(Kenya Parliament buildings)
Kenya’s Senate Committee on Finance and Budget has adopted the third basis for allocating national revenue among the counties. Counties are entitled to receive an allocation from revenues raised nationally for the execution of their functions.
Once every five years, the senate is mandated by the constitution to determine the basis for allocating the share of the national revenues among the counties. Further, the sixth schedule stipulates that the first and the second determinations of the basis of the division of revenues among the counties shall be made at a three-year interval and the subsequent formulae would be applicable for five years.
The first basis was approved in November 2012 and was used for financial years 2013/14; 2014/15, and 2015/16; 2016/17. The second basis was approved in 2016 and was used to share revenues for years 2017/18 and 2018/19, 2019/20. The two bases have been in existence cumulatively for seven years.
The Committee recommended that the senate adopts the third basis for sharing revenues among the counties as follows ;
Revenue allocation to enhance service delivery takes into account the health services, agricultural services, other country services, and the minimum share. The health expenditure need will be determined by three measures; health facility gap, three-year average outpatient visits to levels 2 and 3 health facilities, and three years average in-patient in level 4 and 5 hospitals.
The agriculture allocation will be determined through the county’s proportion of rural households as provided in the 2019 population census with 0.5% of the allocation shared equally among all the counties.
The share for other county services will be determined by the population and the county headcount. The minimum share allocation will share 19% equally among the counties with the 1% shared based on the inverse of population.
Revenue allocation to promote balanced development will take into account land, roads, poverty and urban service. Land will look into the county proportional distances (square root of the county land area) from headquarter to the furthest point. Roads will look into the rural access index, poverty relates to the poverty head count as provided by the Kenya Integrated Household budget survey 2015/16. On the other hand, the urban service criterion will analyze the urban households based on 2019 population census.