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William Ruto weans off devolution even as report shows 'baby' still in diapers

President William Ruto when he tasked Safaricom, KCB & NCBA to form a loan scheme allowing SMEs to borrow at interest rates below 10 percent daily on September 28, 2022. [Wilberforce Okwiri, Standard] 

One of the noticeable changes in the proposed government structure is the de-elevation of the devolution function from a full ministry. The function does not further feature in any of the ministry’s title heads signifying that it may not be even a department in the official Executive Order that will define President Ruto’s organisation of government.

The current administration seems to be restoring the intergovernmental administrative structure by restituting the Summit to the Executive Office of the President and the Intergovernmental Relations Technical Committee (IGRTC) under the Deputy President’s office. Legally, the Summit is the apex formal forum that brings together the President and the 47 County Governors for purposes of consultation and coordination between the two levels of government. The IGRTC provides it with the secretariat with the President being the Chair or in his absence the Deputy President.

Section 9 of the Intergovernmental Relations Act (IRA) of 2012 exclusively provides that the Summit meets at least twice a year. However, the Kenyatta administration technically killed it by failure to convene such meetings. To the best of my recollections, the forum was only convened once or twice in the early days of the administration in the 2013/14 fiscal year. Since power abhors a vacuum, the Council of Governors (CoG) filled the gap and is presently the most visible forum both politically and in the court of public opinion.

Ambiguous legal standing

Contrary to this popular standing, the CoG has struggled with its legal identity within the corridors of law. Section 19 of the IRA establishes the Council, its leadership and functions. However, a Supreme Court ruling on Reference No. 2 of 2017, where the Council sought an advisory on its funding, the Court determined its locus standi to be ambiguous under the meaning of Article 260 and application of Article 163(6) of the Constitution.

According to the Court’s opinion, other than its establishment, the legal status of the Council has not been legislated upon. This view has been affirmed in other lower courts where the Council has appeared in a dispute or as an interested party. Politically, the Kenya Kwanza formation sought to control the Council by overwhelmingly supporting Kirinyaga Governor, Anne Waiguru, to be its chair. In the formation of their administration, the thinking seems to have shifted into strengthening the organs available to the President to foster healthy relations between the two levels of government.

Given this, three fundamental questions are open for debate. One, is the Ruto administration signaling the end of baby-sitting the counties financially and administratively? Two, after 10 years of existence, are there any counties that are fiscally sustainable on their own? Three, what must the citizens demand of the new County bosses as a minimum?

To find answers to these questions, we refer to the Controller of Budget (CoB) consolidated monitoring report on the performance of each county on revenues and budget implementation. The 2021/22 report completes the scorecard for the pioneer governors who have served two terms and the first term for those re-elected in 2022. Unfortunately, scanning through key indicators from the report inspires no confidence that any of the 47 counties can stand on her feet without the equitable share from the national government.

According to the report, the total available cash to the counties was Sh436.46 billion up to June 2022. Of this, Equitable share, Own-source revenues and Conditional grants from national government and development partners was Sh340.4, Sh35.91 and Sh12.01 billion respectively. The rest was from cash balances brought forward from the previous year. A total of 16 counties collected less that 60 per cent of their budgeted Own-source revenue with 10 of these falling below 50 per cent of their targets.

The worst performers in this category were Busia, Murang’a and Kajiado at 30, 32.9 and 33.1 per cents respectively. The rest were Garissa, Embu, Kitui, Nairobi, Nyandarua, Bungoma, Kisumu, Wajir, Meru, Nyamira, Narok, Kisii and Marsabit in that order. The most curious in the list are Nairobi and Kisumu being city counties. Nairobi had contracted the Kenya Revenue Authority to collect revenues for it. This suggests that KRA as a collector of revenues did not fare any better compared to previous years when county staff collected the revenues.

Only four counties exceeded their revenue targets. These include Turkana, Migori, Lamu and Vihiga collecting 113.5, 110.5, 105.8 and 101.6 per cents of their target respectively. Others that scored over 90 per cent are Siaya, Isiolo, Nyeri and Baringo.

On the expenditure analysis, the CoB authorised a total of Sh410.86 billion, with Sh94.7 billion going to development expenditure and Sh315.25 billion spent on recurrent. This translates to 23 and 77 per cents between development and recurrent respectively. These budget expenditures contravene the fiscal discipline requirement for a minimum of 30 per cent of public spending be on development under the Public Financial Management Act of 2012. Under this metric, 17 counties absorbed less than 50 per cent of their development budgets.  

The worst performers under this category were Garissa, Nairobi, Kisumu, Machakos, Taita Taveta, Narok, Vihiga, Busia, Kilifi, Mombasa, Turkana and Nyandarua with absorption rates of between 29.3 – 39.8 per cent in ascending order. Not surprisingly, the single largest expenditure item on average was on salaries at a total of Sh190.15 billion (or 47.4 per cent) of authorised expenditures. This is followed by operations and maintenance at Sh112.38 billion or 28 per cent of the authorised expenses.

More troubling however is the total accumulation of pending bills by the counties totaling at Sh153.02 billion as at the close of the fiscal year. Of this, the county executives account for Sh151.68 billion and the County Assemblies have Sh1.34 billion. Nairobi County alone accounts for Sh99.06 billion implying the county is technically insolvent. Other poor performers here are Mombasa and Kiambu counties with outstanding bills at Sh5.873 and Sh5.23 billion respectively. Mandera County is the only one that had no pending bills as per the report.   

Vision for Future

For avoidance of doubt, the nobility of devolution is without a doubt. There is evidence that good things have happened in many parts of the country courtesy of the devolved functions and funds. However, this must not blind the electorate to demand value for money from the trillions of shillings devolved to the counties over the past ten years. Having been in this space for the entire duration, I know for a fact a lot more could have been achieved with that money.

What is emerging is that many county bosses have this misconceived idea that counties are to perpetually rely on equitable share for their survival. On the contrary, our decentralised system of government envisioned counties as semi-autonomous economic units and not expenditure centres. It is unacceptable 10 years later and billions down the drain per county, that none of them can sustainably meet her recurrent expenses. This must be brought to a definitive end.

Going forward, I am of the considered view that a Governor’s performance must be measured based on clearly defined economic metrics and the impacts they have made to livelihoods for households in their local communities. We may also consider putting clear timelines within which each county must get out of dependency on equitable share to be considered as a viable independent county.