July 18, 2017

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Nairobi, 12th July 2017: Article 204 provides for the establishment of Equalization Fund, into which, one half per cent of all the revenue collected by the national government each year is paid. The purpose of the Fund is to bring the quality of basic services including water, roads, health facilities and electricity in marginalised areas to levels generally enjoyed by the rest of the nation, so far as possible.

Article 216 (4), mandates the Commission to determine, publish and regularly review a policy in which, it sets out the criteria for identifying marginalized areas for purposes of Article 204 (2). The Commission published the first policy in February, 2013 that identified 14 marginalised counties, namely: Turkana, Mandera, Wajir, Marsabit, Samburu, West Pokot, Tana River, Narok, Kwale, Garissa, Kilifi, Taita Taveta, Isiolo, Lamu.

To implement the Policy, the Equalization Fund Advisory Board was established in March 13th 2015. The Board consists of the Principal Secretary  for Finance who is the Chairman and Principal Secretaries in charge of Devolution and Planning, water, roads, health, energy, national coordination and other members of either gender appointed by the Cabinet Secretary from outside the public service.

Since the onset of devolution, the Equalisation Fund has accumulated a total of Ksh. 28 billion. In December 2016, the Advisory Board identified projects in the 14 marginalised counties through a participatory process and allocated Ksh12.4 billion for various projects in the 14 marginalised counties in financial year 2016/17. The Advisory Board has provided for another Ksh. 7.7 billion  for 2017/18.

The Commission has embarked on review of the first policy and preparation of the second policy identifying marginalised areas for purposes of sharing revenues from the Equalisation Fund from financial year 2018/19 for a further period of five years. Unlike the first policy which only identified marginalised counties, the second policy will identify marginalised areas within various counties. This departure is informed by the fact that there are pockets of marginalised areas even within the highly developed counties.

As a first step into the review process, the Commission carried out inception visits to 16 counties: the 14 counties identified as marginalised and two other counties viz Baringo and Kitui between 15th – 26th May, 2017. Out of the consultative forums, a number of challenges have emerged that needs to be addressed by the second policy. These are:

  • Inadequate public participation in the identification of projects
  • Duplication due to parallel programs/initiatives by various stakeholders
  • Targeting of projects financed from the Fund
  • Definition of a marginalised area
  • Clarity on what it means to be marginalised and
  • Oversight on use of revenues from the Fund

To address some of these challenges, the Commission has organised this consultative forum today which brings together professionals, practitioners, academia, experts and civil society to deliberate on various matters to include conceptualization, historical and political economy perspectives, and remedial measures of addressing marginalisation. Besides, the Commission will also launch a web based questionnaire (survey monkey) to enable Kenyans to provide their views into the preparation of the second policy. The Commission will also undertake field visits to all 47 counties in the month of September 2017 to ensure that marginalised areas are properly defined and requisite projects identified to ensure that the funds once allocated, the beneficiaries are well targeted.

Stakeholders are invited to share their views by completing an online survey that will be accessible at Written memoranda can be also be submitted to CRA at the offices on 14 Riverside. Comments can also be posted on CRA twitter page @crakenya, #devolutiondata and Facebook page Commission on Revenue Allocation.

Dr. Jane Kiringai



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