@JoanAchie @KithureKindiki @WanjeriNderu #MaskaniConversations AMENDMENT OF ARTICLE 204 OF THE CONSTITUTION ON MECHANISMS FOR DISBURSEMENT OF EQULIZATIONFUND WILL REQUIRE A REFERENDUM.On Tuesday 19th August 2014, the National Assembly passed by a two thirds majority the first proposedamendment to the Constitution. From the bi-partisan mood in the House in favour of the amendment, it isclear that unless stopped by the Senate or a referendum, The Constitution of Kenya Amendment Act.(No.2) of 2013 will be the first amendment to our new Constitution. This Bill seeks to amend Article 204 ofthe Constitution by removing the disbursement of the Equalization Fund from the purview of the nationalgovernment and transferring it a to constituency based process.CIC is required to ensure that the letter and spirit of the Constitution is respected, protect the sovereigntyof the people, and ensure that all State organs observe the national values and principles and, to promoteconstitutionalism and the rule of law. Recognizing that the people have a right to participate in thatregard, CIC would like to issue the following opinion on the constitutional process for amending Article 204of the Constitution.The SubstanceThe intention of Article 204 of the Constitution was to ensure that the quality of basic services inmarginalized areas is brought to the level generally enjoyed by the rest of the Country. Article 204 (3)(b)envisages two possible kinds of projects that can be implemented within the Equalization Fund framework.The projects that address marginalization that may cross county boundaries are implementable directly bythe national government or by the National Government working with a cluster of counties in an intercounty framework as contemplated in Article 189(2) of the Constitution. Projects that fall within countyboundaries can be implemented through conditional grants to the respective counties. That, in, our view,was the reason why Article 204 3(b) of the Constitution allowed the National Government to use theEqualization Fund either directly or through conditional grants to County governments.The amendment before the Assembly proposes the deletion of Article 204(3)(b) and replaces it with a newprovision that requires funds to be remitted to constituencies. The effect of the amendment will be toconfine the use of the Equalisation Fund to constituency based projects and take away the responsibility ofthe National Executive to ensure adequate and effective utilization of the Equalization Fund. Splittingpotentially large projects to be implemented within a constituency does not accord with the economies ofscale nor does it facilitate the carrying out of the noble intentions of Article 204.If the amendment is adopted, the Equalization Fund will be disbursed and used within constituencyboundaries as opposed to national or county projects envisioned in the Constitution. The Constitution veststhe executive functions in the national government and county governments. Indeed, Article 186 of theConstitution and the Fourth Schedule clearly delineate powers and functions for each level of government.Disbursement of the Equalization Fund along constituency lines, established under Article 89 as electoralunits, would be introducing a spending framework for which there is no administrative system to dischargeexecutive functions reserved for the national government or county governments.It is clear from the proposed amendment and from the debate in the Assembly that accopmanied itspassage that the Equalization Fund will also be administered through the CDF framework or through asimilar Fund established by parliament. As a Commission we have already addressed ourselves to theunconstitutionality of CDF and should the same be replicated to the Equalization Fund, it will offend theseparation of powers and violate the Constitution.We are also concerned that this amendment is being proposed even before the effectiveness of the currentprovision has been tested. To date, the equalization fund has not been utilized as the necessary regulationsto enable its implementation have not come into force. While it is unfortunate and may even be deemedillegal that the fund has not been implemented, it beats reason that even before provisions of theConstitution have been implemented, amendments are being effected!Finally, the proposed amendment to Article 204 of the Constitution offends several constitutional principlesincluding: the objects of devolution in Article 185 of the Constitution and the principles of public finance inArticle 201 of the Constitution.The ProcessArticle 256 of the Constitution requires that a Bill to amend the Constitution must be passed by both Housesof parliament. Having passed the second reading in the National Assembly, the Bill is still subject toconsideration and adoption by not less than two thirds of the members of the National Assembly at thethird reading. Thereafter, the Bill will be passed on to the Senate where it must also be adopted by not lessthat 2/3 of the members of the senate in the second and third reading.CIC urges the Senate to protect the interests of counties by rejecting the proposed amendment to Article204 of the Constitution.Should the Constitutional amendment Bill successfully sail through the two houses of Parliaments, then, it isour opinion that by creating a new financing and expenditure framework impacting devolved funds, theamendments will affect the principles of devolution and interfere with the financing structures ofdevolution. In accordance with Article 255(1)(i) of the Constitution, any amendment of the Constitutionrelating to the objects, principles and structures of devolution must be subjected to a referendum. Thequestion here is, should the Country be subjected to a referendum just so that Parliament can bepermitted access to the Equalization Fund? Is this prudent use of resources? The answer is NO.Consequently, if both houses of Parliament pass the Bill to amend Article 204 of the Constitution, we willinevitably have a referendum on this question within 90 days of the passage of the Bill by the Senate. Areferendum is a costly exercise. We should be wary of using scarce public resources in a referendum toadopt amendments that are an affront to various constitutional principles, including principles of goodgovernance adopted by the people of Kenya in 2010.Finally we must express our concern that for the second time ,Parliament is seeking to use its constitutionalpowers to pursue amendments to the Constitution in which it will accrue benefits. In our view, this conflictswith the requirement in Chapter 6, that in exercise of any power, State Officers must not seek personalbenefit at the expense of the public interest.While we acknowledge that amendment of the Constitution is a right, it is a right that must be exercisedwith caution, prudence and responsibility.
Posted on: Sun, 24 Aug 2014 06:25:59 +0000