Nairobi City's digital payment platform has failed
By Philip Kisia | January 9th 2017
The automation of Nairobi County government’s payment of rates, parking fees and other services was meant to enhance accountability, raise revenue collection and curb corruption.
And with the onset of devolution in 2013, Dr Evans Kidero was elected the first Nairobi County governor. He therefore took up the heavy role of managing a modern city looking forward to a bright future. As the last Town Clerk for Nairobi, I am deeply disappointed in the lack of visible improvement of the city’s financial management.
Further, as a Kenyan who resides in Nairobi and an avid taxpayer, a strong sense of obligation drives me to shed more light on the county’s automation project.
First, the idea behind automation of the entire council commenced during the previous administration. The project was part of an internal reform agenda that sought at making the council more efficient, effective and customer-focused by enhancing customer experience, ensuring a cashless approach with no human contact, and reducing the cost of collecting revenue by designing a system that would detect and halt all leaks, thereby increasing revenue collection exponentially.
The decision to automate was reached after a comprehensive ICT strategy was developed through the assistance of e-government (at the time a department within the Office of the President).
While my administration was able to procure the system and initiate the pilot stage, the current administration ejected the initial tendering and eventual contracting company (Hausram).
Being that the matter is before arbitration, it is of paramount importance that we clearly appreciate the system was not designed as an over-the-counter service, as this beats the logic of automation.
Therefore, the idea of allocating Jambopay a counter at the cash office and further paying them a commission of 4 per cent, or 1.5 per cent after “negotiations” is suspect as the vendor at this point adds no value to the process of collecting cash.
The other issue the county must address is whether collections have actually improved. I speculate that collections in real terms have actually dropped by more than 50 per cent. In the financial year 2011/12, we collected approximately Sh8 billion.
The county by 2013/14 was able to more than double fees and charges. Logically, the collections should have increased to Sh16 billion.
The fact that the county is now automated we should have expected the revenue to increase by the least 25 per cent taking the total collection to about Sh20 billion.
We must also ask the following: Has the county government commissioned a professional body or firm to carry out an audit trail so that at any given time the county audit team is able to ascertain receivables and reconcile with banking?
Why is it that the county does not have the right to interrogate the system to establish receipting of the receivables? If the vendor’s system is the one receipting receivables, how do you ascertain that all receivables were receipted?
Why is it that the vendor has not, in over three years, assisted the county’s build capacity to enable the CCN staff run the system? This would have enabled the staff to determine on real-time basis how much revenue has been collected.
Why has the county not demanded from the vendor to insure the system so that in case of malfunctioning the county is compensated for revenue lost?
Finally, why did the county engage the company with the commission at 4.5 per cent for money collected through its system, which is way above Kenya Revenue Authority’s at 3 per cent, leave alone the fact that the other provider had signed up at 2.5 per cent?
If indeed this system is working, the county should be collecting not less than Sh20 billion annually.
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