What you need to know:
- More than half of the counties collected less than 70 per cent of their projections.
- The report on counties’ budget implementation shows that Turkana’s own-source revenue (OSR) performance was the best in the year to June, at 113.5 per cent.
- Migori came in second with a performance of 110.5 per cent after collecting Sh387 million, up from its initial estimation of Sh350 million.
Only four counties surpassed their revenue targets in the financial year ended June 2022 as 10 others collected less than half of their initial targets, a report by Controller of Budget (COB) Margaret Nyakang’o has revealed.
The report on counties’ budget implementation shows that Turkana’s own-source revenue (OSR) performance was the best in the year to June, at 113.5 per cent.
In the budget, the county targeted Sh180 million, but by the end of June 2022, it had collected upwards of Sh204 million.
Migori came in second with a performance of 110.5 per cent after collecting Sh387 million, up from its initial estimation of Sh350 million.
Lamu and Vihiga closed the list of top four best performers in the OSR category, collecting Sh127 million and Sh236 million, translating into 105.8 and 101.6 per cent respectively.
“During the reporting period, county governments generated a total of Sh35.91 billion from their own-source revenue (OSR), which was 59.4 per cent of the annual target of Sh60.42 billion. This was an improvement compared to Sh34.44 billion generated in FY 2020/21,” the COB observed.
Counties have been struggling with their own collections, with each year witnessing many fall off target, an issue the COB has been raising concerns about, calling on them to make realistic projections during budget-making.
Less than projections
For instance, in the year under review, more than half of the counties collected less than 70 per cent of their projections.
Ten counties collected less than half of what they had estimated.
Only eight counties collected over 90 per cent of their revenue projections, with others being Baringo, Isiolo, Nyeri, and Siaya.
The office recommended that the counties collecting less than half of their projections build capacity to enhance their revenues.
“An analysis of own-source revenue as a proportion of the annual revenue target indicated that four counties achieved their set annual target: Turkana at 113.5 per cent, Migori at 110.5 per cent, Lamu at 105.5 per cent, and Vihiga at 101.6 per cent. Conversely, 10 counties recorded below 50 per cent performance, including Busia, Murang’a, Garissa, Kajiado, Embu, Kitui, Nairobi City, Nyandarua, and Bungoma,” the report stated.
The COB also complained about the low performance of OSR overall, saying “The under-performance of own-source revenue collection implies that some planned activities were not implemented during the financial year due to budget deficits.”
In 2020/21, only five counties met their revenue targets, leading to an under-collection of Sh19 billion. Treasury data submitted to Parliament shows that the 47 counties collected Sh34.4 billion in the financial year ended June 2021 against the target of Sh53.7 billion. The collection represented 64.1 per cent of the OSR target of Sh53.7 billion.
The Treasury estimates that counties can cumulatively raise Sh173 billion annually if revenue leakages can be sealed.