The Commission on Revenue Allocation (CRA) has concluded its consultations with all 47 county governments on the draft Fourth Basis for Revenue Sharing Among Counties Formula.
This new formula is crucial for determining how national government funds are allocated to various county governments, aiming to promote fairness and balanced regional development.
The Fourth Basis for Revenue Sharing Formula allocates funds based on several key criteria.
It considers population size, land area, poverty index, and fiscal capacity.
Counties with larger populations will receive more resources to meet the needs of their residents.
Similarly, larger counties in terms of land area may get additional funds to cover the costs associated with extensive service delivery.
Poverty rates are also a significant factor, with higher funding directed to counties with greater socio-economic challenges.
Fiscal capacity is another consideration, ensuring that counties with lower revenue-raising abilities receive support to bridge the gap between their needs and their revenue.
"CRA sticks to the revenue-sharing criteria in Art. 203 of the Constitution: county capacity to perform functions, development needs, economic disparities, affirmative action, revenue potential stability & predictability of allocations," the commission stated.
The Approach
The formula uses a weighted approach where these factors are assigned specific weights based on policy priorities.
This approach aims to ensure equitable distribution of resources and address regional disparities.
By doing so, the formula supports balanced development and ensures that all counties can provide essential services and promote local development.
In its recent meetings with county governors and regional economic blocs, the CRA pledged to incorporate feedback from these consultations into the final formula.
The goal is to refine the proposal to better address the diverse needs of each county while adhering to the criteria established under Article 203 of the Kenyan Constitution.
This article outlines principles such as fairness, economic disparities, and regional development needs, which the CRA is committed to upholding.
Council of Governors Chairperson and Kirinyaga Governor Anne Waiguru highlighted the importance of using up-to-date and reliable data in the formulation of the new revenue-sharing proposal.
During the meeting with the CRA, she emphasized that the formula’s indicators—including basic share, population size, geographical area, poverty index, gross county product, and the state of paved and unpaved roads—are designed to ensure equitable development across all counties.
"The COG today met with CRA to review the ‘Fourth Basis for Revenue Sharing Among Counties Formula’ proposal. Key to this formula is the availability of dependable up-to-date data and ensuring equitable development across all 47 counties as guided by Article 203 of the constitution."
"The formulae indicators are basic share, population size, geographical area size, poverty index, Gross county product, and paved and unpaved Roads. A special committee of governors from every region will work with the commission to accommodate recommendations that will enable every citizen access to quality devolved service and development infrastructure," Waiguru explained.
A special committee of governors from each region will collaborate with the CRA to integrate their recommendations, aiming to enhance access to quality devolved services and infrastructure.
By considering factors such as county capacity, development needs, and revenue potential, the formula seeks to create a more predictable and equitable system of resource allocation.
As Kenya moves forward with the implementation of the Fourth Basis for Revenue Sharing Formula, the focus remains on ensuring that every county has the financial resources necessary to meet its residents' needs and promote regional development.
The collaborative efforts between the CRA and county governments reflect a shared commitment to achieving balanced growth and improving the quality of life for all Kenyans.
