The development of the new county revenue-sharing formula has been stalled due to a cash shortage at the Commission on Revenue Allocation (CRA). Chairperson Mary Wanyonyi stated that the commission requires KSh 30 million to finalize the fourth-generation formula.
The financial challenge follows a budget cut by Parliament, reducing the commission’s funds from KSh 516 million to KSh 366 million after the Finance Bill’s withdrawal. This budget cut has severely impacted the commission’s ability to carry out its core functions, including the creation of the revenue-sharing framework. Wanyonyi emphasized that only 9% of the current budget is available for programs, with most funds allocated to personnel and operational expenses.
The commission was initially expected to submit the final revenue-sharing formula to the Senate by July, but financial constraints have delayed this. The framework is intended to guide county revenue distribution from 2025-26 to 2029-30. Although a draft formula was released in September after consultations with various stakeholders, including the Council of Governors, the CRA is still processing feedback and needs more funds for further engagement.
The proposed formula prioritizes population as the key determinant of revenue allocation, assigning it a 36% weight, up from the current 18%. This decision has sparked criticism from leaders of less populous counties. Geographical size is also considered, with an increased weight of 10%, though some leaders are advocating for water bodies to be included.
Other factors in the draft include a reduced emphasis on road infrastructure, with the index dropping to 4% from 8%, and a slightly increased basic share allocation of 26%. The CRA aims to address developmental disparities using the poverty headcount in line with Article 203 of the Constitution.
Once the final proposal is submitted, the Senate will refine and approve it by December to determine the revenue share for the next fiscal year.
