Alarm after political parties miss Sh4 billion state cash

A new audit has raised concerns over political parties being deprived of funds guaranteed by the constitution, with Auditor General Nancy Gathungu warning that the shortfall undermines democracy.

The report says parties received only Sh808 million in the financial year ending June 2024, far below the legally mandated allocation.

"The amount was not in compliance with the law on funding political parties," Gathungu stated in the report seen by the Star.

While the Office of the Registrar of Political Parties recorded a disbursement of Sh1.48 billion–including administrative costs, this still fell drastically short of the Sh4.8 billion owed.

“The underfunding may have negatively affected the planned activities of the eligible political parties that were to receive funding,” the auditor general said, giving an unqualified opinion on the accounts of the parties’ fund.

The amount is calculated as 0.3 per cent of the Sh1.57 trillion national shareable revenues spelt in the Division of Revenue Act of 2024.

The ruling United Democratic Alliance received the largest share at Sh588 million, followed by ODM (Sh453 million), Wiper (Sh87 million) and Jubilee (Sh63 million.

Amani National Congress got Sh42 million, Ford Kenya (Sh38 million), and DAP-K (Sh25 million), while small parties shared the remainder (Sh185 million). 

The underfunding has crippled parties' operations, limiting their ability to open branch offices and engage constituents.

During the year under review, it emerged that a significant number of parties lacked offices in more than half of the counties as required by law.

 Only ODM met the legal requirement of maintaining offices in more than half of the counties, with most parties blaming financial constraints for non-compliance.

"Political parties attributed the failure to insufficient funding, citing challenges in affording rent and staff salaries," the audit noted, adding that the outfits have been in breach of the law.

“The non-compliance raises concerns regarding parties’ ability to effectively operate and engage with constituents across the country,” the auditor general said.

To access the funds, parties must have at least elected MPs and governors, submit audited accounts, and comply with the two-thirds gender rule in leadership.

Had the full Sh4.8 billion been disbursed, UDA would have received Sh1.9 billion, ODM Sh1.46 billion, Wiper Sh283 million, and Jubilee Sh206 million.

Smaller parties collectively would have accessed Sh595 million.

The funding gap stems from a longstanding dispute over the 0.3 per cent allocation formula, which the National Treasury has contested as unconstitutional.

In 2021, the Treasury sought parliamentary amendments to replace the fixed percentage with discretionary allocations.

Treasury petitioned the Justice and Legal Affairs Committee to amend the law to give it a free hand to determine the amount allocated to political parties.

It argued then that the priority expenditures like health, education and debt servicing take precedence.

The National Treasury asked political parties to come up with a framework for the outfits to be funded adequately.

The exchequer proposed that the allocation to political parties should not be based on a percentage of revenue collected.

It held that the current setting compromised what was prioritised during resource allocation.

“The 0.3 per cent spelt in the Political Parties Act, of 2011 (Revised in 2022) is not one of the basis of sharing revenues as provided for in Articles 203 and 204 of the constitution,” Treasury said then.

However, MPs instead expanded eligibility to include minor parties when the parties’ law was amended in December 2022.

ODM’s 2019 court victory securing Sh4.1 billion in arrears has been cited as highlighting the systemic underfunding.

The amounts were arrears that had accrued between 2011 and 2016 and were on the basis that the ORPP did not apply the formula set in the law.

At that time, the party claimed it had only received Sh100 million as opposed to the full amount set in the law establishing the political parties fund.

Some schools of thought argue that 0.3 per cent should apply after national-county revenue sharing.

Treasury maintains that rigid allocations disrupt fiscal planning, leaving parties struggling to make ends meet and function optimally.

For Treasury, national and county share, mandatory services such as health, education, security, national interests, NG-CDF and equalisation fund are prioritised.

It argued that the constitution sets other priority spending to include public debt, pension and salaries for constitutional office holders. 

 INSTANT ANALYSIS

Political parties are hailed as the backbone of the country’s democracy, yet systemic underfunding and tax enforcement of the set thresholds threaten their viability. At least 95 per cent of the parties fund proceeds are shared among qualified political parties, 50 per cent of which is shared proportional to seats won in the National Assembly and Senate. Another 50 per cent is based on the votes the parties received in the presidential election.