Dip in own-source revenue puts county projects at risk
Most county governments may not implement some of their plans, including development projects, in the current financial year due to unprecedented budget deficits.
The 2022/2023 budget shortfalls are caused by a sharp decline in revenue collected by counties, delayed disbursement of equitable revenue by the national government, huge wage bills and unpaid pending bills.
Failure by President William Ruto and his deputy Rigathi Gachagua to unlock the stalemate on the sharing of revenue with counties may also aggravate the situation.
“Counties will have to wait longer to receive the equitable revenue share, which means most development projects will have to be shelved. Most of the governors will have to push some development projects to the next financial year,” Mr David Kimani, a governance expert, said.
According to the latest report of Controller of Budget (CoB) Margaret Nyakang’o, most counties recorded a sharp decline in local revenue collected in the first quarter (July to September) of 2022/2023. The decline means the devolved units are unlikely to collect enough within the remaining period to finance their approved budgets.
“There was a decline in revenue collected in the first quarter of 2022/2023 compared to a similar period in the previous fiscal year. The counties will need to perform magic in the remaining period of this financial year to fully meet their financial obligations,” Dr Nyakang’o says in the report.
High pending bills
The report also indicates that under-performance in own-source revenue collection and high pending bills are among the key challenges that hampered effective budget execution.
During the period under review, county governments cumulatively generated Sh6.17 billion against an annual target of Sh57.01 billion. The report further shows that 42 counties recorded collected less than 25 per cent of their annual revenue targets.
Dr Nyakang’o has advised the counties to build the capacities of revenue staff and implement programmes to realise their revenue potential.
Kiambu county for instance collected Sh521.23 million (12.7 per cent) against its projection of Sh4.14 billion this year. In the first quarter of the previous financial year, Sh583.5 million was collected.
Nakuru’s revenue collection dropped by over Sh358 million (44 per cent) over the period under review, from Sh815.67 million collected in the first quarter of 2021/2022 to Sh456.82 million this year.
Other counties that recorded poor own-source revenue collection include Laikipia at 11.4 per cent of the annual target, Kirinyaga (11.7 per cent) and Lamu (7.5 per cent). Kitui’s revenue dropped by Sh30 million with the administration only managing to collect Sh61.6 million (10.3 per cent) of the Sh600 million annual target.
Most counties are also grappling with pending bills amounting to millions of shillings. The unsettled obligations include payments to contractors, suppliers of goods and services as well as unremitted statutory deductions s.
This comes at a time when new governors are facing the nightmare of completing stalled projects costing billions started by their predecessors. BY DAILY NATION



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