Restrictions imposed to curb the spread of Covid-19 continue to hurt businesses where counties normally rake in billions from rates and cess in the first quarter of the financial year.
The Controller of Budget’s County Budget Implementation Review Report for the period between July and September 2020 indicates that the revenue collection shortfalls slowed implementation of the regional governments’ programmes.
It shows that counties only managed to generate Sh5.85 billion, just 11 per cent of the annual target of Sh53.02 billion. The amount collected was a decrease compared to the Sh7.71 billion generated over a similar period in FY2019/20.
Counties earn money from land rates, market and trade licensing fees, parking fees, liquor licensing, entertainment and cess, among others. In the July-September period, the dusk-to-dawn curfew and closure of some businesses greatly reduced business activities across the country.
The directives forced some businesses to close while others reduced operating hours, limiting counties’ revenue sources.
An analysis of own-source revenue as a proportion of the annual targets indicates that Tana River, Kirinyaga, and Migori counties achieved the highest proportions at 26.2 per cent, 23 per cent, and 20.6 per cent respectively.
And counties that recorded the lowest proportion of own-source revenue against annual targets were Nandi at 1.1 per cent, Samburu at 2.9 per cent, and Homa Bay at 3.9 per cent.
In Baringo, Sh50 million was collected in the period under review. In Homa Bay where the county generated only Sh15 million, the report attributes the low amount to closure of businesses. And in Nandi, the county gave a waiver on parking fees, while in Narok and Samburu, global travel restrictions meant their economic mainstay of tourism took a hit.
Additionally, the report blamed a delay in approval of the FY2020/21 budget estimates in Mandera, Uasin Gishu, Tana River, Kirinyaga, Nakuru, Wajir and Kitui, which affected the release of funds. The stalemate in the approval of budgets was mainly due to frosty relationships between the executive and the assemblies. It was also attributed to lack of understanding of the roles of the two arms of government in the budget making process.
“We recommend that the Ministry of Devolution, and Semi-Arid Lands through the Intergovernmental Relations Technical Committee should come up with strategies to address the relationship issues between the executive and assemblies,” Dr Nyakang’o recommended in her report.
The document also singles out some counties for delays in the submission of quarterly financial and non-financial reports by their treasury departments, while others submitted incomplete reports.
