The New CRA Formula Seeks To Disadvantage Us Further
By Bilal Mohamud
A year after Britain granted Kenya Madaraka – internal self-rule- the government under Mzee Jomo Kenyatta formulated its first-ever policy framework to articulate the Country’s development blueprint. This framework is what later came to be known as The Sessional Paper No. 10 of 1965 on African Socialism and Its Application to Planning in Kenya, the effects of the controversial paper continues to ail this nation 56 years later.
First and fundamental, the policy paper preferred a capitalistic approach of favoring short-term economic growth to a systematic long term social development (wealth redistribution). Accordingly, therefore, it adopted an exclusionist approach from the word go and skewed public investments towards already developed and high potential areas as opposed to investing in the arid and semi-arid lands (ASALs). These areas have never recovered from this blunder. Whether the blunder was premeditated or accidental is a discussion for another day. But even so, it was EXCUSABLE at that particular point in time for a young, naïve nation that was just starting to get her things together.
However, after over four decades of systemic and institutionalized marginalization of the ASALs; a long, rigorous, broad-spectrum battle for equitable distribution of the national cake by citizens from these areas, experts from across the country and political goodwill, a beam of light at the end of the dark tunnel was spotted.
A New Dawn – The Constitution of Kenya, 2010.
Amongst the most fluorescent of rays from this beam of light was devolution. A godsend, the concept of devolution envisioned a deliberate mechanism to put people in charge of their own affairs- destiny even. Put simply, the people would be able to govern themselves and while at it, use their resources to meet their own needs and tackle their own specific challenges. Devolution was a new baby whose birth brought so much joy to Kenyans and especially those who for long have complained about not getting a share of the National cake.
The CoK 2010 under Article 176 created 47 units called county governments. It further created new instruments and empowered existing organs -agencies, commissions, councils, and authorities- to facilitate a reasonably good environment within which these units would operate. The Transition Authority (TA), The Senate, the Council of Governors, the Intergovernmental Relations Technical Committee are just but examples.
Commission on Revenue Allocation, CRA, is a good example.
Established under Article 215. (1), the CRA is principally mandated to make recommendations concerning the basis for equitable sharing of revenue raised by the national government. The Constitution, in assigning the CRA this delicate function expressly obligates it to ‘promote and give effect to the criteria set out in Article 203. (1) under the Principles and Framework of Public Finance. National interests, the needs of the national government, national obligations, and fiscal capacity among others comprise these criteria. Substantially evident also, is the fact that a lot of emphasis in the criteria goes to the need to protect the interests of the counties and facilitate their optimum operationalization.
Article 203. (1) asks of CRA to ensure; 1), county governments are able to perform functions allocated to them; 2), the fiscal capacity and efficiency of county governments are enhanced; 3), economic disparities within and among counties is recognized and remedied; 4), the need for affirmative action in respect of disadvantaged groups is highlighted and, 5), an environment of desirable, stable and predictable revenue flow is realized.
The currently proposed formula at best sidesteps the bulk of the aforementioned criteria.
Formulated upon the expiry of the previous one in December last year, it puts cluster weights on key parameters that define the counties’ and indeed the country’s socio-economic status. Under the existing formula, the proportion of the population, poverty index, and land area accounts for 45%, 20%, and 8% of the total money received from The Exchequer in that order, with equal share proportioned at a minimum 25% across the board for all counties.
The new formula proposes to reduce the weight of some parameters while increasing the weight of others. The poverty index loses 2 percentage points to 18%. This alone is a big loss for counties whose poverty index is relatively higher. Also, the population parameter, even though still maintained at 45%, is further segregated into health (17%), agriculture (10%), and other county services (18). Now, on the face of it, 45% seems to be an uninterrupted cluster weight but this only tells half the story.
What it doesn’t tell is the fact that, in essence, this formula proposes more funds to be allocated to the counties based on the development status of these counties. Simply, the counties that are more developed (with more hospitals, more schools, more roads, more agriculture-oriented) get more money than those counties which are less developed. CRA bases this on an argument that more money is needed to maintain more roads, more hospitals, more schools and to incentivize agriculture more.
But the problem with this argument is that it is as lazy as it is neglectful. It is also a slap on the face of our national values and the principle of equitability that underpins devolution. Further, it fundamentally goes against the criteria set out in Article 2013. (1), which obligates CRA to ensure the performance of county functions is not crippled, economic disparities between and among are recognized and remedied and an environment of desirable, stable, and predictable allocation of funds is realized.
If approved and adopted, a total of 18 less developed counties are set to lose in excess of 17 Billion shillings with the more developed ones benefitting from this loss. Even sadder, is the fact that the majority of these ‘less developed’ counties are those that have been disenfranchised for far too long and whose only hope to catch up with the rest of Kenya was devolution.
Mandera, Isiolo, Wajir, Samburu, Garissa, Tana River, Narok, Lamu, Marsabit, Mombasa are just but examples. This explains the impasse that we have witnessed in the Senate over the formula between those for and those against the CRA-recommended revenue sharing formula.
In my considered view, all Senators championing for the adoption of this formula are either uninformed, selfish, or disingenuous. Their counties could be getting more funds upon adoption of the formula but their support comes at the expense of; defeating the objects of devolution, the principles of public finance, and the letter and spirit of the constitution in which people fought for tooth and nail.
The best Senate can do is pass the County Allocation of Revenue Bill, 2020, allow the National Treasury to disburse the 316 Billion shillings using the existing formula, as the Senator for Elgeyo Marakwet, Hon. Kipchumba Murkommen suggested. Then they can give themselves ample time to debate, distill and refine the formula that is before them so that whatever basis is adopted is constitutional, legal, fair and but most importantly does not further marginalize the already marginalized.
Au contraire, adoption of this formula as-is will take us back five decades besides entrenching inequity, oppression, and injustice -social vices which we have ferociously fought for close to half a century!
The writer is a social justice defender and can be reached through; email@example.com