Nine years later, devolution still a far cry from what was envisioned
By Patrick Muinde
| August 28th 2021
The seventh devolution conference was to happen in Makueni County this week. It is sad that Covid-19 has denied the business community in that region the bonanza that comes with the conference. It is my sincere prayer that the investors who had already committed their capital to facilitate the conference could find reprieve from the organisers.
On a broader perspective, however, the intent of the devolution conference was to: one, provide a platform to reflect on the performance and achievements of the devolved units; two, offer an opportunity for peer learning; three, showcase innovation, creativity, and lessons learned to improve on county service provision; four, bring together various stakeholders to share experiences and provide a coordinated approach on interventions at the devolved level; and five, to explore options to deal with challenges affecting the devolved units and the emerging issues.
On the negative side, the devolution conferences have also served to demonstrate official extravagance and waste in the public service. It has also provided fodder for political posturing, raw manifestation and abuse of power and the reality of exclusion of the primary stakeholder – the citizen – in government decision making.
Apart from the business people, the ordinary local communities are often left with memories of which county boss, political party leader or senior bureaucrat had the largest convoy or the biggest and sleekest automobiles.
What we must never lose sight of is the primary purpose of adopting a devolved governance system. It was meant to facilitate local communities to take charge of their own development agenda and participate in their governance.
As we move to 2022, every county will have a mandatory transition in their leadership due to the constitutional term limits for the county bosses. So, it would be in order to appraise their contribution to the national development and socio-economic welfare of local communities.
From an economic point of view, it is hard to find a single indicator to evaluate the impact of leadership in economic development.
The Kenya National Bureau of Statistics (KNBS) has developed some baseline data in its first compilation of Gross County Products (GCP) in 2019. From this report, we can find snippets of evidence on the role the counties have played in the national development and re-organisation of the economic structure of the country.
The first glaring evidence is on their Own Source Revenue (OSR) performance over the 2013-2020 period. According to the report, OSR accounted for 12-13 per cent of the total financing for the county governments.
This implies that there have been no significant shifts in the regional economic activities. Thus, the counties remain highly dependent on the national revenue transfers. It is estimated that at least Sh2.4 trillion will have been transferred to the devolved units by June 2022.
While this indicator is not meant to imply that there are no good things that have happened in the devolved units, it seems to negate impact at the primary object of devolution. Our devolved governance structure heavily borrowed from South Africa and USA models, where devolved units have significant autonomy in financing and management of their local economies. On this score, the pioneer county bosses do not seem to have faired well.
The second indicator is the average county contribution to the Gross Value Added (GVA) in the country. In the period 2013-2017, the average GVA was 2.1 per cent, with a huge variation among the individual counties.
Simply put, GVA gives us the amount of goods and services that have been produced by the counties after subtracting our total direct investment into the counties. Thus, it would appear there is still noticeable low economic productivity individually and collectively across the counties.
Individual growth rates
In terms of individual county contributions to the national Gross Domestic Product (GDP), the top five counties were Nairobi, Nakuru, Kiambu, Mombasa and Machakos. These contributed 21.7, 6.1, 5.5, 4.7 and 3.2 per cent, respectively between 2013 and 2017.
The least five contributors were Isiolo, Samburu, Lamu, Marsabit and Tana River at 0.2, 0.3, 0.4, 0.5 and 0.5 per cent, respectively. On their individual Gross County Product (GCP) growth rates, Elgeyo Marakwet, Nyandarua, Laikipia, Siaya and Tharaka Nithi had the highest, in that order. The least growth rates were in Embu, Garissa, Kisumu, Kitui and Nandi. This evidence points to maintenance of the status quo in terms of distribution of economic activities prior to devolution. There are however remarkable shifts for the counties that registered high individual growth rates.
The impact on the welfare of the local communities as measured by the per capita GCP growth rates was highest in Tharaka Nithi and lowest in Nairobi. This suggests that the poorest counties prior to devolution may have benefited the most. However, this may be misleading, relative to their baseline data.
The third important indicator that may interest economic planners is the impact on the economic structure of the country. Unfortunately, there are no significant adjustments here and the county economies are hugely dependent on agricultural activities.
Counties with the highest potential as per the statistics are the usual suspects of Nakuru, Nyandarua, Kiambu, Elegyo Marakwet, Meru, Narok and Bomet. Industrial activities in manufacturing have remained concentrated in the urban areas of Nairobi, Kiambu, Mombasa, Machakos, Kisumu, Nakuru and Kajiado.
From the foregoing evidence, it would be safe to postulate that there has to be a radical shift in the leadership orientation of the counties if the country is to realise the promises of devolution. Given, there has been a significant direct injection of money into the devolved units that does not seem to be making the right impact to drive them into semi-autonomous economic units.
Ten years is long enough time for the individual counties to have identified a niche for themselves and start investments towards it.
It is quite ingenious for each county to seek to maintain the status quo in subsistence agriculture and retain industries in the urban and peri-urban areas. Economic history teaches us that transformations do not happen by accident but rather are a consequence of meticulous development plans well executed.
It is quite disheartening that priorities and absorption of devolved funds are majorly on salaries and other recurrent budgets.
Distributions from the Controller of Budget monitoring reports indicate salaries and emoluments account for an average of over 45 per cent of county expenditures over the past eight years. The average absorption rate for recurrent expenditure over the period was 89.1 per cent while development expenditure averaged 55.9 per cent.
Even then, development activities have been thinly spread on small uneconomical and largely unsustainable projects. This implies lack of benefits from economies of scale and value for money in the medium and long term.
As focus shifts towards the change of guard in several counties, it is my considered opinion that the electorate must carefully choose who to entrust their counties with. It cannot be about party affiliations or who is distributing the highest volumes of political handouts.
At least on this account, I would ask the voters to be extremely selfish and focus on their individual and collective welfare at the community level. Socio-economic self preservation must be the rule of the game in the choice of the next crop of county bosses.
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