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Counties miss revenue collection target by Ksh 19.6B

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County governments only met 65.9pc of their revenue collection target in the 2022/23 fiscal year according to data by the National Treasury.

As at the end of the last financial year, county governments collected a total of Ksh 37.8 billion against the target of Ksh 57.4 billion with only 23 devolved units recording improved collections.

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According to the Draft 2023 Budget Review and Outlook Paper, Homa Bay, Narok and Elgeyo Marakwet counties recorded the fastest Own Source Revenue (OSR) collection growth rate of 128.5pc, 122.5pc and 84.4pc respectively in the last two financial years.

Data by the National Treasury indicates that in the last financial year, Homa Bay County local revenue collection grew by 235.2pc to Ksh 491.5 million from Ksh 146.6 million in the FY2021/22 while that of Narok County grew by 129.4pc to Ksh 3.1 billion from Ksh 1.3 billion over the same period.

Similarly, at the close of the last financial year, Elegeyo Marakwet County revenue collection hit Ksh 217.4 million from Ksh 162.3 million, a 34pc increase.

“Analysis of OSR performance in the FY 2022/23 indicates that 40 County Governments were able to collect more than fifty percent of their annual OSR target. The top performing counties as far as OSR collected as a percentage of target is concerned were Lamu 119.8pc, Kirinyaga 112.3pc, Kitui 110.6pc and Samburu 94.3pc while the least performing counties were Murang’a 42.2pc, Mandera 42.2pc, Marsabit 34.5pc and Nyamira 26.3pc,” said Treasury.

High revenue collection growth was also recorded by Samburu County at 88.7pc, Kajiado 65.8pc and Isiolo 40.8pc.

Biggest revenue decline between FY2021/22 and FY2022/23 was recorded by Vihiga County whose revenue collection dipped to Ksh 108 million from Ksh 236.3 million, a 54pc drop.

Makueni County suffered the second highest revenue decline of 44pc over the same period, netting only Ksh 418.8 million from Ksh 749 million.

Laikipia County also suffered heavy revenue collection decline of 43.6pc as OSR fell to Ksh 504 million from Ksh 894.8 million.

Over the last two financial years, Wajir, Busia and Marsabit counties recorded the highest reduction in OSR collection at 20pc, 20.2pc and 25.5pc respectively.

“The National Treasury notes that a number of County Governments reported revenue collection way below their target. This could be attributed to a number of factors such as lack of proper revenue administration structures, revenue leakages, lack of internal controls or unrealistic revenue targets,” Treasury observed.

The total actual expenditure by the County Governments in the FY 2022/23 was Ksh 428.9 billion of which actual expenditure on development was Ksh 98 billion while on recurrent was Ksh 330.9 billion.

On the other hand, the expenditure on wages was Ksh 195.1 billion. The expenditures were against actual revenue amounting to Ksh 466.0 billion.

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