County governments are set to receive Sh387 billion for the current fiscal year after a mediation committee composed of members from the Senate and the National Assembly reached an agreement. This resolution comes after prolonged negotiations and represents an increase of Sh2 billion compared to the previous financial year’s allocation.
“The agreed figure is Sh387 billion as the mediated position for county governments,” Mandera Senator Ali Roba announced following a tense meeting where journalists were barred.
The agreement provides relief to counties that faced the risk of a cash crisis due to delays stemming from disagreements between the Senate and the National Assembly.
The mediation committee on the Division of Revenue Bill, 2024, was co-chaired by Mandera Senator Roba and Kiharu MP Ndindi Nyoro. This Bill determines how national revenue is shared between the national and county governments.
The dispute arose from senators advocating for Sh400.1 billion, while MPs were firm on Sh380 billion. This deadlock necessitated the formation of an 18-member mediation team to resolve the matter.
After extensive discussions, Roba and Nyoro announced the Sh387 billion agreement, stating that the decision was made after evaluating the country’s economic realities and the financial obligations counties would face during the fiscal year.
Ndindi Nyoro highlighted key considerations, including inflation, new levies such as the housing levy and additional healthcare costs, and the absence of the Finance Bill. “We agreed to allocate Sh387 billion to support counties given these extraordinary circumstances,” Nyoro explained.
The mediation committee also emphasized that counties needed predictable funding to avoid disruption of services.
This compromise allows for the passage of the revised Division of Revenue Bill, 2024, and the amended County Allocation of Revenue Bill, 2024, ensuring the Treasury can seamlessly disburse funds to county governments.
Previously, Parliament had passed the Revenue Bill, but it was rejected by the President following the withdrawal of the Finance Bill.
