Key reforms will boost county governments' performance

National Youth Council acting CEO Gloria Wawira, CoG chair Mutahi Kahiga, CoG CEO Mary Mwiti, Devolution Conference Steering Committee and other stakeholders unveil the Devolution Conference 2025 registration website, in Nairobi, on April 3, 2025. [David Gichuru, Standard] It is almost 15 years since Kenya promulgated the new Constitution that ushered in devolution. But despite the progress, continue to face significant challenges, negatively impacting their capacity to deliver devolved services. At the core of these struggles include delayed disbursement of equitable share from the National Treasury, lower than expected collection in counties own source revenue, improper human resource management practices leading to high wage bill and bloated public service and pending bills accumulation leading to stalled projects. It is these gaps and challenges that informed the design of the Second Kenya Devolution Support Programme (KDSP II). This programme, financed by the Government of Kenya and the World Bank, aims at strengthening county governments performance in the financing, management, coordination and accountability for resources. The programme is implemented by 19 national ministries, departments and agencies and the 47 county governments. A key reform initiative, under the programme, is the automation of the exchequer process. This initiative, being implemented by the National Treasury, Office of the Controller of Budget and Central Bank of Kenya, involves transitioning from manual exchequer requests and withdrawals to a digital system. The aim is to reduce the number of days taken to process an exchequer requisition once submitted by counties. To improve county collection of Own Source Revenue (OSR), the Commission on Revenue Allocation is spearheading the development of revenue streams' mapping guidelines. These guidelines will assist county governments to identify different revenue streams, learning which ones give more revenue compared to others. Presently, only Machakos and Mombasa counties have been successful in mapping their revenue sources due to the steep cost of undertaking the revenue mapping exercise. To collect revenue, counties must forecast how much they expect to collect in a financial year. Accurate forecasting is crucial for counties to meet their OSR targets. To ensure accuracy of this forecast, KDSP II is supporting the National Treasury to develop a cutting-edge revenue forecasting tool. This tool is aimed at ensuring both the national and county government employ data driven evidence-based approach and avoid unrealistic revenue projections. This will enhance budget credibility and empower counties to optimise revenue collections through real time analytics and adaptive policy adjustments. Pending bills in counties is another key reform area. To implement this reform, the Office of the Controller of Budget is tasked with developing a Pending Bills Template. Under this template, counties are mandated to come up with time-bound clearance plans with measurable targets. This framework ensures systematic reduction of existing liabilities while enforcing fiscal discipline to prevent future accumulations. To strengthen management of the Human Resource functions in the public service, the programme is supporting the development of the Human Resource Information System-Kenya The Human Resource Information System-Kenya will integrate the human resource records and payroll. With a unified government payroll, the system will completely root out causes of ghost workers as all employees will have one unified personal number. Pension has been a recurring pain point for retired public sector workers in the national and county government. Through the Human Resource Information System-Kenya, all documentation required for pension payments will be uploaded on the system. This will eliminate the manual processes and human interventions that have been blamed for inefficiency and corruption in processing of pension for retirees. To address issues of ghost workers in counties, the State Department for Devolution in collaboration with the State Department for Public Service has developed guidelines on staff establishment, organisational structures and HR and Skills Audit. These guidelines will assist counties to determine the number of staff in each cadre and how to effectively conduct their HR and skills audit. To improve performance management, counties will be incentivised to undertake monitoring of performance contracts and cascading of the performance contracts to the lowest level. Strengthening oversight role of citizens on projects initiated by county governments is a key reform objective. Through establishment of community-driven project management committees, citizens will now oversee implementation of projects. The committees will ensure development projects implemented by counties reflect their needs and priorities, eliminating issue of 'white elephants' where projects are developed but not used by the intended recipient communities Climate change is an important reform component under the programme. All projects to be implemented by counties will be subjected to the screening tool. This initiative aims to integrate climate change considerations at all critical phases of the Project Investment Management cycle, helping counties to plan and implement projects that are better prepared for climate related risks. The programme has grants that counties can receive upon achieving reforms results. Institutional level 1 grants support county governments to undertake core institutional reforms in strengthening governance. Investment level 2 grant support counties in financing investments to improve service delivery. Through the conditional grants, successful counties will be financed to build infrastructure projects such as Level 4 hospitals, greatly boosting access to quality healthcare. For devolution to be effective, a sustained, deliberate and focused reforms programme is certain to address the catalogue of issues derailing service delivery in counties. Working closely with the leadership from both levels of government, the Second Kenya Devolution Support programme aims to transform devolution for years to come.

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