Senate finally passes new formula; this is how it will work

Tony Mukere

September 17, 2020 5:42 PM

Win-win situation prevails

Senate finally passes new formula; this is how it will work

The Senate has finally passed the Counties Revenue Sharing formula that will be used for the next five years.

The Senate adopted a proposal by the Senate Special Committee formed to come up with an agreeable formula.

The new formula maintains the existing disbursement for the financial year 2020/21.

For the financial years, 2021 to 2025, the counties will start getting a new allocation based on the formula that was passed today.

The Senate factored in President Uhuru Kenyatta's promise to up the share allocated to counties by Sh50 billion and worked with Sh370 billion in disbursement of revenue.

Half of the Sh370 billion allocation will be disbursed based on the amount each county received in the 2019/20 financial year.

The rest of the money will be subjected to the formula parametrers:

18 percent population index

17 percent health index

10 percent agricultural index

5 urban index

14 poverty index

8 percent land area index

8 percent road index

20 basic share index

The new formula was passed on the condition that no county will receive less allocation than what it received in 2019/2020 financial year.

The Senate had been under pressure to pass the new formula after county governments threatened to halt operations due to delay in disbursement of funds.

County governments have had a three-month delay in receiving the allocation of the 2020/21 financial year.

The struggling counties had been left to operate on bank overdrafts and independent revenue allocation channels.

Here is how the new formula will translate in new allocations: