Six Counties Begin Crafting Revenue Enhancement Action Plans with CRA and World Bank Support
The Commission on Revenue Allocation (CRA), with funding and technical support from the World Bank, held a four-day Capacity Building Workshop in Nairobi from 12th to 15th May 2025.
The workshop focused on sharing findings from the Comprehensive Own Source Revenue (OSR) Potential and Tax Gap Study and supporting six counties—Murang’a, Machakos, Wajir, Kisumu, Bungoma and Nandi—to begin drafting their County Revenue Enhancement Action Plans (REAPs).
While opening the event, the CRA Chairperson, CPA Mary Chebukati explained that the initiative is aligned with CRA’s constitutional mandate under Article 216(2), which requires the Commission to make recommendations on matters concerning the financing and financial management of county governments. It also fulfills Article 216(3)(b), which tasks CRA with defining and enhancing the revenue sources of both national and county governments.
The Progress at a Glance: Where We Are Now
CRA’s OSR Potential and Tax Gap Study dissemination and REAP development are progressing in phases:
1. Methodology Dissemination (Completed)
CRA disseminated the OSR methodology to 10 counties: Taita Taveta, Uasin Gishu, West Pokot, Homa Bay, Kakamega, Laikipia, Kitui, Nairobi, Mombasa and Makueni.
2. REAPs Developed and Launched (Completed)
Tailored Revenue Enhancement Action Plans have been finalized and launched in the five pilot counties: Taita Taveta, Uasin Gishu, West Pokot, Homa Bay and Kakamega.
3. Current Phase (Ongoing)
Dissemination is underway in eight more counties: Kisumu, Nyeri, Kisii, Kericho, Elgeyo Marakwet, Bomet, Migori and Nandi.
4. Upcoming Activities: Development and launch of county-specific REAPs for the remaining counties is set for the next phase of this initiative.
About the workshop
The event was structured in two sessions:
- Days 1 & 2 (13–14 May): Kisumu, Bungoma, and Nandi
- Days 3 & 4 (15–16 May): Machakos, Wajir, and Murang’a
Participants include County Executive Committee Members (CECMs) of Finance, Directors of Revenue, and technical teams from each county. They receive customized briefings on their top revenue streams and methodologies for revenue estimation. Thereafter, they will work collaboratively to draft their REAPs.
In his opening remarks, the CRA Vice Chairperson, Koitamet Olekina, explained that CRA is mandated to make recommendations concerning financing and financial management by Kenya’s county governments. “CRA does not just recommend for counties go get resources, we also recommend on how to manage the resources.”
“I’m glad that Murang’a is telling us that they are ready to face Mount Kenya (after conquering Mt. Muranga.” He joked, urging the county governments to arise to the call of duty with courage and unity of purpose. He challenged the county governments: “You are the only ones who can make Kenya better.” Commissioner Olekina said.
Trends and key observations in counties’ OSR collections since 2013
In her presentation, Commissioner Hadija Juma, noted that the study revealed significant revenue collection gaps, with counties averaging only 65% of their annual OSR targets.
Commissioner Juma observed that there had been a slight improvement in recent years: A notable spike in FY 2023/24 collection (Kshs. 59.0B) is the highest in the 11-year trend,
possibly reflecting the early impact of reforms such as REAPs, digitization and taxpayer sensitization.
She, however, noted that there has been a consistent underperformance by counties in meeting their OSR targets over the 11-year period.
Despite modest increases in revenue targets, actual collections have lagged, averaging about 65% of the target, with some years performing significantly below this mark.
Furthermore, there has been:
- Persistent Revenue Gaps: From FY2013/14, counties failed to meet their revenue targets. For instance, in FY 2023/24, counties targeted 78.6 billion but only collected Kshs. 59.0 billion, leaving a shortfall of nearly Kshs. 19.6 billion.
- Stagnant Actual Revenues: From FY 2013/14 to 2021/22, actual OSR collections hovered between 26.3 billion and Kshs. 40.3 billion, showing little growth despite increased economic activity and population.
- Target Growth vs. Real Growth: Targets have risen sharply—from Kshs. 54.2 billion in 2013/14 to 78.6 billion in 2023/24. However, actual performance has not kept pace, suggesting overestimation of county capacity or failure to match targets with reforms.
Kenya’s 47 county governments have substantial untapped revenue potential. While the trend shows gradual improvement, especially in FY 2023/24, the overall performance remains below optimal levels
Critical issues affecting counties’ OSR performance include:
- Systemic inefficiencies: The consistent shortfalls highlight poor enforcement, leakage and possibly inflated targets not grounded in economic reality.
- Weak revenue administration: Many counties lack the institutional and technological capacity to bill, collect and account effectively.
- Limited innovation: Until recently, few counties had embraced digital tools, automation or structured citizen engagement in revenue processes.
- Political and public resistance: OSR mobilization often faces resistance from taxpayers due to lack of trust, visibility of service delivery and awareness.
Achieving full revenue potential demands institutional reforms, digitization and public trust-building, not just target setting. The current momentum must be harnessed and accelerated to ensure counties become self-reliant and deliver on the promise of devolution.
Why REAPs Matter
The REAP is a powerful tool that helps counties identify, prioritize, and grow their own revenue streams. By increasing OSR, counties can fund critical services, improve financial stability, and strengthen Kenya’s devolved system of government.
How are county governments developing REAPs?
During the workshop, CRA’s Ag. CEO, Roble Nuno guided on the approach that county officials are expected to follow in developing their County Revenue Enhancement Action Plans (REAPs).
The approach is grounded in the findings of CRA’s Own Source Revenue (OSR) Potential and Tax Gap Study and guided by data-driven decision making.
Meimuna Mohamed, a Consultant with the World Bank, supoorted the counties to draft their Revenue Enhancement Action Plans (REAPs) using this approach:
- Analyze OSR Potential and Tax Gaps: Review the specific OSR potential and tax gap data for their county, as presented in CRA’s OSR Study Report.
- Disaggregate Revenue Streams: Break down their OSR potential into 15 distinct revenue streams to allow for targeted planning and intervention.
- Map Revenue Administration Processes: Outline the current revenue administration process for each of the identified streams, including collection, enforcement, and reporting mechanisms.
- Identify Challenges and Opportunities: Assess the key barriers and potential for improvement within each revenue stream.
- Develop Tailored REAPs: Use the insights gained to draft practical and actionable Revenue Enhancement Action Plans, drawing on proven best practices from within Kenya and beyond.
This structured approach ensures that each REAP is grounded in evidence, tailored to the county’s context, and capable of unlocking sustainable revenue growth.
Through tailored REAPs, CRA is guiding counties to tap into untapped revenue potential—from property rates, to licensing fees and natural resource charges—while addressing systemic challenges like weak legal frameworks, low taxpayer awareness and outdated collection systems.
By integrating best practices such as mobile money solutions, automation and civic education, the REAPs will transform how counties raise and manage their OSR, for fiscal sustainability and improved service delivery.
