Scale up the absorption of counties’ development budgets to spur growth
Nairobi County Governor Johnson Sakaja (fourth left) with officials from Nairobi Water and Sewarage Corporation at Irati Shaft Water Turnel in Murang’a county on November 11, 2024.
Devolution of power remains the centerpiece of the Constitution of Kenya 2010. Optimism abound among Kenyans on the potential of county governments to respond to their collective needs.
For county governments to fulfil the aspirations outlined in Article 174 of the Constitution, they need to ensure full absorption and utilisation of development expenditure available to them.
Development expenditure plays a pivotal role in accelerating growth of counties. This expenditure constitutes costs incurred in order to create assets that will provide long-term public goods, including roads, hospitals, and schools.
The Public Finance Management (PFM) Act requires that over the medium term, county governments should spend a minimum of 30 per cent of their budgets on development. The absorption threshold is seen as a good benchmark to determine the efficiency of specific counties in utilising public resources for the benefit of citizens.
Poor budget absorption hinders infrastructural development and productivity of the devolved units and is a blow to residents in the affected counties.
The County Governments Budget Implementation Review Report for the financial year 2023/2024 released recently by Controller of Budget Margaret Nyakang'o shows that 10 counties spent nothing on development projects.
During the period under review, the report indicates that the county governments’ development expenditure amounted to Sh6.71 billion, representing an absorption rate of 3 per cent of the annual development budget of Sh205.33 billion. Most of the devolved units are channeling a huge chunk of their resources towards personnel emoluments and non-essentials such as travel and entertainment.
The implications of zero development spending are far-reaching. Subsequently, essential services such as healthcare facilities, roads, and water infrastructure suffer from lack of investment, denying citizens their constitutional rights, hence defeating the whole purpose of devolution.
Zero spending on development expenditure could also lead to deteriorating infrastructural facilities, which will deter investments and compromise the counties’ capacity to attract strategic development partnerships crucial for their sustained growth.
To scale up absorption of development funds in county governments, there is need for a better financial management and priority setting at the county level.
Both the national government and the Senate should intervene and ensure a balanced spending approach by county governments. Counties must also prioritise project planning, implementation and monitoring to enhance absorption of development funds.
The writer is a banking and finance expert. Email: [email protected]
