Oxfam Firm Urges MPs to Review Oil Revenue Shares

British nonprofit firm Oxfam on Thursday urged Members of Parliament (MPs) to remove clauses that limit oil revenue shares for county governments and communities in the Petroleum Bill.

According to Oxfam, the legislators ought to find a flexible formula which will allow oil revenues going to counties increased as soon as absorption capacity are addressed by the relevant authorities. 

The Bill, which covered the Turkana County oil fields, proposes that a 20 percent share of oil revenues goes to counties and five percent to communities, with the national government taking 75 percent.

[caption caption="File image of Turkana Governor Josphat Nanok"][/caption]

However, the oil revenues to counties ought not to exceed the annual allocations by the Government as well as that of the communities only limited to 25 percent of what the county is allocated according to the law.

Oxfam noted that the Parliament should reconsider the ceiling proposed in the Bill as the reasons cited are not adequate to deny counties the oil billions once the country begins commercial production by 2022.

However, the national government had stated that the county governments and communities have no capacity to absorb the billions hence the need to limit the number of revenues they are given.

Oxfam further noted that that reason is not sufficient since that could be developed.

"It is important to note, however, that the concerns around absorptive capacity need not result in a reduction of the percentage of revenue due to the county governments and the local community.

"On the contrary, concerns around absorptive capacity should enable planning for capacity reforms at national and county government levels and provision of support for effective oversight and prudent monitoring of the transfers and use of sub-national payments," the organisation exclaimed.

The Bill was tabled in Parliament in February this year but stalled due to the differences between Majority Leader Aden Duale, who sponsored the Bill, and the Committee on Energy, who according to Duale "had introduced too many and unnecessary changes" to the proposed law.

[caption caption="File image of Majority leader Aden Duale"][/caption]