- County governments will receive Sh387 billion in the current finance year after mediation between the Senate and the National Assembly.
- This allocation is Sh2 billion higher than last year’s allocation, providing a crucial boost to devolved units.
- A mediation committee, co-chaired by Senator Ali Roba and MP Ndindi Nyoro, helped resolve a standoff over the Division of Revenue Bill, 2024.
- The deal ensures that counties remain operational despite economic challenges and delays in legislative processes.
After weeks of heated negotiations and gridlock, county governments are set to receive Sh387 billion for the 2024 financial year. This figure, agreed upon by a mediation committee from both the Senate and National Assembly, marks a Sh2 billion increase from last year’s allocation, offering much-needed financial support to devolved units that were on the brink of a cash crisis.
Senator Ali Roba, who co-chaired the mediation committee, announced the agreement after a lengthy session that saw journalists excluded from the discussions. “The figure we have agreed upon is Sh387 billion as the mediated position for county governments,” Roba confirmed.
The deadlock over the Division of Revenue Bill, which determines how national revenue is shared between national and county governments, had caused significant tension. Senators were advocating for an allocation of Sh400.1 billion, while MPs proposed a slightly lower Sh380 billion. The formation of the mediation committee helped bridge the gap, resulting in the Sh387 billion compromise
Roba highlighted that the decision was based on a careful evaluation of the country’s current economic situation. “We have to make sure counties remain operational, especially with Parliament heading into recess,” explained MP Ndindi Nyoro, co-chair of the committee. Nyoro added that the intention was to prevent counties from stalling while Parliament was on break.
Several factors influenced the committee’s final decision. Nyoro emphasized the rising costs counties are facing, including new levies in healthcare and housing, as well as additional payroll taxes. He also acknowledged the extraordinary nature of the current financial year, which lacks a Finance Bill.
Inflationary pressures were another consideration, leading the committee to settle on the Sh387 billion figure. The deal was also rooted in the principle of fairness, as Roba pointed out: “Just like with employees if you agree to pay someone a certain salary unless a major event occurs, you don’t reduce their pay.”
The mediation agreement clears the way for the passage of the revised Division of Revenue Bill, 2024, and the amended County Allocation of Revenue Bill, 2024. These bills will allow the Treasury to begin disbursing the agreed funds to counties, ensuring that essential services and development projects continue without interruption.
The earlier version of the Revenue Bill had been passed by Parliament but was rejected by the President due to the withdrawal of the Finance Bill. This new agreement is now expected to provide the financial stability that counties need to maintain operations and support growth.
