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September 24, 2018

City revenue collection declining

Former vice president Kalonzo Musyoka , Nairobi governor Mike Sonko ,politician Wavinya Ndeti , chief officer medical services Nairobi county Mahat Jimale tours one of the tents during the final medical camp in Kathiani Primary school Machakos county on September 8th2018 in honour of  Sonko’s late father Mzee Kivanguli. Governor Sonko welcomed the move by the MCAs to back his leadership and stated that he has done his best to fulfil demands of the Ward representatives/GPS
Former vice president Kalonzo Musyoka , Nairobi governor Mike Sonko ,politician Wavinya Ndeti , chief officer medical services Nairobi county Mahat Jimale tours one of the tents during the final medical camp in Kathiani Primary school Machakos county on September 8th2018 in honour of Sonko’s late father Mzee Kivanguli. Governor Sonko welcomed the move by the MCAs to back his leadership and stated that he has done his best to fulfil demands of the Ward representatives/GPS

Nairobi county’s revenue collection has been declining drastically since Governor Mike Sonko took office in August 2017.

According to the county’s revenue collection performance for 2017-18, collection stands at Sh10.1 billion, a decrease compared to Sh11.3 billion for the 2016-17 financial year.

The report, currently with the assembly’s budget office, reveals that in 2017-18, the county’s five major internal revenue streams failed to meet their targets and have all decreased, compared to 2016-17.

In 2017-18, parking fees stood at Sh1.88 billion, followed by rates at Sh1.87 billion, single business permits (SBP) at Sh1.7 billion, billboards and adverts at Sh698.05 million, and building permits at Sh49 .41 million.

During Governor Evans Kidero’s regime in 2016-17, parking fees were at Sh1.98 billion, rates Sh2.26 billion, SBP at Sh1.7 billion, billboards and adverts at Sh720 million, and building permits at Sh1.28 billion.

City Hall is set to lower the daily downtown parking fees from Sh300 to Sh200 in attempt to increase revenue collection.

In 2013, Kidero increased parking fees from Sh140 to Sh300 but during election campaigns last year, Sonko pledged to reinstate it to Sh140, which has not happened.

According to the 2018-19 County Fiscal Strategy Paper (CFSP) released early this year, Nairobi has not hit its revenue target since 2013 by between 20 and 25 per cent.

For the last four financial years, billboards and advertising has been the best performing revenue stream as per set targets, while building permits have been relatively poor.

Land rates have been persistently the largest revenue stream, generating Sh10.27 billion over the last four financial years.

Poor collection mechanisms, poor rates records and inadequate enforcement are some of the challenges the land rates sector faces.

High default rate on payments, weak enforcement mechanisms and slow pace of devolution of the SBP have been blamed for its poor performance.

The SBPs are issued for enterprises under The City of Nairobi (Licensing of Premise and Traders By-Laws 2007 ) that wish to operate within the limits of Nairobi city.

During pronouncement of the county budget in June, former acting Finance Executive Charles Kerich and Budget Committee chairman Robert Mbatia said the prolonged electioneering period and post-election protests in the capital affected the county’s revenue collection for 2017-18.

“We had like a whole seven months of campaigns and protests last year. During this time, people were not paying and there was no enforcement at all,” Kerich said.

In the just-ended financial year when Sonko came to office, the revenue collection rose from Sh200 million to Sh458.12 million in the first two weeks of September 2017.

He attributed the increase to automation of 134 billing services and sealing of corruption loopholes.“We have sealed all corruption loopholes. All unscrupulous traders and rogue county staff who think they will survive on corruption have been put on notice,” said Sonko.

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