When the Division of Revenue (Amendment) Bill, 2024 was introduced in the National Assembly in July, the country had just recovered from weekly protests spearheaded by Gen Z.

Initially, the protest’s focus was on the rejection of the country’s Finance Bill, 2024, but attention shifted to President William Ruto’s stepping down, police brutality, corruption, and politicians’ broken promises and extravagant lifestyles.

The Bill, which seeks to provide for equitable sharing of the country’s revised revenue raised by the national government among the national government and county governments, has now made governors clash with the National Assembly.

This week, governors clashed with the National Assembly over the Division of Revenue (Amendment) Bill, 2024, which seeks to revise the 2024/25 Equitable Share from KSh400 billion to KSh380 billion in line with Supplementary Budget 1.

President Ruto assented to the Division of Revenue Act, 2024 on June 10 this year.

Kakamega County Governor Fernandes Barasa has already raised the alarm over the proposed reduction, warning that cuts would paralyse county operations, particularly in critical sectors like healthcare. The governor is stressing that counties would be unable to sustain essential services if the reductions are implemented.

In particular, the Division of Revenue Act, 2024 provides that the total shareable revenue is KSh2.9 trillion, out of which KSh2.5 trillion was allocated to the national government and KSh400 billion was allocated to county governments.

The amounts in the Division of Revenue Act, 2024 may only be realised if the national government collects the projected revenues.

Following the rejection of the Finance Bill, 2024, the revenue that the government had initially projected to collect has been reduced; this figure has been revised downwards, a reduction of KSh346 billion.

The governors are demanding the deletion of Clause 2 of the Bill,  implying that they want the allocation to be retained at KSh400 billion as per the Appropriation Bill, 2024.

The governors are also demanding the deletion of section 1 of Clause 3. This means they are rejecting the proposal that any shortfall in revenue nationally in 2024/25 be borne equitably by the two levels of government.

Additionally, the governors want Clause 3(b) deleted, which prescribes that burden sharing upon revenue shortfall shall be capped at 15% of the shortfall for counties.

Furthermore, the county bosses are also pushing for the deletion of the Schedule under Clause 4, implying that the entire proposal with total sharable revenue at KSh2.602 trillion and Equitable Share at KSh380 billion has been rejected.

Appearing before the Senate Finance and Budget Committee to deliberate on the Division of Revenue (Amendment) Bill, 2024, Embu County Governor Cecily Mbarire accused the National Assembly of undermining devolution, while Tharaka Nithi Governor Muthomi Njuki lamented the lack of county consultation in the passing of the Bill.

“We have been turned into beggars. The national government needs to tell us if they want to do away with the counties,” said Governor Njuki.   

Understanding the Bill

To address the shortfall, the Division of Revenue (Amendment) Bill, 2024 proposes reducing the amount allocated to the county government to KSh380 billion. This represents 5.81% of the total revenue shortfall, which is KSh20.12 billion.  

Even with this reduction, county governments will still receive KSh380 billion, which is above the constitutional threshold of 15%.

The national government’s share of revenue raised nationally has been adjusted downward to KSh2.214 trillion. This shortfall in the share of national government revenue has been partly covered by adjustment of budgetary allocations to the Executive, the Legislature, the Judiciary and constitutional commissions in the financial year 2024/25.