Counties miss targets as they raise Sh34b in own revenue targets
Business
By
Nicole Njuguna
| Jul 10, 2024
Counties raised Sh34.4 billion from their own sources in the 2020/21 financial year against a target of Sh54.3 billion, according to the latest Office of the Controller of Budget (OCOB), Annual Budget Implementation Report.
While this was a 65 per cent increase in revenue generation compared to the previous financial year, the report notes, there is room for substantial improvement.
A June 2022 analysis from the National Treasury in collaboration with the World Bank to the Commission on Revenue Allocation (CRA) points to a total annual revenue potential of around Sh93 billion across the 47 devolved units.
Over the financial years 2017-18, 2019-19, and 2019-20, the counties raised Sh38 billion annually, a Sh55 billion shortfall from the projected revenue potential.
READ MORE
Kenya shines at Zone Individual Chess Championship in Ethiopia
Police-linked brutality victims in court, claim opaque compensation process
Safe but scared...: Tales of Mathare floods survivors
Inside huge cash withdrawals from affordable housing kitty
Prof Mutua should face MPs for grilling on victims payouts
Government should address issues raised by young people without resorting to intimidation
Subaru driver in a dramatic high-speed chase after alleged hit-and-run in Nairobi
Bottled water exempted from excise duty
According to OCOB data, Narok, Tana River, Laikipia and Samburu counties were the best performing in own source revenue generation, owing to their games reserves and their expansive size.
Nairobi County collected an average of Sh9.5 billion over the three financial years, against a potential of about Sh25 billion, considering the size of its economy.
Kiambu, Nakuru and Mombasa counties followed closely, generating Sh5.2 billion, Sh4.5 billion and Sh4.4 billion annually respectively.
Meru, with a potential of collecting Sh3.2 billion annually, only collects 20 per cent of this amount.
To increase revenue collection, the study suggests a clear and simple framework for defining own source revenue and reporting on actual collections to avoid discrepancies between the elements grouped under different cross-county categories.
It also calls for the collaboration of CRA and county governments as well as a multi-sectoral approach from the key stakeholders in adopting a consistent own source revenue reporting and monitoring mechanism.
"This will not only lead to enhancing the current practices, arriving at a harmonised reporting system but also empower counties to comprehend their potential and identify improvement areas," says the report.
"Investments driven towards improving the existing County revenue management system and the infrastructure that collects and analyses data on revenue collection is vital in enhancing the performance OSR generation across counties."
Common currency by 2031? EAC revives single currency push as central banks turn to gold
East African central bank governors have renewed efforts to launch a single regional currency by 2031 while strengthening economic resilience through reserve diversification.Ruto's fresh headache: Houthi Red Sea blockade sends fuel import costs soaring
Rising Middle East tensions and Houthi threats to Red Sea shipping routes have pushed up global oil prices, creating fresh pressure on President William Ruto’s government.Why Kenya's digital infrastructure is failing to deliver stronger economic growth
A new report says Kenya must complement investment in digital infrastructure with stronger digital platforms, skills and institutions.KMA explains delay in salvaging grounded ship off Nyali beach
The Kenya Maritime Authority has explained why it has taken so long for a ship that ran aground off Nyali beach in Mombasa to be salvaged amid fears it might cause oil pollution or be vandalised.Scrap metal dealers decry police harassment, ask for intervention
Scrap metal dealers in Kenya have accused police of harassment, arbitrary arrests and unlawful seizures, calling for government intervention to protect legitimate businesses.MOST READ
Common currency by 2031? EAC revives single currency push as central banks turn to gold
FINANCIAL STANDARD
By Brian Ngugi
- Ruto's fresh headache: Houthi Red Sea blockade sends fuel import costs soaring
FINANCIAL STANDARD
By Brian Ngugi
- Why Kenya's digital infrastructure is failing to deliver stronger economic growth
FINANCIAL STANDARD
- KMA explains delay in salvaging grounded ship off Nyali beach
SHIPPING & LOGISTICS
By Patrick Beja