Members of the National Assembly on Tuesday, August 6, 2024 began debate on the Division of Revenue (Amendment) Bill, 2024, which seeks to adjust the revenue sharing formula between the national and county governments.

 The Bill was necessitated by a significant shortfall in projected revenue for the financial year 2024/2025, primarily attributed to the rejection of the Finance Bill, 2024.

 Chairperson, Budget and Appropriations Committee, Hon. Ndindi Nyoro (Kihari) told the House that the Bill seeks to balance the budget by borrowing more and cutting expenditure. He pointed out that this was a tough decision that the House had to make.

 "This is a tough decision, but it is necessary, to ensure all levels of Government share the burden of reduced revenue," Hon. Nyoro said.

 Vice Chairperson, Budget and Appropriations Committee, Hon. Mary Emaase (Teso South) seconded the Bill, emphasizing the need to adapt to the new revenue reality.

 The Division of Revenue Act, 2024 allocated Kshs.400 billion to county Governments, based on projected revenue of Kshs.2.9 trillion. However, due to the Finance Bill's rejection, the projected revenue has been revised downwards to Kshs.2.6 trillion, leaving a shortfall of Kshs.346 billion.

 To address this shortfall, the Division of Revenue (Amendment) Bill, 2024, proposes to reduce the allocation to county governments to Kshs.380 billion, representing a reduction of Kshs.20.12 billion. Despite the cut, the amount still surpasses the constitutional threshold of 15 percent of the last audited and approved Government revenue.

 Contributing to the debate, Funyula MP, Hon. (Dr.) Ojiambo Oundo questioned the adequacy of the allocation for counties, urging for a detailed cost analysis of essential services.

 Echoing concerns about the impact on counties, Nairobi County MP, Hon. Esther Passaris proposed a broader conversation about the structure of governance.

 Lawmakers called for the three arms of Government to tighten their belts and re-adjust spending in line with the recently approved Supplementary Estimates. 

 Members further cautioned county governments to focus efforts on managing revenue collected through levies prudently. 

 Debate and consideration of the Bill is expected to resume on Wednesday, August 7, 2024.