16 counties still collect dismal revenue, says Nyakang'o

At least 16 counties are still doing poorly in generating own revenue despite their huge potential, the Controller of Budget has revealed.

In her June 2021 to July 2022 report, Margret Nyakang'o says the counties failed to raise even 60 per cent of the total allocation from the national government.

The counties include Busia (30 per cent), Murang’a (32.9 per cent), Kajiado (33.1 per cent), Garissa (43.7 per cent), Embu (43.8 per cent), Kitui (45.2 per cent), Nairobi (47.1 per cent), Nyandarua (47.8 per cent), and Bungoma (49.3 per cent).

Others are Kisumu (49.5 per cent), Wajir (52.4 per cent), Meru (55.9 per cent), Nyamira (56.4 per cent), Narok (56.7 per cent), Kisii (57.8 per cent) and Marsabit (58.6 per cent).

During the reporting period, the report says, county governments generated a total of Sh35.91 billion from their own source revenue, which was 59.4 per cent of the annual target of Sh60.42 billion.

This was an improvement compared to Sh34.44 billion generated in the previous 2020-21 financial year.

A report by the Commission on Revenue Allocation early in the year revealed that all counties raised less than 40 per cent of their estimated revenue potential, except those counties with game reserves.

Nairobi was singled out for raising a paltry Sh10.7 billion despite a potential of generating Sh77 billion.

National Treasury in 2018 projected counties have the potential of collecting up to Sh178 billion every year.

In the current controller of budgets report, only four counties achieved their set annual target.

They include Turkana at 113.5 per cent, Migori (110.5 per cent), Lamu (105.5 per cent) and Vihiga at 101.6 per cent.

Conversely, eight counties recorded below 50 per cent performance, namely Busia, Murang’a, Garissa, Kajiado, Embu, Kitui, Nairobi, Nyandarua, and Bungoma.

As a solution, the controller of budget said it recommends that the counties with “below 50 per cent performance of OSR in the period under review should build capacity for revenue enhancement and management in the coming financial year.”

The total funds available to the county governments in the ended financial year amounted to Sh436.46 billion, the report said.

This amount consisted of Sh340.4 billion as an equitable share of revenue raised nationally and disbursed by the National Treasury.

Also, Sh12.01 billion as conditional grants, Sh48.14 billion actual reconciled cash balance from financial year 2020-21 and Sh35.91 billion raised from own sources.

“Overall, the Sh35.91 billion received by county governments from their own sources of revenue was 59.4 per cent of the annual target,” the report said.

"This was an improvement compared to Sh34.44 billion (64.2 per cent) generated in the last fiscal year.” 

Auditor general Nancy Gathungu had said factors that hinder counties from effectively generating their revenues include lack of automation, weak forecasting, weak internal controls and inadequate mapping.

Other challenges are misappropriation, leakages, outright theft and spending revenue at the source.

(Edited by Bilha Makokha)