Home Business Counties miss first half revenue collection target by Ksh 20B

Counties miss first half revenue collection target by Ksh 20B

Kirinyaga County Governor Anne Waiguru

County governments managed to raise Ksh 19.95 billion in the first half of the year to December 31, 2023 as their own-source revenue according to a report by the Controller of Budget.

The County Budget Implementation Review Report for the first six months of the 2023/24 fiscal year indicate that the collection though a 3.5pc improvement when compared to the same period in the previous year of Ksh 13.11 billion, it was still below target by Ksh 20.15 billion.

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“The underperformance of own-source revenue collection implies that the counties could not implement some planned activities due to budget deficits,” said Controller of Budget Dr Margaret Nyakang’o.

In the current year, the 47 devolved units target to raise Ksh 80.2 billon as own-source revenue.

The half year collection comprise OSR comprised of Ksh 13.55 billion from ordinary own sources of revenue and Ksh 6.40 billion from Facility Improvement Fund (FIF)/Appropriation in Aid (A-I-A.

“The Controller of Budget noted over-reliance on the health sector as the main source of revenue which amounted to Ksh 6.4 billion and represented 32.1pc of the total realised own source revenue. Many counties depended on FIF to prop their revenues, such as Elgeyo Marakwet at 79.6pc, Homa Bay at 78pc and Siaya at 75.7pc,” stated the report.

Nyeri County had the highest rate of local revenue collected in the first six months of the year with OSR amounting to Ksh 570.9 million equivalent to 71.4p of the annual target of Ksh 800 million.

“The raised OSR includes Ksh 366.97 million as FIF/Heath and Ksh 203.93 million ordinary OSR. The total funds available for budget implementation during the period amounted to Ksh 3.72 billion.”

Narok County followed with the highest OSR collection at Ksh 2.9 billion equivalent to 63.9pc of annual revenue target of Ksh 4.6 billion.

Other high OSR collectors include Isiolo County which collected Ksh 168.2 million equivalent to 62pc of annual target followed by Elgeyo Marakwet , Samburu and Turkana counties with 56.3pc, 55.7pc and 48.6pc of annual targets respectively.

Counties that had the lowest percentage of local revenue collected to the annual local revenue target included Mandera at 15.3pc, Kakamega at 13.7pc, Kajiado at 12.8pc, Kericho at 12.7pc, Kilifi at 10.5pc and Machakos at 7.4pc respectively.

According to Dr Nyankang’o, many counties despite raising a significant amount from FIF through the health sector, they still lack mechanisms of implementing the funds.

“County governments are advised to develop their Regulations to implement the Health Facilities Improvement Financing (FIF) Act 2023. The FIF Act provides for the financial autonomy of health facilities whereby the facilities retain their collections for use to enable them to deliver quality services,” she stated.

The devolved units are further urged to build the capacity of key staff involved in revenue collection and implement revenue enhancement programmes to realise the OSR potential.

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