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BBI: The Fallacy of Revenue Allocation Increment

President Uhuru receives the BBI report from the taskforce Chairman, Senator Yusuf Haji|COURTESY

One of the key sweeteners in the BBI is the purported increase of revenues to counties from 15% to 35%. Proponents of BBI, including CoG Chair, have rallied Kenyans in various counties in this regard, pledging that they will get more than twice as much funds as they are getting now. Nothing could be further from the truth!

For the past 8 years of devolution, total revenue allocations to counties have ranged between 30% to 43% of the national revenue except this financial year (2020/21) when shareable revenue was maintained at the same amount as in the previous year. The annual AVERAGE allocations to counties was 36% throughout this period as shown in the table below (source: Division of Revenue Acts 2013 – 2020). Hence, purporting to increase revenues to counties from 15% to 35% is hot air!

Revenues allocated to counties are based on functions transferred to them from national governments. As a result, there is no way these allocations would have been lower than this percentage, based on functions already devolved during Kibaki government. Uhuruto has not devolved any functions since taking office.

Similarly, the maximum funds that can be allocated to counties cannot exceed 40% unless more functions are devolved to counties. Education, security & defense ministries alone take up nearly 50%, not to mention16 other ministries, state agencies, constitutional commissions, judiciary, parliament and above all the national public debt redemptions and pensions. No one should cheat Kenyans that with BBI, up to 50% of the revenues will go to counties.

The opposite is true. With the rising public debt redemptions, ever-increasing public service and the so-called legacy projects, Big 4, etc, and declining revenues, the revenue allocations percentage will be on a downward trend. Even the 36% average we had past years may not be realized in future. You can take it to the bank! Today, Treasury can hardly disburse funds to counties because it is cash starved. And this financial year was the lowest allocation to counties in 8 years – only 27%!

Hence, its all hogwash; mere sugar-coating to canvas support for BBI.

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