Governors have raised alarm over the National Assembly’s decision to exclude County Governments from monies collected through the Road Maintenance Levy Fund (RLMF). Speaking during the 21^st Ordinary session of the Intergovernmental Budget and Economic Council (IBEC) chaired by the Deputy President H.E Rigathi Gachagua on 6^th October 2023, Council of Governors (CoG) Chair H.E Anne Waiguru termed the move unconstitutional and a serious threat to devolution.

“County Governments had previously been allocated 15% of the Roads Maintenance Levy Fund between FY 15/16 to FY 20/21. However, the 9^th National and County Government Coordinating Summit held on 11^th February 2023 in Naivasha and chaired by President William Ruto resolved to have the Roads Maintenance Levy Fund Conditional Grant reinstated to County Governments from FY 2024/2025 with an allocation of 20%,” noted Governor Waiguru.

“The Council has resolved to convene a consultative forum bringing together the Council of Governors, the Ministry of Roads, various roads agencies, CRA and relevant stakeholders to seek an out of Court settlement that ensures the equitable distribution of funds from the RLMF between the two levels of government,” said the DP Rigathi Gachagua while addressing members of the press after the IBEC meeting in Karen.

This came even as the Governors’ Council called for a repeal of the amendments to the Public Finance Management Act, 2012 Sections 191 A – 191 E, which obligates the National Treasury to enter into intergovernmental agreements with respective County Governments before the transfer of conditional allocations.

“Counties can’t access funds in the excess of Ksh.53 billion to implement our budgets and complete ongoing development projects for FY 2023/24 including the Kenya Climate Smart Agriculture Project (KCSAP) and the National Agricultural and Rural Inclusive Growth Project (NARIGP) that are due for closure,” added the CoG Chair noting that no intergovernmental agreements are currently in place and there are existing legislative frameworks to facilitate the effective transfer of the funds.

The IBEC Council directed that Parliament waive the current requirements under the law. In the meantime, a task force had been established to develop draft intergovernmental agreements. On disbursement of Counties’ equitable share, the exchequer has so far released Ksh.78.59 billion with Ksh.48.60 billion outstanding for the months of September and October 2023 allocations.

Regarding the agriculture sector, the Deputy President noted that plans to hold stakeholder conferences in the sugar, milk and maize sectors were in the pipeline further urging governors to support the Kenya Kwanza government’s sugar sector reforms. This includes privatization of public sugar mills; reducing sugar imports; sugar cane development; regulatory changes to streamline the sugar industry; debt management; quality control and adherence to industry standards; Public-Private Partnerships (PPPs) and; diversification.

The IBEC meeting came just days after the government partially lifted the 2019 mining moratorium on licenses in a bid to accelerate growth in the sector and ensure that the royalties can be realized by the respective communities. Citing the 4^th schedule of the Constitution which assigns County Governments’ the function to organize, register and develop communities, Governors called upon the National Government to refrain from taking over responsibilities that are designated for County Governments with regard to the registration of Community Organizations.

Other critical issues discussed during the Karen meeting include: the draft mineral royalty sharing regulations, 2023; designation of national public water works through revocation of Legal Notice No. 102; transfer of Water Assets to the County Governments, Joint Authorities or Water Service Providers (WSPs) to enable them adequately undertake water service provision; County Governments’ pending bills and enhancement of own source revenue; the Integrated County Revenue Management System; the Equalization fund and; County Governments’ preparedness for El Nino.