In a recent address to the Senate Finance Committee, the Council of Governors (CoG) issued a stark warning regarding the financial stability of counties, emphasizing the urgent need for a substantial increase in allocated revenue. Led by Chairperson Anne Waiguru, the council outlined various financial challenges faced by counties, including a burgeoning wage bill, pending bills, and proposed tax changes.
According to Waiguru, counties are on the brink of collapse if they are not allocated Ksh.450 billion in sharable revenue. She highlighted the potential exacerbation of financial strain due to new deductions such as the Housing Levy and contributions to the National Social Security Fund (NSSF), estimating an additional expenditure of billions for counties.
Furthermore, the introduction of contributions to the Social Health Insurance Fund (SHIF) presents another hurdle for counties, as the exact number of beneficiaries remains undetermined. Waiguru stressed the importance of factoring in the cost of implementing the doctors’ Collective Bargaining Agreement (CBA), estimated at Ksh.5.8 billion, into the sharable revenue allocation.
Governor Muthomi Njuki echoed these sentiments, emphasizing the critical need for adequate funding to honor agreements with healthcare professionals. He warned that failure to secure sufficient funds would result in an inability to pay doctors, despite signing new CBAs.
Waiguru urged the Senate to champion devolution, emphasizing that despite devolved functions, funds are often retained by ministries, impeding counties’ financial autonomy. She emphasized that the requested funds are essential for meeting basic needs rather than frivolous expenditures.
COG vice chair Ahmed Abdullahi expressed dismay at the disproportionately low increase of Ksh.6 billion from the previous allocation, considering the significant rise in devolved functions.
Senator Ali Roba, while sympathetic to counties, cautioned against making politically appealing statements without realistic financial backing. However, he assured the committee’s commitment to supporting counties in securing more funds than the proposed Ksh.391 billion in the budget policy statement.
The standoff between the National Assembly and the Senate over the Division of Revenue Bill is expected to prompt negotiations, as both bodies propose differing figures. The outcome of these negotiations will have significant implications for the financial stability of counties and the effectiveness of devolution in Kenya.
