Third Eye

Counties own revenue key to success of devolution

Thursday, January 13th, 2022 11:00 | By

Devolution has been hailed as the most transformative aspect of the 2010 Constitution.

Although it has empowered many regions that had lagged behind, almost all counties have performed dismally in Own Source Revenue (OSR) generation.

This is in spite of the potential they have of collecting billions of shillings to support their budgets and fund their operations.

OSR is touted as one of the biggest problems that face county governments today.

Administrative inefficiency, gaps in policy, weak laws and collusion between unscrupulous county officers and cash collection firms and leakages have conspired to deny counties the much-needed kitty that would offer relief for myriad financial challenges.

County governments have performed poorly in generating own-source revenue for the past six years, according to a report by the Institute of Certified Public Accountants of Kenya (ICPAK).

No county, according to ICPAK, met its own revenue targets in the first nine months of the financial year 2019/20.

Low revenue collection, cited the accountant’s body, was caused by ineffective revenue monitoring and control systems, lack of updated revenue databases, lack of enumeration and classification of revenue source and low capacity support in the revenue function.

Inadequate political goodwill from the two arms of the county government – the Executive and county assemblies – is also a major impediment in revenue collection.

The other reason for poor performance is that with a considerable high amount of national shared revenues, most counties do not pay attention to ensuring that their own revenues are collected efficiently and effectively.

In essence, the revenue collectors rarely got the facilitation, motivation, and supervision.

The aspirations of Kenyans lie largely on devolved units. The responsibilities of counties are well laid down in the Constitution and go beyond the provision of basic services.

They also have the role of engineering the prosperity of citizens. Some counties have a few examples to emulate.

Own revenue is critical because, firstly, the revenue can be used to augment ongoing development projects and service provision in the counties.

Secondly, own revenue can be crucial in county borrowing or contracting of debt.

Also, there is a need to devise ways to ensure that county governments use the largest shares of their revenue on development, not on salaries and perks.

According to the Controller of Budget’s report, recurrent expenditures are 77.4 per cent, on personnel emoluments, while 22.6 per cent on operations and maintenance expenditure.

If fully and properly implemented, devolution would help the government secure its dream of fostering the equitable distribution of resources. — The writer is a Public Policy Analyst —[email protected]

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