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INSIGHTS: Annual Implementation Reports 2016/2017

In August 2017, the Office of Controller of Budget (OCoB) released the annual report on how the national and county governments implemented their budgets.

Jason Lakin and his organization conducted a review of that report and came up with very interesting observations.

To start with, since devolution commenced, counties have been increasing local revenue collection every year. This was a good thing.

In fact, in the first year, most counties collected more revenues that what was collected by their previous local authorities. They started with a good psyche.

This came to an abrupt stop in financial year 2016/2017 when overall local revenue declined from Ksh. 35 billion to Ksh. 33 billion! The drive and spirit for local revenue collection had died off. No reasons provided by the office of controller of budget on this matter.

Further, IBP Kenya observed that twenty nine (29) counties raised less local revenue in 2016/2017 than the previous year 2015/2016. This list include some of the biggest revenue collectors in Kenya include: Narok, Nakuru, Nairobi and Kiambu. These are the kings of revenue collection in Kenyan standards.

When looking for a good example for automation of county revenue collection, Kiambu county comes to mind. This is changing. This county’s revenue collection declined by over Ksh. 400 million.

The fact that big counties with lots of local revenue capacities are experiencing decline in local revenue collection is a message that something is wrong.

Many of us will blame these misfortunes on elections. This might not be true. The revenues for Garissa, Isiolo, Kajiado, Elgeyo Marakwet declined in both FY 2015/2016 and FY 2016/2017.

This may be attributable to poor collection practices, but may also reflect the limited options that most counties have for diversifying revenue sources without increasing or introducing regressive use fees.” – Dr. Jason Lakin.

County absorption rates have hovered around 80 percent for the last 3 years. In fiscal year 2016/17 only Lamu County had an overall absorption rate below 70 per cent. In 2015/2016, there were four (4) such counties (Embu, Kisumu, Makueni and Vihiga).

More updates on the way…

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