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Counties are projected to lose Sh20 billion in the current financial year as President William Ruto reorganizes the budget following the withdrawal of the Finance Bill, 2024.
In a memorandum to Parliament, President Ruto declined to sign the County Allocation of Revenue Bill, 2024, which had proposed an allocation of Sh400.1 billion to devolved units. Instead, he has recommended amending the allocation to Sh380 billion, significantly impacting county funding.
“In exercise of the powers conferred on me by Article 115 (1) (b) of the Constitution, I decline to assent to the County Allocation of Revenue Bill, 2024, and refer the Bill for reconsideration by the Senate,” Ruto stated. He urged that the Bill be amended by replacing the First Schedule with a revised schedule attached to his memorandum.
This new proposal is Sh5 billion less than the equitable share received by county governments in the previous financial year and Sh20 billion less than the current allocation.
Ruto cited the failure to enact the Finance Bill, 2024, as the reason for this reorganization of the government’s financial arrangements. To override the President’s memorandum, either House of Parliament would need a two-thirds majority vote—a challenging task.
“The Houses of Parliament shall either, by a majority vote, amend the Bill in light of the President’s reservations or, by a two-thirds majority vote, pass the Bill without amendments that fully accommodate the President’s concerns,” according to Article 115 of the Constitution.
Controversy surrounds the President’s request for amendments to the County Allocation of Revenue Bill, 2024. This Bill is essential for distributing funds among the 47 devolved units based on the national budget.
Lawmakers and legal experts argue that the President cannot call for amendments to the County Allocation Bill without also modifying the Division of Revenue Act, which was previously passed and allocated Sh400.1 billion to counties.
Senate Majority Whip Boni Khalwale questioned the validity of the President’s memo, stating, “What would necessitate the Allocation Bill to be returned if the Revenue Bill has been assented to?”
Nairobi Senator Edwin Sifuna emphasized that the President has no role in determining county revenue shares. “We have vowed that counties will not lose even a single penny from what we passed,” he asserted.
Nairobi Governor Johnson Sakaja condemned the reduction in county allocations as a breach of the law, noting that amendments cannot be made to the Division of Revenue Bill that the President has already signed. “The law is clear that where there is a shortfall, the national government will bear it,” Sakaja explained.
Kisii Senator Richard Onyonka, a member of the Budget and Finance Committee processing the President’s memorandum, indicated that the committee would bring the issue back to the Senate for further deliberation, urging transparency in the fight for devolution.