Kisumu, Bungoma and Makueni counties have been presented with their creditworthiness ratings, after a recent multi agency-sponsored survey and training.
The reports were presented at an event dubbed ‘Going Public on Credit Ratings’ at a Nairobi hotel, where the respective governors were in attendance.
The chief guest was Senate speaker Kenneth Lusaka.
The survey was conducted under the County Credit Worthiness Initiative which is a collaboration between the National Treasury, Commission on Revenue Allocation (CRA), the Capital Markets Authority (CMA) and County Governments supported by the World Bank Group.
The three counties were part of the nine devolved units prequalified to serve as the pilot cohort for the Kenya County Creditworthiness Initiative (CCI).
On January 29, 2019, the World Bank unveiled the creditworthiness academy that prequalified nine counties namely Meru, Laikipia, Bungoma, Nandi, Mombasa, Kisumu, Lamu, Makueni, and Samburu which were selected through an objective criteria to be pilot counties.
Nyandarua County Government was to be a late inclusion in the pilot county governments due to its clean audit report in the financial year 2017/18.
Counties underwent trainings-cum-surveys that would rate them on the merit of creditworthiness. The criteria used to arrive at the decision were county self-assessment on creditworthiness, creditworthiness training, and work-planning, technical assistance to counties and other national government agencies and knowledge and outreach.
Speaking during the unveiling, CRA Chairperson Dr. Jane Kiringai said that the main objective of the initiative is to assist county governments to access financing through capital markets for public infrastructure development and service delivery.
In his remarks, World Bank Group’s Program Leader Allen Dennis noted that the capacity building and credit rating support provided so far, were initial steps for County Governments in Kenya to be better prepared to access development financing.
Dennis further noted that the World Bank Group was focused on identifying solutions to the key risks, market failures, and obstacles that prevent market-based financing from playing a greater role in addressing development challenges as part of its Maximizing Finance for Development agenda
CMA acting chief executive Wycliffe Shamiah expressed confidence in the initiative terming it as ideal in achieving prudent financial management in the counties.
“The great interest by counties to seek market-based funding is a clear demonstration of the level of interest in the capital markets as a source of long-term funding to support capital intensive infrastructure growth for county governments,” he said
CRA Commissioner Dr. Irene Asienga emphasised that after the credit rating, the Commission together with the World Bank Group will provide additional support to county governments towards improving their creditworthiness by addressing the issues highlighted in the rating reports.
“The Commission is considering the roll-out of the programme to the remaining 37 County Governments subject to availability of funds and especially if the pilot counties prove to be a success story in the financing of capital projects.”