Economy

County revenues drop Sh4.6bn on Covid heat

COB

Controller of Budget Margaret Nyakang’o. FILE PHOTO | NMG

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Summary

  • Revenue collection by counties for the year ended June dipped by Sh4.55 billion in the wake of restrictions imposed to curb the spread of the coronavirus disease, new data shows.
  • The Controller of Budget (CoB) says that Sh35.77 billion was raised in the period, reflecting an 11.2 percent fall from Sh40.3 billion a year earlier.
  • The restrictions in the last quarter of the year hurt businesses where counties rake in billions from rates, cess and parking fees.

Revenue collection by counties for the year ended June dipped by Sh4.55 billion in the wake of restrictions imposed to curb the spread of the coronavirus disease, new data shows.

The Controller of Budget (CoB) says that Sh35.77 billion was raised in the period, reflecting an 11.2 percent fall from Sh40.3 billion a year earlier.

The restrictions in the last quarter of the year hurt businesses where counties rake in billions from rates, cess and parking fees.

Kenya imposed a dusk-to- dawn curfew in March, banned movement into and out four counties including Nairobi and Mombasa and suspended international flights after recording the case of Covid-19 infection.

The directives forced traders and motorists to stay at home, businesses to close and others reduced operating hours, leaving counties with reduced revenue streams in the race to hit their annual collections targets.

“This under-performance of own-source revenue collection was, partly, as a result of economic disruptions occasioned by actions taken by the government to contain the spread of the Covid-19 pandemic which impacted all sectors of the economy,” the Buget controller says in the latest report.

Only five counties; Homa Bay, Taita Taveta, Machakos, Lamu and Bomet exceeded their annual collection targets while Meru, Nandi, Busia, Siaya, Wajir, Kajiado and Kisii raised less than 50 percent of their targets.

In the last quarter of the year (March— June) during the lockdown period, own source revenue fell 32 percent to Sh7.73 billion from Sh11.38 billion in similar period a year earlier underlining the adverse effects of the restrictions.

Counties raise their revenue from among others land rates, market and trade licensing fees, parking fees, liquor licensing, entertainment and cess among others.

The devolved units have missed revenue targets since 2013 in what has seen them rely on disbursements from the National Treasury to foot development projects like health and roads construction.

Corrupt officials who collude with businesses and motorists and weak resources to nab defaulters have also been blamed for the perennial misses in revenue targets across the counties.

The decline in collections turn the spotlight on counties who had gone for three months without getting cash from the National Treasury following Senate delays in approving a Bill that guides release of the cash.