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How to unlock counties’ revenue independence
The Kimira Oluch Smallholder Farm Irrigation Project in Homa Bay County.
What you need to know:
- Accountability and transparency are critical to build a culture of trust.
- As an alternative source of revenue, counties should focus on resource mobilisation.
The devolved government system promised localised solutions and empowerment for counties. Yet, over a decade later, many counties remain heavily dependent on the national government. This reliance hampers development and stifles the true spirit of devolution. Counties must therefore take charge of their financial management and fully exploit the available revenue-generating opportunities.
Counties have the authority to collect revenues from various sources. These include property rates, entertainment taxes and service charges such as parking fees and business permits. But these devolved units are, however, doing poorly in terms of their revenues, mainly due to, among others, inefficiencies, outdated systems and limited capacity.
Reliance on the national government curtails counties’ capacity to effectively plan and implement their development goals. This is a situation that is obviously not sustainable and not in the spirit of devolution.
In the short-run, and from an economic point of view, counties that can generate substantial revenues will be better equipped to meet peoples’ needs, finance their projects, and avoid the disruptive delays caused by national funding.
Germany’s decentralised model demonstrates the transformative power of financial autonomy. Having empowered its states (known as länder) with the authority to manage their resources, the country has unlocked remarkable economic growth. For example, The Free s of Bavaria has excelled by tapping into its tourism and agricultural potential. Other states have excelled in manufacturing and innovation based on their strengths. Our counties in Kenya should adopt such specialisation and focus on their areas of strength.
Food security
The most important thing we can do as a country is to ensure our counties empower their people to achieve revenue independence. Without a doubt, a county’s most valuable resource is its people; therefore, their empowerment must come first.
Food security is a fundamental prerequisite for development. No region can thrive when its population is hungry and preoccupied with survival. Counties should invest in agriculture by providing farmers access to affordable inputs, irrigation services and infrastructure, and markets.
This will enhance food security, create employment, and boost revenues through value-added services and exports. Equally important is creating an enabling environment for business. Entrepreneurs and small businesses, often the backbone of local economies, need supportive policies to thrive.
As counties develop new and innovative ways to generate revenues, revenue loss avenues should be monitored and blocked. This will ensure that every shilling is collected and accounted for.
As an alternative source of revenue, counties should focus on resource mobilisation. Public-private partnerships can provide counties with opportunities to develop critical infrastructure and services while sharing financial risks. Investments in strategic sectors such as renewable energy, agro-processing and tourism can boost county revenues.
Accountability and transparency are critical to build a culture of trust. People are willing to pay taxes and fees when they see tangible benefits. Therefore, transparency must be prioritised, and schools, hospitals, and infrastructure must be improved.
Devolution was not intended to create dependency, it was meant to empower and uplift. Should our counties invest in their people, they can unlock the true potential of devolution. A county that feeds itself, empowers its businesses, and generates its own revenue is not just resilient—it is unstoppable.
Mr Njoroge is a development economist.
