News

A new proposed formula released by the Commission on Revenue Allocation (CRA) for sharing of revenue among the 47 devolved units relies less on poverty levels in the sharing of Billions from the National Treasury among the counties.
The national government will raise share of allocations to the devolved units that increase their own internal revenue collection during the preceding financial year.


Currently counties share revenue based on five parameters, namely population (45 per cent), equal share (25 per cent), poverty (20 percent), land area (eight per cent) and fiscal responsibility (two per cent).
The proposed formula will see the weight of poverty in determining the revenue share drop to 18 per cent.
“We found that many counties rely on revenue shares from Nairobi.  Counties should be encouraged to collect more and not rely on Nairobi,” said Mr. Micah Cheserem, CRA Chairman during a briefing at the Senate in Nairobi on Thursday last week.
“Nairobi, Kiambu, Nakuru and Machakos are examples of counties that have improved revenue collection due to automation of their revenue collection systems.  Based on that these are the counties we are rewarding this year,” he said, adding that Busia, Mandera, Samburu, Turkana and Vihiga performed dismally.
CRA has also introduced a new parameter labelled the development factor with a weight of one per cent. A recent World Bank report ranked Mandera the poorest county. The report also ranked Kiambu as Kenya’s richest county with a gross domestic product per capital of $1,785 followed by Nyeri ($1,503), Kajiado ($1,466), Nakuru ($1,413), and Kwale ($1,406).
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