Participants follow proceedings during a national conference on devolution in Nairobi. With the right fiscal and policy measures, counties can attract the right type of investment and generate self-sustaining revenue. photo | Phoebe Okall | nmg
County governments are currently focusing on revenue generation through the imposition of new fees and levies on the private sector.
This is arguably one of the most intellectually lazy means of generating income.
In some ways it can be argued that the imposition of cess, advertising fees and myriad others is actually killing the business environment and the ability of private sector to generate jobs and money.
Counties need to make an effort to make the units attractive for investment to both foreign and local investors.
The decentralisation of Kenya ushered in the county structure giving the devolved units power previously only unavailable at the top level.
Sadly what seems to be emerging is a focus by county governments on revenue generation through the imposition of new fees and levies on the private sector.
This is arguably one of the most intellectually lazy means of generating income. In some ways it can be argued that the imposition of cess, advertising fees and myriad others is actually killing the business environment and the ability of private sector to generate jobs and money.
So what short, mid and long-term measures, can counties deploy to attract the right type of investment and generate revenue?
An important immediate action is to determine the competitive advantage of counties. Within the County Integrated Development Plan (CIDPs), counties should articulate their competitive advantage and strategies aimed at capitalising on these in a manner that makes them profit and job generators.
Further, it is crucial that important county leaders are identified. These include both those who live in the county as well as those with an attachment to the county.
These leaders should be identified from all levels and include those in the private and public sectors, NGO leaders, village elders, women and youth leaders as well as leaders from the disabled community.
This county leadership should be consulted to develop an investment strategy to, among other things, identify county needs (health, education, infrastructure etc.), identify projects related to meeting these needs that are viable, identify sources of funding, develop the capacity required to raise the funds and source the skilled individuals needed to manage and implement the county projects.
In the mid-term, counties need to make an effort to make the units attractive for investment to both foreign and local investors.
This includes reducing administrative and regulatory costs of doing business, creating clear implementable strategies for ensuring stability and security, developing robust education and health structures and being seen to be visibly addressing corruption through the development of transparent county level public financial systems.
Additionally, counties should participate in the Sub National Ease of Doing Business Index by the International Finance Corporation to determine how competitive they truly are.
In the mid to long-term the counties can make efforts to develop Public Private Partnership mechanisms to pull in the private sector to address county population needs.
County governments should also clearly define accessible career pathways for the current and future skill needs so as to identify those who are already well suited for key activities in their jurisdiction to catalyse economic activity.
In the long-term, counties should consider the development of an investment fund where some revenue can gain interest.
This can be divided into short, medium and long-term strategies that include deposits, treasury bills, treasury and corporate bonds as well as strategic equities with the ultimate aim of creating a county ‘sovereign wealth fund’. Through these strategies, county governments can build capital in a prudent manner.
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Note: The results are not exact but very close to the actual.
