NAIROBI, Kenya – County governments are set to receive Sh387 billion in the current fiscal year, marking a crucial breakthrough after prolonged negotiations between the Senate and the National Assembly.
The deal, struck by an 18-member mediation committee, brings relief to devolved units that had faced the threat of a cash crunch.
The allocation, finalized after weeks of wrangling, is Sh2 billion higher than last year’s Sh385 billion disbursement.
However, it falls short of the Sh400.1 billion initially demanded by senators.
Mandera Senator Ali Roba, co-chair of the mediation team, announced the agreement, terming it a balanced resolution to the standoff.
“The figure we have agreed upon is Sh387 billion as the mediated position for county governments,” Roba stated after a heated session that saw journalists barred from attending parts of the meeting.
The stalemate had emerged from conflicting proposals: the Senate’s Sh400.1 billion versus the National Assembly’s Sh380 billion.
The impasse risked stalling county operations as the Division of Revenue Bill, 2024—essential for splitting national revenues between the national and county governments—remained in limbo.
Kiharu MP Ndindi Nyoro, who co-chaired the committee, underscored the urgency of resolving the matter.
“Our counties were at risk of grinding to a halt. We considered the economic realities and the unique pressures counties face this year, including new levies and inflation,” Nyoro said.
Among the factors influencing the final allocation were additional costs counties are expected to shoulder, such as contributions to the housing levy and increased PAYE obligations for staff.
Both sides made concessions during what Nyoro described as “hours of heated exchanges.”
He emphasized that the mediated amount reflects a commitment to devolution and ensuring continuity in county services.
“We factored in the extraordinary challenges of this financial year, including the absence of the Finance Bill, and inflationary pressures. Sh387 billion is a reflection of shared responsibility between the two Houses,” Nyoro added.
The mediation committee’s resolution also clears the way for the passage of the revised Division of Revenue Bill, 2024, and the amended County Allocation of Revenue Bill, 2024.
This paves the way for the National Treasury to disburse funds without further delays.
Governors across the country had warned of dire consequences if the deadlock persisted, with some counties reportedly struggling to pay salaries and meet operational costs.
The breakthrough offers a lifeline for critical services and development projects.
The legislation had faced another hurdle after President William Ruto rejected an earlier version of the Revenue Bill following the withdrawal of the Finance Bill.
This latest development signals the end of months of legislative gridlock, offering a fresh start for counties to implement their budgets and address citizens’ needs.
The Sh387 billion allocation, while a compromise, is expected to restore stability and reinforce the government’s commitment to devolution amid economic challenges.
The deal, struck by an 18-member mediation committee, brings relief to devolved units that had faced the threat of a cash crunch.
The allocation, finalized after weeks of wrangling, is Sh2 billion higher than last year’s Sh385 billion disbursement.
However, it falls short of the Sh400.1 billion initially demanded by senators.
Mandera Senator Ali Roba, co-chair of the mediation team, announced the agreement, terming it a balanced resolution to the standoff.
“The figure we have agreed upon is Sh387 billion as the mediated position for county governments,” Roba stated after a heated session that saw journalists barred from attending parts of the meeting.
The stalemate had emerged from conflicting proposals: the Senate’s Sh400.1 billion versus the National Assembly’s Sh380 billion.
The impasse risked stalling county operations as the Division of Revenue Bill, 2024—essential for splitting national revenues between the national and county governments—remained in limbo.
Kiharu MP Ndindi Nyoro, who co-chaired the committee, underscored the urgency of resolving the matter.
“Our counties were at risk of grinding to a halt. We considered the economic realities and the unique pressures counties face this year, including new levies and inflation,” Nyoro said.
Among the factors influencing the final allocation were additional costs counties are expected to shoulder, such as contributions to the housing levy and increased PAYE obligations for staff.
Both sides made concessions during what Nyoro described as “hours of heated exchanges.”
He emphasized that the mediated amount reflects a commitment to devolution and ensuring continuity in county services.
“We factored in the extraordinary challenges of this financial year, including the absence of the Finance Bill, and inflationary pressures. Sh387 billion is a reflection of shared responsibility between the two Houses,” Nyoro added.
The mediation committee’s resolution also clears the way for the passage of the revised Division of Revenue Bill, 2024, and the amended County Allocation of Revenue Bill, 2024.
This paves the way for the National Treasury to disburse funds without further delays.
Governors across the country had warned of dire consequences if the deadlock persisted, with some counties reportedly struggling to pay salaries and meet operational costs.
The breakthrough offers a lifeline for critical services and development projects.
The legislation had faced another hurdle after President William Ruto rejected an earlier version of the Revenue Bill following the withdrawal of the Finance Bill.
This latest development signals the end of months of legislative gridlock, offering a fresh start for counties to implement their budgets and address citizens’ needs.
The Sh387 billion allocation, while a compromise, is expected to restore stability and reinforce the government’s commitment to devolution amid economic challenges.
