Shining stars: 11 counties the hope for development spending

Eleven counties contributed to more than half of total development spending by all the 47 county governments, in the six months ending December 2023.

The 11 used a collective Sh12.5 billion on growth between July and December 2023, out of the total Sh24.8 billion that all devolved units used on growth, the latest Controller of Budget (COB) report shows.

The report lists Narok County as having spent the highest amount on development activities- in absolute terms- with spending of Sh2.39 billion in the six months. The spending alone surpassed combined development use by some 13 counties.

Narok was followed by Nakuru (Sh1.46 billion), Turkana (Sh1.28 billion), Kwale (Sh1.09 billion) and Kitui (Sh1.05 billion), the five emerging as the only ones to spend more than Sh1 billion on development during the period under review.

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“Counties with the highest proportion of development expenditure to the approved annual development budget were Narok at 52.4 per cent, Bomet at 27.1 per cent and Uasin Gishu at 27 per cent,” COB Margaret Nyakang’o reported.

To close the list of top 10 development spenders in absolute terms, Kilifi County also spent Sh940 million, Marsabit Sh937 million, Kakamega Sh873.5 million, Uasin Gishu Sh860.7 million and Kiambu Sh838.7 million.

The six-month development spending was, however, far off the target for the devolved units which originally planned to use Sh203 billion on development activities in the year ending June 2024.

“The county governments spent Sh24.81 billion on development activities, representing an absorption rate of 12.2 per cent of the annual development budget of Sh203.11 billion, which increased from an absorption rate of 6.9 per cent reported in the first half of FY 2022/23 when development expenditure was Sh11.66 billion,” the COB stated.

The poor performance was largely due to low spending by many counties, including some 13 that put less than Sh250 million each to fund all their development activities during the entire six months.

The bottom 10 counties spent a combined Sh1.6 billion on development during the six months, just about two-thirds of the Sh2.39 billion that Narok County spent.

With a spending of Sh101.6 million, Taita Taveta County pumped the lowest amount in development, followed by Elgeyo Marakwet which spent Sh130 million. Eight counties spent less than Sh200 million each on development activities and were the lowest development spenders, in absolute terms. Others were Samburu, Lamu, Kisii, Isiolo, Nyeri and Nyandarua.

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“The analysis of development expenditure shows that counties with the lowest absorption rates were Kisii at 2.9 per cent, Nairobi City at 3.3 per cent, and Machakos at 3.5 per cent,” the COB stated.

The poor spending on development activities occurred even as the COB raised alarm over Treasury’s delays to release monies to the counties, which affected their spending on development activities.

Failure to release funds

Out of the Sh385.42 billion equitable share budget for the 2023/24 financial year, Treasury had released 37 per cent (Sh142.47 billion) by end of December, when it ought to have released half of the money, the COB noted.

“Failure by the National Treasury to release funds to county governments affected budget implementation, as shown by low expenditure on development activities, which was Sh24.81 billion compared to the budget allocation of Sh203.11 billion as the available funds were committed to settling salaries and other essential expenditures,” Dr Nyakang’o said.

The concentration of good performance within a few counties was not only apparent in development spending since, as the COB report revealed, even on revenue collections at the county level five counties collected more than half of the Sh19.9 billion that all the 47 counties generated.

They collected Sh11 billion (55.5 per cent) of the total own source revenue (OSR) across the country, recording highest collections in absolute terms. They are Nairobi (Sh3.7 billion), Narok (Sh2.9 billion), Kiambu (Sh1.64 billion), Mombasa (Sh1.61 billion), and Nakuru (Sh1.2 billion).

“During the reporting period, county governments generated a total of Sh19.95 billion from their OSR, which was 24.9 per cent of the annual target of Sh80.20 billion. The realised OSR is an improvement compared to Sh13.11 billion generated in a similar period in FY 2022/23,” the COB stated.

In terms of OSR performance as compared to individual county targets, Nyeri, Narok and Isiolo counties achieved the highest prates at 71.4 per cent, 63.9 per cent and 62 per cent, respectively, the COB noted.

“Conversely, counties with the lowest proportion of own source revenue against targets were Kericho at 12.7 per cent, Kilifi at 10.5 per cent and Machakos at 7.4 per cent of the annual target,” Dr Nyakang’o said.

Among poorest performers on OSR collections- in absolute terms- is Tana River (Sh30.8 million), Wajir (Sh49 million), Mandera (Sh51 million), Marsabit (Sh60 million) and Bomet (Sh68 million).

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Collections by the 10 counties with poorest performance in absolute terms collected a combined Sh725 million, which was less than individual collections of the top five counties.

Nairobi’s collections were five times the combined collections of the 10 poorest performers, while Narok’s was four times.

“Only five counties achieved the target of 50 per cent namely; Samburu at 55.7 per cent, Elgeyo Marakwet at 56.3 per cent, Isiolo at 62 per cent, Narok at 63.9 per cent and Nyeri at 71.4 per cent,” the COB stated.

The COB is advising the counties to build the capacity of key staff involved in revenue collection to realise their OSR potential and warns them on over-reliance on heath facilities as a key source of own revenues.

“Many counties depended on FIF to prop their revenues, such as Elgeyo Marakwet at 79.6 per cent, Homa Bay at 78 per cent and Siaya at 75.7 per cent. In addition, several county governments are yet to develop their Facility Improvement Financing Regulations to regularise the spending of revenue receipts by health facilities at source,” the report observed.

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