• April 14, 2024
  • Last Update April 14, 2024 9:48 PM
  • Nairobi

Billow Kerrow’s stand on CRA revenue allocation misleading

Billow Kerrow’s stand on CRA revenue allocation misleading

There has been divided opinion on the formula that the Commission on Revenue Allocation (CRA) should use to share out Sh316.5 billion allocated to counties. Indeed various leaders are sharply divided on the matter, which has been pending for weeks in the Senate.

Former Mandera senator Billow Kerrow is one of the leaders who have voiced their arguments on the matter has stood out. In a recent an article he circulated through the social media and published on this platform, he went to great lengths to state why the CRAformula should not be changed. On the surface, his argument seems reasonable but on further examination, it becomes apparent that what Kerrow has achieved in the article is nothing short of a clever sleight of hand—he only published those facts that favour his predetermined argument and carefully concealed any inconvenient facts that do not support his argument.

The bulk of his argument can be summarized as follows: higher GDP does not necessarily correspond to higher tax generation. What the former senator conveniently forgot to add is that Kiambu county, which is always cited in this CRA argument to represent Mt. Kenya counties, was one of the top five with the highest Own-Source Revenue (OSR) collection. Others were Nairobi, Mombasa, Narok, and Nakuru, followed by Machakos and Kajiado.

Sen. Kerrow also forgot to point out that most counties’ revenues are aligned to their Gross County Product (GCP), which is a measure of how much each county contributes to the country’s GDP. Kerrow’s article is clearly a clever sleight of hand because of how he skilfully attempts to downplay the importance of GCP while in truth, a higher GCP generally indicates a higher economic activity and essentially translates to higher tax revenues.

It’s, however, worth nothing that Mr Kerrow does not dispute that Mount Kenya counties have a higher GDP than some counties with much lower, but which receive significantly higher allocation. Based on the 2019 census data, Kiambu is the second most populous county in Kenya after Nairobi, with a population of up to 2.4 million people and 795,241 households. In contrast, Marsabit County, for instance, despite being bigger in terms of geographical size, has a population size of less than a million—it has 447,150 people, and 77,459 households. It stands to reason therefore that Kiambu County requires an allocation that can adequately cater to its large population. To put it into perspective, Marsabit has what is basically only a fifth of Kiambu’s population. Consider this and the math changes.

From the above case, it is safe to conclude that the current deadlock at the Senate over the allocation formula is politically instigated. 

A debate on rightful allocation of resources must primarily factor in the size of population. The key democratic principle on trial here is population size and the need for equitable resource allocation. Development is supposed to be people-centred—It is people who vote and submit to pay taxes, not trees and landmass. When revenue allocation is unjust, it is people who suffer.

While more counties stand to win from new proposed formula, the issue has been overly politicized fueled by 2022 agenda

Let me illustrate using a story. Take a boy, we call him Kamau, from Kiambu who grows up to be a good-for-nothing drunk, not because he was not academically bright, or that he did not have potential, but because his county did not have adequate resource allocation to afford enough bursary for him and other children in his populous county. Meanwhile, a boy from a county that has few people but a large allocation will have easier access to bursary funds. Kamau will not go to school and will therefore not attain his full potential. Multiply Kamau several times and the result is that Kiambu will not just stagnate economically today, but it will regress in the long-term and might even eventually become the marginalized county with an overwhelming level of poverty. Does that sound like equity?

The discussion on changing the revenue allocation formula has been over-politicised to the point that people are no longer open to reason but instead latch on blindly to the positions held by their political bigwigs, irrespective of whether the formula benefits them or not. All this, like many other things that are wrong in this country, is incited by 2022 election politics.

Granted, resource allocation is always a matter fraught with division, considering livelihoods are at stake. For that reason, politicisation is inevitable, since there is nothing more emotional than a fight for resources. And when politics of succession become involved, as different leaders try to place their bets on the basis of 2022 mathematics, the issue inevitably gets completely muddled.

It is strange how the CRA debate has turned into a Mount Kenya issue yet, in reality, over half of the counties in this country stand to gain from the proposed new formula. If the CRA formula is changed, 29 out of the 47 counties will be winners. And out of the 29, only one of the top four can be called a Mt. Kenya county. The top four winners will be Nandi, Uasin-Gishu, Nakuru, and Kakamega counties. Two of four are from the Deputy President William Ruto’s backyard, which makes his opposition or at best ambivalence to the formula even more baffling. It provides proof that this debate is no longer about equitable allocation of resources, but has morphed into a political debate, with 2022 politics driving the agenda rather than logic and fairness.

The CRA recommendations were not arrived at haphazardly or with any intent to disadvantage some areas. The recommendations were arrived at based on best practice and were subjected to wide stakeholder consultation and expert/peer review. The new revenue-sharing formula is being proposed to be in use for a period of five years, which makes it hardly permanent. The politicization of the matter is therefore unfortunate.

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