Members of the National Assembly are debating the Equalisation Fund (Administration) Bill (Senate Bill No. 14 of 2023), which seeks to repeal the Public Finance Management (Equalisation Fund Administration) Regulations, 2021. The Bill aims to provide an administrative framework for the management of the Equalisation Fund, as established under Article 204 of the Constitution. 

The Bill establishes the Equalisation Fund Advisory Board, outlining its structure and responsibilities, including overseeing the identification, selection, and implementation of projects funded under the Equalisation Fund. The board will consist of representatives from the National Assembly, Senate, Council of Governors, the Commission on Revenue Allocation, and other key stakeholders. 

During the debate, lawmakers’ raised serious concerns over the mismanagement and inefficiencies surrounding the Equalisation Fund, questioning its impact over the past two decades. 

Hon. Adan Keynan expressed his frustration on the utilisation of the fund, stating, “20 years later, there’s nothing to demonstrate that the Equalisation Fund has benefitted the intended beneficiaries. We, as MPs, have been sucked into a role that is not ours. The governors want to usurp the mandate of the National Assembly. It is not Sh13 billion, it is Sh70 billion floating between Treasury, the NA, and the counties.” 

The Equalisation Fund (Administration) Bill (Senate Bill No. 14 of 2023) stipulates that the fund should be used for provision of basic services, including water, roads, health facilities, and electricity, to marginalised areas to bring them to the same level as the rest of the country. 

Hon. William Kamket decried the misuse of the fund, citing double allocations by county governments. “One of the ways this fund has been abused is through double allocation and overlapping of projects. You’ll find that a county government has done a road somewhere, and they will allocate a similar amount of money to the same road,” he noted. 

Legislators proposed changes to the fund's administration. Hon. Kamket suggested that the fund should be managed independently from county governments. “I'll be proposing, at the third reading, that the administration of this fund should be moved completely from the counties,” he stated. 

Hon. Rozah Buyu emphasised the need to ring-fence the fund to ensure it is used strictly for its intended purpose. “There’s no way that the Equalisation Fund will be housed or domiciled within the counties. We must cap the priority areas in which this fund should be used, otherwise this fund runs a risk of just being lost within the rest of the funds going to the county,” she said.  

Additionally, the Bill proposes extending the sunset period of the Equalisation Fund for a further non-renewable term of 10 years and repealing the Public Finance Management (Equalisation Fund Administration) Regulations, 2021. 

Hon. Timothy Toroitich raised legal concerns regarding the Bill, stating, “Looking at the intent of this Bill, it raises serious fundamental legal issues. I have read Article 204 of the Constitution and asked myself three questions: Why was the Equalisation Fund created? Why did the Constitution limit the services to be provided under this particular fund? What was the mischief behind the 20-year sunset period?” 

The Bill stipulates that the fund shall consist of one-half of all revenue collected by the national government each year, based on the most recent audited accounts of revenue received, as approved by the National Assembly. It seeks to finance basic services such as water, roads, health facilities, and electricity in marginalized areas. 

The National Assembly approved the second reading of the Equalisation Fund (Administration) Bill (Senate Bill No. 14 of 2023) on February, 26th 2025. Members of Parliament are expected to propose amendments that would ensure the fund serves its intended purpose efficiently and transparently.