Promoting an Equitable Society EQUITABLE SHARING OF RESOURCES
Promoting an Equitable Society EQUITABLE SHARING OF RESOURCES PRESENTATION BY DR. JANE KIRINGAI CHAIRPERSON, CRA PRESENTATION DURING INDUCTION MEETING FOR THE 2017 -2022 GOVERNORS AND DEPUTY GOVERNORS AT DIANI REEF HOTEL, KWALE COUNTY ON 15 TH DECEMBER, 2017
CRA – THE MANDATE • Revenue Sharing (Vertical and Horizontal Sharing) • Financing of and Financial Management by County Governments • Revenue Enhancement (To define and enhance revenue sources at national and county governments) • Fiscal Responsibility (To encourage fiscal responsibility) • Marginalization (Determine, Publish and regularly review the policy 1
DIVISION OF REVENUE – A 216 (1)(A) Make annual recommendations to Parliament on the sharing of Nationally raised revenue between the national and county governments. Principle: “Funds follow functions” 2
EQUITABLE REVENUE SHARES & CONDITIONAL GRANTS ( KShs Billions) 1 247 983 746 811 19, 9 2013/14 2014/15 National Government 31, 28 15, 6 2015/16 Equitable share 3 302 280 260 227 190 Key: 1 100 23, 9 2016/17 2017/18 Conditional Grants 41, 38 4
ANALYSIS OF 2017/2018 EQUITABLE SHARE RECOMMENDATIONS (Kes Billions) 332 302 299 CRA NATIONAL TREASURY 291 NATIONAL ASSEMBLY 4 314 SENATE NEGOTIATIATE D
CAN WE CHANGE THIS NARRATIVE? ? ? V
ALLOCATION OF REVENUE – A 216 (1)(B) Make recommendations to Parliament on the sharing of Nationally raised revenue amongst governments 6 the county
CRITERIA FOR SHARING REVENUE AMONG THE COUNTY GOVERNMENTS No. PARAMETER 1 2 3 4 5 6 Population Basic Equal share Poverty Land Area Fiscal Responsibility Development Support Total First Generation Formula Second Generation Formula Weight (%) 45 25 20 8 2 0 100 Weight (%) 45 26 18 8 2 1 100 7
FINANCIAL MANAGEMENT – A 216 (2) Make recommendations on other matters concerning the financing of, and financial management by, county governments 8
Growth in revenue in relation to growth in wage bill: For every additional 10 Shillings 6 Have gone to salaries & wages [VALUE]% 2014 -15 [VALUE]% 2015 -16 2016 -17 Wages Others 9
PER CAPITA ALLOCATION TO HEALTH & AGRICULTURE 2016/17 9 000 8 000 Lamu 7 000 HEALTH 6 000 Isiolo 5 000 Marsabit 4 000 Baringo Emb T/Taveta Ksumu Kwale 3 000 Mombasa Nairob Laikipia Meru 1 000 Samburu T/Nithi W/Pokot Vihig 2 000 Nyeri U/Gish Migori Bungoma Bomet - re T/River Kis Kitui Wajir Mandera 0 500 1000 1500 AGRICULTURE CITIES MARGINALIZED COUNTIES OTHERS 2000 2500 3000
Enhance Revenue –A 216 (3)(b) To define and enhance the revenue sources of the national and county governments 11
How much counties have collected from 2012/13 - 2016/17 Kes billions 33. 8 35. 32. 26. 3 20. 3 16. 2011/2012/2013/2014/2015/2016/2017
Own Source Revenue Growth 2012/132016/2017 Own revenues in Kshs in Millions 3 500 Mombasa 3 000 2 500 Kiambu 2 000 re 1 500 Nakuru Narok Machakos 1 000 Kisumu Bungoma. Nyeri Kilifi Baringo Kakamega Kisii Isiolo 500 - 200 400 Uasin Gishu 600 800 1 000 1 200 2012/2013 Own Source Revenue in Kshs Million 1 400 1 600
EMERGING ISSUES ON COUNTY AUTOMATION High and hugely varied Costs for the Revenue Management Solutions County A Kshs 23 m County B Kshs 35 m County C Kshs 55 m County D Kshs 85 m County E Kshs 15 m Many Counties have had 2 -4 systems deployed in the county which are not integrated. Revenue Share Models between the Counties and Vendors ranging from 4%-5% to the Vendor. 14
-60% 15 Trans Nzoia Tharaka -Nithi Mandera Nakuru Vihiga Busia Elgeyo/ Marakwet Kitui Garissa Homa Bay Murang’a Kirinyaga Kiambu West Pokot Kajiado Migori Isiolo Narok Nyamira Kakamega Kisii Kwale Nyeri Uasin Gishu Wajir Nairobi City Tana River Laikipia Taita/Taveta Meru Makueni Kisumu Baringo Nandi Bungoma Embu Nyandarua Mombasa Machakos Samburu Kericho Marsabit Kilifi Lamu Siaya Turkana Bomet Own Revenue Source from 2015/16 Vs 2016/17 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50%
Fiscal Responsibility – A 216 (3)(c) To encourage fiscal responsibility to both national and county governments 16 17
DEVELOPMENT BUDGET V/S ACTUAL DEVELOPMENT EXPENDITURE 2015/16 Turkana Kwale Mandera Tana River T/Taveta Cities Marginalized counties OTHERS 17
Determine Policy on Marginalization – A 216 (4) 18
EQUILIZATION FUND TOO SMALL 302 350 Khs BILLIONS 250 280 260 300 227 190 200 150 100 50 7. 7 4. 7 3. 9 0 2013/14 Equitable Share 2014/15 2015/16 2016/17 Equalization Fund 2017/18 19
IF YOU WANT TO GO FAST, GO ALONE. IF YOU WANT TO GO FAR, GO TOGETHER African Proverb 20
THANK YOU 21
COMMISSION ON REVENUE ALLOCATION 14 RIVERSIDE DRIVE GROSVENOR BUILDING , 2 ND FLOOR P. O Box 1310 -00200 NAIROBI re Telephone + 254 -(020) 4298000 0709 822 000 0708 752 539 0731 776 666 Email: info@crakenya. org Website: www. crakenya. org Twitter CRAKenya 22
- Slides: 23