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Is it time to run counties as devolved business units?

By Oliver Mwenda | August 9th 2018

Devolution, in theory, has positioned counties at the heart of the government plans to boost economic productivity and decentralise political power. Counties are not merely drivers but accelerators of economic growth. The region’s economies are agile and ripe for local and international investment with a population eager to reap the fruits of devolution.

 I am sure all of us agree that we have a stake in the sustainability and success of devolution. A successful and a balanced devolved system of government should be both sustainable and resilient amidst the changing times.

But why not?

Given the substantial amount of taxpayers’ money that is allocated annually to the counties, isn’t it time we start considering them as 47 business units? Wouldn’t it be just and appropriate to apply to them the same standards used in gauging the efficacy and success of businesses? 

Getting devolution right will be hugely important in shaping the country’s economy. Just like in business, counties should be judged by how efficiently they utilise resources within their jurisdiction. This means counties should adapt strategies that makes them competitive by increasing productivity and thereby generate more value from fewer resources.

Much like businesses, there will never be enough budgetary allocation to meet their needs, the difference between the two entities is how private sector views efficiency not just as a cost management issue but also a strategic opportunity to reinvent their structures and processes to optimise on value to their customers and shareholders. 

The principle of not spending what you don’t have should explicitly apply to county government operations. Presently, according to the controller of budgets, counties owe suppliers, creditors and contractors an amount close to Sh90 billion. Mounting debt is made worse by limited transparency and despite the widespread concerns that this has elicited; the issue has been relegated to the periphery at the expense of 2022 politics.

Business solutions needed

It is often said that business problems require business solutions. To restructure or not to restructure their debts is question county governments will have to face. If immediate measures are not taken to mitigate the current debt situation, then debt restructuring is inevitable if we are to avert a possible financial crisis in the counties.

The rising wage bill occasioned by a bloated workforce remains a key pressing issue affecting devolution. Everyone agrees and expects that public services need to be better, quicker and cheaper.

For this to happen, a professional and competent Human resource is needed. There is however a shortage of professionals willing to work in counties due to lower remuneration and the unfortunate risks that comes with working in a political environment.

But just like in business, an efficient workforce is needed to create a sustainable, profitable long term organization. To maximise output, counties have to attract and retain competent professionals and embark on institutional transformation that involves instilling professionalism in staffs conduct and behavior and a radical cultural mindset change.

Bureaucracy remains a bottleneck when it comes to effective service delivery in the counties. The key consideration in any public service, just like in business service model, is to consistently put the needs of the customers first and to figure out how to deliver the best services, or for the counties sake, to meet the needs the of local people. Decision making ought not to be laborious and time consuming as evidenced in counties.

Public participation and the oversight role played by the county assemblies can sometimes be a hindrance to quick decision making but these are the price that the leadership has to pay in the name of democracy.

Just like in Business where board members approve or disapprove the CEO’s strategies, governors need to develop foolproof strategies that can pass the test of county assemblies and citizens scrutiny.

Outsourcing as a solution

The burden placed on county government remains heavy; this is why I propose adoption of the outsourcing model as used in the private sector. Outsourcing will enable the county governments to concentrate on specific areas and allow the private sector to conduct activities which they have specific specialty in.

Private sector can do what the state does but only better and in a more cost effective manner.

Outsourcing, however, carries serious risks especially touching on corruption and conflict of interest in award of contracts. This is where transparency and accountability mechanisms have to be put in place. In every county government function, there will always be some role for the private sector.

Businesses remain vulnerable to the same risks and challenges facing the public sector but in my conviction, managing counties as one would run a business is the best methodology to achieve devolution success.

Mr Mwenda is a policy and communications specialist.

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