The Commission on Revenue Allocation launched two reports highlighting counties’ Own Source Revenue (OSR) efforts titled ‘Counties Efforts Towards Revenue Mobilisation: A Stock of the Last Six Years’ and Own Sources Revenue Training Guidelines’ on Wednesday, 26th May 2021.
The Counties Efforts Towards Revenue Mobilisation report assesses counties’ Own Sources Revenue (OSR) growth for the first six years of devolution from FY 2013-14 to FY 2018-19. The report analysed counties’ revenue capacity gaps, revenue streams, revenue mobilisation efforts, the proportion of OSR financing county budgets, the relationship between OSR and Gross County Product (GCP) as well as each county’s economic structure.
“Over the last couple of years, we have observed a shrinking of the fiscal space nationally and therefore see an opportunity for County Governments to enhance their Own Sources Revenue for financial sustainability and more resources for development to the counties in achieving service delivery to its people,” CRA Chairperson, Dr Jane Kiringai said during the launch.
The report highlights counties that have significantly increased revenue collections over the six years: Embu and Garissa Counties dramatically increased their revenue collections growing by 274 and 202 per cent respectively during the period under review. In the same analysis, 15 counties more than doubled their revenue in six years. These are Tana River, West Pokot, Lamu, Kirinyaga, Mombasa, Nandi, Kiambu, Elgeyo-Marakwet, Laikipia, Taita-Taveta, Marsabit, Makueni, Kakamega, Tharaka-Nithi, and Nyandarua.
In contrast, four counties had declining revenue growth over the same period. They are Busia, Wajir, Homabay, and Mandera. We also noted that Nairobi County, while raising the highest OSR and having the highest estimated potential of Kshs. 77 B per annum, has grown by less than 1 per cent over the same period.
Based on a study on counties OSR potential undertaken by the National Treasury in 2018, the report established that most counties raised less than 40 per cent of their estimated revenue potential except counties with game reserves. Management of game reserves appears to confer certain advantages to counties in terms of OSR collection. Narok County for instance collects more than 1 billion shillings annually and that is largely from revenues collected from the Maasai Mara game reserve. Also worth noting is that Samburu County has surpassed its estimated potential while Isiolo, Laikipia and Baringo are among the counties that collect more than 40 per cent of their estimated revenue potential. All these counties are collecting a substantial amount of their OSR from game reserves.
The Commission also launched the Own Sources Revenue Training Guidelines. The Guidelines present a tool for use in the training of county governments to strengthen their technical capacity on Own Sources Revenue administration to improve performance. It enhances the technical capacity of County Government revenue staff, supervisors, management and policymakers on the process of revenue collection, management and enhancement. In addition, the Guidelines aim at improving the fiscal autonomy of County Governments through enhanced own source revenue collection for better revenue management practices.
‘To our Stakeholders and Development Partners, these training guidelines are useful to you also as you seek to support counties in capacity development for revenue administration. It is a uniform tool that will guide training on own-source revenue in the counties,” the CRA chairperson said.
The Training Guidelines target county executives and county assemblies specifically the Governors, County Executive Committee Members, Chief Officers, Speakers, Clerks, Members of the County Assembly, Budget and Finance Committee Clerks, Internal Auditors, Audit Committee Members, Revenue Directors, Heads of Revenue, Fiscal Analysts, Revenue Accountants, Cashiers, Sub-County Revenue Officers, Revenue Supervisors, Revenue Clerks and Enforcement Officers.
These are the first Training Guidelines in the country on OSR and the Commission hopes they will be used by all institutions conducting training on the subject matter and that counties will continue seeking training on OSR.
The Guidelines has five focus areas:
- Institutional, legal and policy frameworks
- Own Source Revenue administration practices
- Revenue accounting
- Revenue Analysis and forecasting
- Ethics and code of conduct
The Commission wishes to thank all its partners who made the production of these documents possible. The United Nations Development Programme (UNDP) supported this study and its publication. The Agile and Harmonised Assistance for Devolved Institutions (AHADI) for supporting the coming together of the multi-agency technical team and providing technical assistance. The Public Financial Management Reform (PFMR) Secretariat for supporting the meetings by the Technical Committee.
The Chief Guests included: Hon. Kenneth Lusaka, Speaker of the Senate, Ms Nancy Gathungu, Auditor General; Dr Margaret Nyakang’o, Controller of Budget, Ms. Mandisa Mashologu, UNDP Deputy Resident Representative – Programme Ms Josephine Kanyi, Senior Deputy Director, the National Treasury, among others.
Click below to watch a video highlighting the launch of the report: