Five counties record drop in local revenue collection

Five counties collected less revenue from own sources in the first nine months of this financial year than a similar period last, a new study has revealed.

Homa Bay, Wajir, Machakos, Kisumu and Samburu registered negative own source growth in revenue growth for the first nine months of 2018/19, compared to a similar period in 2017/18 financial year.

Coming against the backdrop of a protracted stalemate between the National Assembly and Senate where the latter demanded Sh335 billion as opposed to the Sh314 billion offered, it goes to show increasing appetite for funding, despite being unable to increase own cash.

The stalemate ended with the Senate accepting a negotiated offer of Sh316 billion allocation to the counties. In total, county governments raised Sh28.92 billion in the first nine months of 2017/18 compared to Sh22.32 billion raised a similar period in 2018/19.

The findings are contained in a survey conducted by Consortium of Researchers on Governance, a professional public policy and governance researchers association.

The self-funded research study between July 5 and September 9,  was aimed at assessing County Own Source Revenue performance and devolved units’ accountability in management of public finance. 

During the period under review, the survey revealed that Homa Bay registered the biggest dip in own revenue source generation from Sh72 million to Sh58 million, a 19.1 per cent decline.

Wajir’s registered the second highest decline at 16.9 per cent followed by Machakos (16.7 per cent), Kisumu (five per cent) and Samburu (three per cent).

Wajir collected Sh45 million down from Sh55 million the previous financial year, Machakos collected Sh527 million down from 633 million, Kisumu collected 553 million down from 582 while Samburu collected Sh190 million down from Sh196 million the previous financial year.

CoRG team leader, Charles McOlonde said poor performance in both Samburu and Homa Bay was a result of a leadership vacuum.

Losing revenue

“These counties have so much revenue non-reporting since no one is fully in charge. There’s no major thing that has changed in Homa Bay or Samburu.

You can’t explain why they are losing revenue unless they are collecting but not reporting,” he said.

Samburu Governor Moses Lenolkulal was in July barred by the High Court from accessing office until a graft case lodged against him was determined while Homa Bay Governor Cyprian Awiti has been sickly.

Kisumu’s revenue from own sources also declined by Sh29 million while Machakos’ reduced by Sh105 million.

McOlonde, attributed Kisumu’s dip in revenue earnings to the ongoing port upgrade, saying it displaced many small traders from whom the county depends on for levies and licences. “They may look small but they are many, the figure is substantial,” he said.

McOlonde attributed Machakos’ decline in revenue collection to county administration focusing on development geared towards improving lives of residents as opposed to increasing revenue generation.

“Most of the projects Governor Mutua (Alfred) did last term were geared towards improving the standard of life but did not really improve revenue generation. From 2016 to 2019 revenue collections in Machakos have been declining,” he added.

Speaking to Business Hub, University of Nairobi Economics lecturer Samuel Nyandemo, however, attributed the dip in revenue collection to pilferage.

“Revenue collection has declined because of stealing. How come the former county councils were collecting more revenue than some of the current county governments yet the economy was not as vibrant as it is today?” he asked.

“Most of the governors have put their right hand men in charge of collecting taxes. We must develop a centralised system of assisting the counties in collecting taxes. We need to resort to cashless transactions,” he added.