Hit by cash crunch, counties seek to diversify own revenue sources

Kisumu Governor Peter Anyang Nyong'o and Meru Senator and senate Deputy Speaker Murungi Kathuri at the Governors and Deputy Governors induction at Mombasa County.

County governments have agreed to explore new revenue streams.

Kakamega governor Fernandes Barasa, who is the Council of Governors (CoG) Finance Committee chairman, said devolved units can hardly survive on sharable revenue from the National Treasury.

“We had a COG meeting on Tuesday where it was resolved that devolved units focus on growing their own revenue sources to help deal with financial shortages being witnessed,” said Mr Barasa.

The Constitution stipulates that the counties should be allocated at least 15 per cent of the last audited national incomes. Financial experts have in the past faulted counties for weak financial systems, leakages, and waste.

Speaking during a meeting to discuss the Kakamega County Budget Revenue and Outlook Paper (CBROP) on Wednesday, the county chief singled out mining royalties and Public Private Partnership (PPP) programmes as areas being targeted to boost revenue in counties.

Other areas re the blue economy and structured operations at border points such as the Busia One Border Post besides improved agriculture.

Kisumu Governor Anyang’ Nyon’go and his Busia counterpart Paul Otuoma have been at the forefront in pushing for expansion of the blue economy and improving infrastructure in Busia to help boost cross-border trade.

In seeking new revenue streams, CoG is determined to ensure counties meet their set revenue targets to boost service delivery.

Almost all 47 counties have been struggling to achieve their revenue targets, a situation that was aggravated by the Covid-19 outbreak that led to economic hardships.

Barasa argues that counties must synergize efforts to realise their revenue targets and achieve their development programmes. 

He said Kakamega County suffered a deficit of Sh1.71 billion in the last financial year. “Our total cumulative revenue amounted to Sh14.69 billion against a revised budget of Sh16.4 billion, indicating a deficit of Sh1.71 billion,” the governor said. 

“As the chairman of the Finance committee at COG, I promise to push for more revenues to counties to ensure devolution works,” said the governor.

“In the case of Kakamega, I call for immediate review of operations of revenue agencies so that we automate all the activities that are geared towards collecting more money. That’s the only way to survive in the next five years,” added Barasa.

“We are looking at other financing options and I know when we review our budget. Those are some of the targets we are going to put in place,” he said.

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