NAIROBI, 9^th April – The Senate Committee on Finance and Budget, chaired by Sen Charles Kibiru, held a meeting with the National Treasury, Commission on Revenue Allocation (CRA) and the Attorney-General (AG) as part of stakeholder engagement on the Division of Revenue Bill, 2021.

The meeting deliberated on the ramifications on the DoRB in light of the December 2020 Ruling by Justice J. A. Makau in High Court Petition 252 of 2016.

Paragraph 72 of the ruling in part states that “…It is trite from the language used in Article 202 as read with Article 218(1)(a) of the Constitution, conditional or non-conditional grants are not an item to be provided for under the Division of Revenue.”

Further, Paragraph 67 of the same ruling expects conditional grants allocated to counties be sent through the County Revenue Fund (CRF) for specific functions outlined by the National Government.

“In order to facilitate transfer of conditional grants to the CRF there is need to provide a legal instrument which would be an enabler to this process,” reported Albert Mwenda, National Treasury’s Director-General of Budget, Fiscal and Economic Affairs.

Citing the observations of the Technical Committee – comprising representation from the Senate, National Treasury, CRA and AG’s Chambers – Mr Mwenda added that the contemplation of the ruling is inconsistent with the Constitution.

“In light of paragraph 67 of the ruling [which bars County Assemblies from appropriating funds received as conditional grants]…it is clear that the framework contemplated by the ruling is a departure from the provisions under Article 226 of the Constitution and the Public Finance Management Act (PFMA).

The meeting through Fred Mwachi, Senior Principal Counsel at the AG’s Office, heard that the Office had issued a notice of appeal on the ruling.

Sen (Dr) Ochillo Ayacko, who serves as the Finance Committee’s Vice chairperson, appreciated that an appeal was within the right of the parties, but noted that litigation would be time consuming and limited in scope.

“If we are to fix this matter in the long-term a legislative solution would address both ends,” Sen Ayacko encouraged.

Others present at the meeting included: Sen Aaron Cheruiyot, Sen Mutula Kilonzo Jr, Sen Rose Nyamunga, Governor Ndiritu Murithi (CoG Chair, Finance Committee), Nelson Gaichuhie (CAS, NT), Dr Jane Kiringai (Chair, CRA) and Phyllis Makau (Director, Parliamentary Budget Office), among others.