The Commission on Revenue Allocation (CRA) is seeking the establishment of a special account where appropriated monies of the equalization funds will be deposited before being distributed to respective county governments.
The Commission today submitted its views on the Equalization Fund Appropriation Bill, 2023, to the Senate Committee on Finance and Budget.
CRA Calls for Specific Account to Hold Funds
CRA Vice Chairperson Koitamet Olekina noted that the Bill needed to specify where the funds would be deposited as there was no indication as to where the amounts would be paid.
“There is need to amend the clause by inserting 34 Special Purpose Funds established in CBK will be opened by the Board where the appropriated funds will be deposited. Once matrix is approved, the money will be sent to the various bank accounts for each of the counties established by PFM Equalization Regulations,” said Olekina.
The Bill was first brought before the Senate on March 7, after which the Standing Committee on Finance and Budget invited key stakeholders to submit their views on it.
The Bill seeks to authorize the issue of Ksh 13.8 Billion from the Equalization Fund to finance development projects in 34 constituencies.
Equalization Fund Appropriation to date
The Equalization Fund was established under the 2010 Constitution and required that 0.5% of the National Government’s revenue be paid into the Fund.
The Government shall use the Fund to provide basic services only, including water, roads, electricity and health facilities to marginalized areas, equal to how the rest of the nation receives the services.
The Fund can only be used through an Appropriation Bill enacted by Parliament. If the monies in the fund are unspent in a particular year, they shall remain the Fund for use per the constitution during subsequent years.
The Fund had no allocation in 2011-2014, and by then, the CRA had not yet developed the First Policy identifying marginalized areas.
In 2017, Ksh. 12,400,000,000 was appropriated through the Equalization Fund Appropriation Act 2017 and was administered through guidelines published through a Gazette Notice.
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