation to counties in the financial year 2015/2016 as follows; Sh4.3 billion as conditional grants for free maternal healthcare, Sh4.5 billion as conditional grants for leasing medical equipment and Sh3.6 billion as conditional grants for level five hospitals,” he said.
Rotich pointed out that the allocation was far more than was stipulated in the Constitution.
“This is more than twice the mandated constitutional threshold of not less than 15 percent. In addition, I have allocated sh35.2 billion to the CDF kitty to fund only National Government functions such as education and security at the constituency level. I have also allocated Sh6 billion to the equalization fund to cater for the back log and allocation for the financial year 2015/2016,” he said.
He stressed that since establishment in 2013, County Governments have sought to introduce various new fees or service charges or to raise existing ones.
He pointed out that if left unchecked, the situation can have a detrimental impact on county revenue in the medium term by driving away businesses and investments.
“In order to promote a conducive business environment and ensure compliance with Article 209 (5) of the Constitution, a clearer response is needed as well better coordination and a well defined framework for regulating business activity throughout the country,” he said.
He explained that the National Treasury has issued guidelines for drafting County Finance Acts or Bills.
“I urge counties to adhere to these guidelines. To complement these guidelines, the National Treasury will begin consultations with all key actors with a view to introduce legislation aimed at coordinating the manner through which business activities are regulated throughout the country. In addition, there is an urgent need to review some business regulatory laws that impact negatively on businesses such us environmental management and coordination Act and The National construction Authority Act with a view to repealing them,” he stated.