Counties Face Funding Shortages as National Assembly Rejects Budget Bill
Counties in Kenya may experience increased financial shortages following the National Assembly’s rejection of the Finance Allocation Bill 2024. This bill was intended to allocate Sh400 billion to all 47 counties. Instead, the Budget Committee of the National Assembly has proposed a reduced allocation of Sh380 billion.
The disagreement between the Senate and the National Assembly has led to the formation of a mediation committee to find a resolution regarding the bill. The committee has rejected the proposed amendments that would have raised the allocation to Sh400 billion. In their report presented to the assembly, the committee stated that “the current financial constraints faced by the government necessitate a lower allocation.”
National Assembly Speaker Moses Wetang’ula and his Senate counterpart, Amason Kingi, will now be required to establish a joint committee to reach an agreement on a bill acceptable to both houses. According to the constitution, if this committee does not reach a consensus within 30 days, the bill will fail.
Two weeks prior, the Senate had dismissed the Sh380 billion allocation, insisting that they would not accept less than Sh400.1 billion, which was approved under the County Revenue Allocation Act of 2024 (DoRA). The act was re-evaluated to address the budget cut following the failure of the Finance Bill 2024.
In June, President William Ruto was compelled to withdraw the Finance Bill 2024-25 amid nationwide protests, where demonstrators stormed Parliament to voice their opposition to high taxation within the proposed bill. President Ruto stated, “I refuse to sign the Finance Bill 2024 and return it to the National Assembly for the removal of all clauses.”
The government had aimed to pass the bill to secure Sh347 billion for the 2024/25 financial year to fill a gap in its budget of Sh3.92 trillion. After the Senate approved the allocation of Sh400.1 billion, they declined to reduce the counties’ allocation by Sh10 billion due to the non-signing of the Finance Bill 2024.
Senator Ali Roba of Mandera, who chairs the Finance and Budget Committee, criticized the National Assembly for their decision, arguing that the deficit should be covered by both the national and county governments. Roba pointed out that the budget was slashed from Sh3.9 trillion to Sh2.6 trillion, suggesting that the national government should receive Sh2.23 trillion, leaving counties with Sh400.16 billion, as was approved in the County Revenue Allocation Law.
Summary of Proposed Allocations
Allocation | Amount (Sh) |
---|---|
Proposed by National Assembly | 380 billion |
Proposed by Senate | 400.1 billion |
Amount needed by Government | 347 billion |
Total National Budget | 3.92 trillion |
Key Points from the Finance Bill Controversy
Event | Details |
---|---|
Senate’s Response to Allocation | Rejected Sh380 billion; demands Sh400.1 billion |
Formation of Mediation Committee | To resolve disagreements between the two houses |
Presidential Withdrawal of Finance Bill | President Ruto withdrew the bill amid protests |
Criticism from Senator Ali Roba | National Assembly should have covered the deficit |
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