Most counties may not implement some of their planned activities, including development projects, in the current financial year due to budget deficits, according to the Controller of Budget (CoB) Margaret Nyakang’o.
Dr Nyakang’o, in a report, attributed this to a sharp decline in local revenues collected by the devolved units.
Nyakang’o noted there has been a decline in local revenue collections so far, meaning counties are unlikely to collect enough within the remaining period of 2022/2023 to fully finance their approved annual budgets.
"The counties will need to perform magic in the remaining period of this financial year to fully meet their financial obligations," Nyakang’o said, adding; "There was a decline in revenue collected in the first quarter of 2022/2023 compared to a similar period in the previous fiscal year."
“Under-performance in own source revenue collection and high level of pending bills are among the key challenges that hampered effective budget execution during the period,” said the report dubbed; County Governments Budget Implementation Review Report for the first quarter 2022/2023, which was published on CoB's official website December 25 last year.
Nyakang’o noted that all county governments, cumulatively, generated Sh6.17 billion against the total annual target of Sh57.01 billion.
“As many as 42 counties recorded a performance that was below 25 per cent of their annual revenue targets as far as local revenue collection is concerned. Therefore, some planned activities may not be implemented during this financial year due to budget deficits,” Nyakang’o said.
She has advised the counties to build the capacities of revenue staff and implement programmes to realize their revenue potential.
Kiambu, the second largest county in terms of budget allocation, 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, Kiambu collected Sh583.5 million in local revenues.
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Kisumu, whose 2022/2023 own revenue forecast was set at Sh1.76 billion, only managed Sh186.69 million in the first quarter, representing 10.6 per cent of the annual target. The county collected Sh243.89 collected in the first quarter of the previous financial year.
Nakuru's revenue collection dropped by over Sh358 million (44 per cent) over the period under review, according to the report. From Sh815.67 million collected in the first quarter of the 2021/2022 financial year, the county only managed Sh456.82 million this fiscal year.
Laikipa, whose own-source revenue target is Sh1.29 billion, only collected Sh147 million or 11.4 per cent of the target. This was a drop of over Sh35 million (19.6 per cent). The county collected Sh182.8 million during the same period in the previous financial year.
Kirinyaga's own source revenue dipped by over Sh45 million during the period under review. It collected Sh58.73 million, which is 11.7 per cent of the county’s target of Sh500 million. The county collected Sh104.48 million during the same period in the previous financial year.
In Lamu, the county government collected Sh8.95 million (7.5 per cent) of their 2022/2023 target of Sh120 million in the first quarter of 2022/2023. This was a drop of 50 per cent compared to the Sh15.15 million collected during the same period the previous year.
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 projected for the current year. In the first quarter of the 2021/2022 financial year, Kitui collected Sh91.43 million.
Kilifi also recorded a drop after the administration collected Sh85.64 million (5.8 per cent) against an annual projection of Sh1.47 billion. During a similar period in the previous fiscal year, Kilifi collected Sh105.47 million.
Likewise, Kisii collected Sh43.94 million (6.8 per cent) against a target of Sh650 million, a drop of over Sh23 million compared to Sh66.54 million collected in the first quarter of 2021/2022.
Machakos improved its collections by Sh40 million during the period under review. However, Nyakang’o has termed the administration's effort as an underperformance when viewed against its 2022/2023 fiscal period projection.
Machakos, whose 2022/2023 revenue target is Sh1.69 billion, collected Sh197.86 million in the first quarter of this year compared to Sh155.06 collected last year, the report says.
The first quarter of the fiscal year covered July, August and September when the entire country was focused on politics which may have affected revenue collection.