Capital Markets

County revenues decrease Sh1.3bn on shaky economy

COB

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

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Summary

  • Internal revenues for counties dipped Sh1.33 billion in the year ended June, highlighting struggles the units are facing as the economy recovers from the coronavirus-induced disruptions.
  • Data by the Controller of Budget (CoB) office shows that the 47 devolved units raised Sh34.44 billion in the review period, down from Sh35.77 billion collected the previous year.
  • The decline came despite the easing of restrictions that had been imposed from March last year after Kenya recorded the first case of the coronavirus disease (Covid-19).

Internal revenues for counties dipped Sh1.33 billion in the year ended June, highlighting struggles the units are facing as the economy recovers from the coronavirus-induced disruptions.

Data by the Controller of Budget (CoB) office shows that the 47 devolved units raised Sh34.44 billion in the review period, down from Sh35.77 billion collected the previous year.

The decline came despite the easing of restrictions that had been imposed from March last year after Kenya recorded the first case of the coronavirus disease (Covid-19).

Narok topped the list of counties with the biggest falls, its revenue dipping 73.6 percent to Sh618.9 million, while Embu posted a 26.3 percent fall to Sh375.3 million while collections for Machakos decline 5.6 percent to Sh1.29 billion.

Dismal revenue collections continue to squeeze funds for the delivery of basic services like health and will lead to the accumulation of unpaid bills across the counties.

“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 therefore lead to accumulation of pending bills,” Ms Margaret Nyakango says in the report.

June to October is the high season of the wildebeest migration at the Maasai Mara Game Reserve but Narok stared at losses in the absence of the tourists even as the State allowed the resumption of domestic and international flights.

The data shows that only Turkana, Tana River, Uasin Gishu, Lamu, and Migori met or exceeded their annual revenue targets for the year.

Kenya started easing the restrictions that included a dusk-to-dawn curfew, movement bans into four counties including Nairobi and Mombasa, and prohibitions on social gatherings in July last year in a bid to revive the battered economy.

But businesses have remained subdued despite easing of the restrictions with some closing down, denying counties collections from streams that include rates, Single Business Permits (SBPs), and liquor levies.

Parking and cess for lorries ferrying agricultural produce and construction materials across counties have also been disrupted.

Counties have also blamed the low revenue collections on a weak workforce to enforce collection, corrupt officials, and the use of outdated systems like valuation rolls that do not reflect the appreciation of land and houses in the market.

Dismal internal revenue collections have pushed counties to rely on transfers from the National Treasury to pay salaries and deliver basic services like health and the construction of roads.