Revenue allocation formula deadlock hurting city service delivery

Garbage collection and water connection in informal settlements are among the services to be severely affected if the standoff in the Senate over county cash distribution formula persists.

The senators meet for the seventh time in two months Tuesday to try and strike a deal on how Sh316.5 billion allocated to the 47 counties for this financial year will be shared.

The standoff persists despite the rapidly rising cases of the coronavirus.

Nairobi is already the country's hotspot - it has 50 per cent of the 20,636 of positive cases.

Road projects are other likely casualties.

Most service delivery functions (development projects) were earlier in the year transferred from the county to the Nairobi Metropolitan Services, which falls under the Office of the President.

Following a June 20 Executive order, the National Treasury allocated Sh15.9 billion of Nairobi's 2020-21 equitable share to the NMS headed by Mohamed Badi.

Already, the NMS is undertaking non-motorised transport projects and has sunk 93 boreholes, 51 of them in informal settlements. It is cleaning the streets, informal settlements and has restored street, lights among others.

Last month, the County Assembly froze development projects for the 2020 -2021 financial year until the County Revenue Allocation Bill is passed.

The revenue allocation formula deadlock has stalled the passage of the Bill and cash disbursement schedule to allow the counties to access funds.

The two were to have been passed by June 30 for disbursement to start by July 15 to enable the counties to pay salaries and perform other functions.

Last month the county assembly approved a Vote on Account to allow the payment of salaries to both the assembly and executive staff.

The expenditure should not exceed Sh12.5 billion or 25 per cent of the amount contained in tabled estimates.

The county can only operate half the proposed Sh31.4 billion budget and withdraw Sh12.5 billion from the County Revenue Fund to finance its operations.

According to Finance, Budget and Appropriation Committee chair Chege Mwaura, the expenditure will be for recurrent and not for development projects.

“The Sh12.5 billion will be spent on recurrent expenditure such as payment of county employees and members’ salaries and ensuring seamless delivery of services in critical sectors such as health and education,” Mwaura said.

He said the yet to be passed Bill is critical as it gives clarity on the county’s equitable share of revenue, conditional grants, and treatment of allocations to the NMS.

“Without the approval of the County Revenue Allocation Bill into law then the County Assembly would be engaging in guesswork if it purports to appropriate sums whereas amounts meant to fund more than half of the budget have not been agreed on,” Mwaura explained.

Before the assembly drafts an appropriations bill, the Senate must pass the County Revenue Allocation Bill which gives guidance on how much money will be allocated to Nairobi in equitable share, how much to go to NMS and how much remains for allocation to other functions under the county government.

The latest Committee on Revenue Allocation formula has become highly divisive.

The formula sought to enhance service delivery, promote balanced development, encourage counties to raise their own cash and prudently use public resources.

It was to last for six financial years. Its critics say it hurts rather than helps the poor counties.

Were the formula to be passed without amendment, some counties would gain millions of shillings as others lose.

Last week, Nairobi Senator Johnson Sakaja proposed that the counties continue to share the Sh316 billion using the existing formula.