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April 2012
COMMISSION ON REVENUE ALLOCATION
INTERIM RECOMMENDATIONS ON THEMARGINALIZATION POLICY AND
CRITERIA ON THE EQUALIZATIONFUND
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Article 204 of the Constitution of Kenya2010 establishes an Equalisation Fund.
One half per cent of all the revenuecollected by the national government
each year constitutes the EqualisationFund.
INTRODUCTION
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There is established an EqualisationFund into which shall be paid one half
per cent (0.5%) of all the revenuecollected by the national governmenteach year calculated on the basis of themost recent audited accounts of revenuereceived, as approved by the NationalAssembly.
KEY FEATURES OF THE FUND
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The national government shall use theEqualisation Fund only to provide basic
services including water, roads, healthfacilities and electricity to marginalisedareas to the extent necessary to bring thequality of those services in those areas tothe level generally enjoyed by the rest ofthe nation, so far as possible.
KEY FEATURES OF THE FUND
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Any unexpended money in the EqualisationFund at the end of a particular financialyear shall remain in that Fund for use
during any subsequent financial year.
This article lapses twenty years after theeffective date.
Parliament may extend the period.
KEY FEATURES OF THE FUND
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Article 216 (4) requires the Commissionon Revenue Allocation to determine,
publish and regularly review a policy inwhich it sets out the criteria by which toidentify the marginalised areas for thepurposes of Article 204
KEY FEATURES OF THE FUND
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a. The respective CountyGovernments to be responsiblefor proposing the basic servicesto be upgraded within the county
in a given year for considerationby the Equalization FundCoordination Committee.
b. .
RECOMMENDATION 1
b. Disbursements from the Equalization Fund to be channeled
through County Governments, who will be responsible forensuring implementation of the selected. projects.
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a. Allocations from theEqualization Fund to beused for developmentexpenditures.
b. The funds set aside for thetwo financial years, 2011/12and 2012/13, should berolled over to the 2013/14financial year.
RECOMMENDATION 2
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A Coordination Committee to besteered by the CRA, and withrepresentation from all relevantministries and stakeholders will
evaluate and propose projects forfunding from the EqualizationFund.Assessment of projects willbe based on objective criteriaspecified in the Policy on
identifying marginalized Areas.
RECOMMENDATION 3
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The strategic sectors to be targeted during thefirst round of allocations in 2013/14 will be for:
a. Provision of waterb. Education
c. Health services
d. Energy ande. Rural access roads
RECOMMENDATION 4
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THANK YOU
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