- The CoB recommends counties develop and implement alternative measures to ensure the budget is fully financed.
- Article 209 (3) of the Constitution allows counties to generate their own revenues to supplement allocations by the National government.
Image: FILE
Several programmes and activities in counties could have stalled as the devolved units failed to hit their revenue collection targets, a new report shows.
According to the latest report by the Controller of Budget, only three of the 47 counties met their revenue targets.
The budget implementation review for the 47 counties for the first nine months of 2020-21 reveals that they generated Sh25 billion out of the annual target of Sh56.02 billion.
This represented 45.6 per cent of the annual target and was a decrease compared to Sh28.04 billion generated in a similar period of the financial year 2019-2020.
“The performance was below the expected prorated target of 75 per cent in the first nine months of the financial year,” reads the report published by Controller of Budget Margaret Nyakang’o.
The dwindling collections, coupled with the frequent delays by the National Treasury to release exchequer, could take a heavy toll on the county programmes and projects.
“The underperformance of own-source revenue collection implies that some planned activities may not be implemented in the financial year due to lack of funds and may lead to accumulation of pending bills,” Nyakang’o warns.
The CoB recommends counties develop and implement alternative measures to ensure the budget is fully financed.
Article 209 (3) of the Constitution allows counties to generate their own revenues to supplement allocations by the national government.
They are given the mandate to impose property rates, entertainment taxes and any other tax that a county is authorised to charge by an Act of Parliament.
However, most counties have failed to meet their targets despite spending millions of shillings on the automation of the collections, forcing them to heavily rely on the National Treasury for funding.
This underperformance was partly blamed on lockdowns and the prevalent Covid-19 pandemic.
Even before the pandemic, the counties struggled to hit their targets.
The report shows that Tana River, Turkana, and Migori achieved the highest ratios at 92.6 per cent, 84.5 per cent, and 77.8 per cent respectively, closing the bracket of target achievers.
During the first nine months of 2020-21, the Tana River generated Sh67.21 million as its own source revenue.
This amount, according to CoB represented an increase of 5.9 per cent compared to Sh63.45 million realised during a similar period in 2019-20 and was 92.6 per cent of the annual target.
During the same reporting period, Turkana generated Sh126.68 million as its own source revenue.
The report states: “This amount represented an increase of 12.3 per cent compared to Sh112.79 million realised during a similar period in FY 2019/20 and was 84.5 per cent of the annual target.”
Migori generated Sh221.75 million as own-source revenue, representing a decrease of 11.5 per cent compared to Sh227.16 million realised during a similar period in 2019-20 and was 78 per cent of the annual target.
Conversely, counties that recorded the lowest proportion of own-source revenue against annual targets were Narok at 14.5 per cent, Wajir at 18 per cent, and Busia at 20.7 per cent.
During the first nine months of the financial year 2020-21, the report states that Narok which has been one of the best performers generated Sh453.29 million as own-source revenue.
According to the CoB report, the amount represented a decrease of 79.2 per cent compared to Sh2.18 billion realised during a similar period in 2019-20 and 14 per cent of the annual target.
“This is under-performance of own-source revenue at Sh453.29 million compared to an annual projection of Sh3.13 billion, representing 14.5 per cent of the annual target.
The challenges can be attributed to the global pandemic of Covid-19, which caused a significant drop in the tourism revenue stream,” the report reads in part.
Just like Narok, which almost entirely depends on tourism revenue as the main stream of own generated revenue, Samburu also suffered the same fate due to the impact of Covid-19 containment measures on the tourism sector, which is the county’s top revenue earner.
Governor Moses Lenokulal –led county generated Sh49.68 million as its own source revenue.
This amount represented a decrease of 75.8 per cent compared to Sh205.21 million realised during a similar period in 2019-20 and was 27.6 per cent of the annual target.
“The decrease in own-source revenue collection during the period under review can be attributed partly to the impact Covid-19 containment measures has had on the tourism sector, which is the county’s top revenue earner,” the report reads in part.
Wajir which is pulling the tail for the fourth year had the lowest proportion of own-source revenue at 18 per cent against annual targets followed by Busia at 20.7 per cent.
The county generated Sh26.96 million as own-source revenue.
“This amount represented a decrease of 62.5 per cent compared to Sh71.85 million realised during a similar period in FY 2019-20 and was 17.9 per cent of the annual target,” the report says.
-Edited by SKanyara