Counties urged to boost own-source revenue, reduce dependence

Irene Galgalo-PCO

County Governments have the potential to generate Sh260 billion annually in their own source revenue but continue to underperform due to inefficiencies in revenue collection, weak enforcement and unrealistic projections.

Addressing the Second Own Source Revenue Growth Conference in Nairobi, the Principal Secretary for Devolution Teresia Mbaika emphasized the urgent need for counties to become financially self-reliant.

She urged counties to reduce overdependence on equitable share transfers from the national government, which currently funds 80 per cent of county budgets. She noted that internally generated revenue stands at 13 per cent, despite the vast potential for growth.

“We must rethink our approach to revenue collection and adopt best practices in revenue administration. Counties such as Mombasa, Murang’a, Homa Bay and Nakuru that have implemented robust reforms have demonstrated that OSR growth is achievable through effective policies, digitalization and strategic enforcement,” PS Mbaika said.

She pledged the national government’s support in providing technical support and capacity building programs to county governments, specifically citing the Second Kenya Devolution Support Program (KDSP II) funded by the World Bank which seeks to enhance financial and revenue forecasting.

“Under KDSP II, we are working towards an agreeable forecasting model tailored to county governments' needs. I urge county governments to embrace data-driven revenue forecasting as it enhances predictability, improves budget discipline and reduces pending bills,” PS Mbaika said.

She urged all county officials to take lessons from the conference and implement them in their respective counties. She also called on the media to play a crucial role in raising public awareness and holding county governments accountable for their revenue collection and expenditure.

“Let us ensure that this conference gives us actionable solutions to improve revenue collection, enhance service delivery and secure financial independence for our counties,” she said.