President Kenyatta has barely been in office for three months. Yet, since his swearing-in on April 9th, the Head of State has met governors at least twice to put out fires instigated by a belief by county governments that there are schemes by the national government to scuttle the devolved systems. During the latest meeting in State House in June, the President retaliated on the national government’s commitment to support devolution. “The commitment to the process of devolution is both personal and constitutional. The two levels of government were a desire of the people of Kenya and thus we must be fully committed to the success of devolution,” noted the President.
The assurance by President Kenyatta might have gone a long way to resuscitate confidence among the 47 counties that the devolved structures are here to stay and form the foundation of the country’s economic prosperity. In deed the establishment of the Ministry of Devolution and Planning, under the stewardship of Cabinet Secretary Anne Waiguru, was a loud statement of intent of ensuring successful devolution.
According to Kinuthia Wamwangi, the Transitional Authority chairman, the process of devolution is taking shape and now it is in the second phase which kicked off on March 5, 2013 and will end after three years. “Kenyans yearned for a devolved system which will guarantee them more say in terms of decision making and resources control. Our first task was to ensure we have put in place the necessary structures which we have already done. Since March 5th 2013, we have been implementing the second phase of the devolved system,” he says.
But although the country is in an exciting mood after ushering in the new governance structure under which resources are to be shared equitably and Kenyans will have a say over production and utilization of endowed resources, the reality is dawning that making devolution work will not be a smooth sail. Barely three months after the system took effect after the March 4 general elections, all indications point to the fact that devolution is under serious threat. So far, it is evident the threats come in various forms.
First, there is the issue of resource allocation that is proving to be a major cause of confrontation between the national government, Parliament, Senate and county assemblies. Though the constitution is categorical that at least 15 per cent of the national revenue collected by the national government must go to the countries, controversy has surrounded the allocation of revenue under the 2013/14 budget. In what turned out to be a supremacy battle between Parliament and Senate over the Division of Revenue Allocation Bill, it became evident commitment to devolution is superficial. While Parliament allocated Kshs210 billion to the country governments, Senate was clamouring for Kshs258 billion. In the end the Senate, which is devolution’s watchdog, lost the battle after President Kenyatta assented his signature into the bill as passed by Parliament.
“If we’re going to generate the County Allocation of Revenue Bill, after this Division of Revenue Bill has been signed into law without the Senate’s input, that will set a very bad precedent for the future,” observed Senate Speaker Ekwee Ethuro.
Revenue allocation, however, is just one of major problems facing the smooth implementation of the devolved system. While revenue pits the national government versus the county governments, another problem that is proving extremely divisive and could halt service provision and implementation of development project is the battles being fought by governors and county assembly reps in several counties. While some counties like Machakos under Alfred Mutua are setting the pace in terms of thinking development, others like Nakuru, Kiambu, Siaya are embroiled in feuds pitting the governor and county reps over the nominations of county executive committee members. In a county like Nakuru, the County Assembly is even threatening to impeach Governor Kinuthia Mbugua.
Road to Devolution
The promulgation of the constitution three years ago set the implementation of the new governance system. Following the enactment of the Transition to Devolved Government Act, 2012, the Transition Authority (TA) was created with the responsibility of facilitating and coordinating transition to devolved system of government. Since 1964, when the (in)famous Majimbo system of government collapsed, the country has been under a centralized governance system directed from the capital city, Nairobi.
Various legislations have been enacted to spearhead the devolved governance system and ensure the two systems of governments operate without commotion. Since March 4 after the general election, government agencies and line ministries have been transferring functions to county governments. To make devolution meaningful to Kenyans, the national government and county governments are supposed to cooperate in performance of functions and they may set up joint committees and joint authorities. They are also supposed to embrace a system of consortium, negotiation and consensus building in running of state affairs.
To manage the relations between the national and county government, there will be some governance instruments that will be developed. These include national and county government co-coordinating summit, intergovernmental relations technical committee, intergovernmental relations secretariat, council of county governors, joint committees and intergovernmental budget and economic council.
In the event of disputes between the governments, the latter shall make every reasonable effort to settle the dispute amicably by alternate dispute resolution mechanism including negotiation, mediation and arbitration. The Intergovernmental Relations Act provides that all agreements between national and county governments will include an appropriate dispute resolution mechanism with judicial proceeds as the last report.
“The rational is to apply and exhaust the mechanisms for alternative dispute resolution before resorting to judicial proceedings. Parties are encouraged before formally declaring the existence of a dispute to take necessary steps to amicably resolve the matter by initiating direct negotiations with each other in good faith,” explains Wamwangi.
Devolution will provide a new meaning to the country in terms of decentralizing power and resources which for long have been centralized in Nairobi. Outgoing Permanent Secretary in the defunct Ministry of Local Governments Prof Karega Mutahi states that the devolution simply means transfer of power and resources. In 9th and 10th Parliaments, Kenyans enjoyed fruits of devolved funds under the Constituency Development Fund (CDF). Under this programme citizens have been able to initiate and revive stalled development projects within their localities. For example, schools, roads, cattle dips, irrigation farming activities, health centres and community based programme.
In the new dispensation these programme will be undertaken by county governments while still some will be undertaken by the national government. There has been opposition to deployment of county commissioners to coordinate national government affairs at the devolved level. There are also fears that grand corruption the national government has been grappling with is possible to be devolved to the county level.
But Prof Mutahi argues that it is upon the county governors to ensure they have sound governance structures and mobilize adequate resources to assist in execution of the services. “If corruption is devolved to the county governments, then their survival will be jeopardized which might be detrimental in the new dispensations.”
The national government and county governments will share resources as outlined in the constitution. Commission on Revenue Allocation (CRA) has outlined the formula under which national and county governments have to follow when sharing resources. CRA has recommended various parameters to be followed in revenue sharing. Key parameters that will form the basis for revenue allocation include population (45 per cent), basic equal share (25 per cent), poverty index (20 per cent), land area (eight per cent) and fiscal discipline (two per cent) for the next three years.
The county governments will also be generating, collecting revenue from sources they inherited from the former local authorities. Further, devolved administration units inherited more than 40,000 workers who have been working in the former local authorities but will still employ new ones as outlined in respective legislations.
To be able to sufficiently manage resources well, governors of the counties before the end of April launched their budget almost similar in terms of outline and areas to source revenue to the national budget. There are worries of massive sackings of workers inherited by county governments as governors continue to constitute key institutions that will govern the systems.
Analysts predict inevitability by the governors to reduce workforces they inherited with the view to avoiding operating huge wage bill. Former Treasury Director of Budgeting Billy Ngugi says the former councils were operating huge wage bills emanating from excessive personnel, a situation governors would not like to entertain. “Sustaining workers they inherited from the local authorities is going to be big headache which governors would not like to be faced with,” he explains. A key parameter to determine the number of workers to be retained is the county revenue potential and the need to deliver sound services to the tax payers.
But Samuel Nyandemo a Senior Economics lecturer at University of Nairobi claims governors are likely to apply the downsizing programmes so that they can create opportunities for their cronies and relatives. The county governments inherited from the 175 former local authorities over 40,000 employees and more others are likely to come on board after being transferred from the national government. The county governments will continue facing huge daunting task in terms of paying salaries as well as undertaking development projects to spur more growth. To avoid spending over 70 per cent of their revenue to pay salaries as was the case in the former local authorities, governors are more likely to prefer lean and manageable workforce thus justifying the rationalization programme.
Kenya Local Government Workers Union (KLGWU) warns that should the county governors go ahead and sack workers the action will receive sharp protests across the board. Further it will backfire on the governors politically as the sacked workers are also part of the people who voted for them. KLGWU National Treasurer Michael Wachira warns that devolved systems will be locked by numerous industrial actions, legal suits and demonstrations by other interest parties thus derailing expected growth. Of the 175 local authorities inherited only 44 of the total number are financially stable and thus able to pay salaries to their workers. “We are aware there is such a move which will be disastrous to the political class at the county level. We are preparing for such kind of eventualities by ensuring union branches are constituted at the county level,” he observes.
Who controls what?
The county governors are claiming to a share of the national resources such as railways, ports, oil, institutes of higher learning among others. A number of county governments demand that the national government share with them proceeds they amass by tapping resources located within their jurisdiction. When he met the governors, President Uhuru said county governments will take over the running of health, transport, agriculture and tourism in their areas as outlined in the Fourth Schedule of the Constitution from July 1. This, in effect, preempted another possible cause for confrontation.
Murang’a County, for instance, exemplify the delicate question of who owns what? The county government claims that earnings Nairobi City County generate from sale of water tapped from Ndakaini Dam needs to be shared out. Murang’a County governor Mwangi wa Iria recently said his office will institute a committee of experts to start up negotiations with Nairobi County and TA so that a new revenue sharing formula of earnings can be crafted. “Based on the fact that part of water being used in Nairobi County is tapped from our county we will claim a share of the revenue generated by the resource,” Mwangi said.
He added the county is endowed with huge rivers such Maragua, Irati, and Mathioya, and Ndaka-ini Dam whose water is consumed by Nairobi County. Water from Maragua River is used to produce electricity by Kenya Electricity Generating Company (KenGen) at Wanjie sub power station located a few kilometers to Murang’a. The dam has a water capacity of 10 million cubic metres and water tapped from it is fed to Ngethu water treatment plant in Kiambu and later distributed to Nairobi County. “The special committee to be set up soon will work to address among other issues. How much revenue does Nairobi City County generate from the water and how will the new revenue sharing formula look like,” he added.
In Mombasa County, Governor Ali Hassan Joho claims his government should be given full autonomy to manage Kenya Port Authority (KPA) by charging levies over its usage. In its budget estimates, Mombasa County has factored Sh2billion as revenue from the Mombasa harbor although there is no legislation in place or an agreement between the county and port authorities. Other counties are expected to follow suit with similar demands, for example, Turkana, Embu, Kitui and Malindi counties where oil, water dams, coal, and gas have been found in the recent past.
Nyandemo supports the governors’ call to be allowed to use the resources as it will assist in developing the catchment area of the resources. “Resources being tapped by the national governments in various counties need to be equally shared with county governments. If County A is currently utilizing a resource tapped from County B, then the latter has the right to demand part of the proceeds being generated from the asset,” he observes.
But Treasury Economic Secretary Dr. Geoffrey Mwau notes that counties cannot claim ownership of the strategic resources such as railways, airports, and harbours as it is well articulated in the constitution that they are under the custody of the national government.
Nyandemo concurs that national strategic resources such as harbours, railways, airports and lakes should be left to the national government as outlined in the constitution. TA intend to fully involve itself into finding amicable solution to the emerging issue. “This is an issue that requires serious tactic to ensure the governance structure is not interrupted. In my own opinion, there is need for sharing of earnings between the counties on one hand and counties and national agencies on the other in order to propel high growth,” notes Kinuthia.
Jamii Bora Bank Limited (JBBL), a fast growing SME focused bank, has received a Sh600 million equity [ ... ]
The Capital Markets Authority (CMA) has received recognition for being the Most Innovative Capital M [ ... ]
Kenya is facing serious unemployment and underemployment challenges. According to the 2017 Human Dev [ ... ]
One of the biggest mistakes we business people make is executing the plan/do model. We plan, and the [ ... ]