Kenya’s Deputy President William Ruto claimed that only 22 out of Kenya’s 47 counties met at least 60% their revenue targets in the four years since they were established.
Mr Ruto made this claim in his closing remarks at the 5th Devolution Conference in Kakamega County, citing the under-performance in revenue collection by the counties as a major challenge to devolution in Kenya.
The second significant challenge relates to the under-performance in local revenue collection. Less than half of all our counties, in fact only 22, attained the average of 60 per cent or above of their four-year local revenue targets — William Ruto, Deputy President of Kenya
A previous check by PesaCheck on how well the counties are doing in terms of revenue collection found that only two — Marsabit and Turkana — met their local revenue collection targets in the 2016/17 financial year, according to the Controller of Budget’s annual county budget implementation review report for 2016.
So the question is, have only 22 counties manage to raise at least 60% of their revenue targets since they were established in 2013?
PesaCheck has investigated the Deputy President’s claim that only 22 counties attained the average of 60 per cent or above of their four-year local revenue targets and finds it to be TRUE based on the following facts:
Local revenue for county governments in Kenya comes from a number of sources, such as taxes, levies, rents, fines, forfeitures, rates — both direct and indirect, business permit and license fees, parking fees and cess.
Article 209 of the Constitution grants county governments the authority to impose these charges, and any other taxes and levies specified in an Act of Parliament.
The claim by the Deputy President created some confusion because counties have annual local (own source) revenue targets. They do not have “four-year revenue targets”. What it could mean though is that the counties planned to collect a certain amount of revenue in total over 4 years, but collected a different amount in the same period, and the latter amount in comparison to the former should be 60 per cent or more for 22 counties and less for the other counties.
Using this approach, we added the total local revenue collected by each county over the last four financial years (2013/14–2016/17) and divided it by the total local revenue targets for each county over the same period. Then we multiplied by 100 to get the performance (in percentage) of local revenue against the local revenue target in the last four years as shown in this table.
The data is extracted from the annual county budget implementation reports(or fourth quarter reports) by the controller of budget.
From the table, we can see that only 22 counties raised at least 60% of their local revenue targets in the four years since they were established, meaning that the Deputy President’s claim is TRUE.
However, when we look at which individual counties collected revenue above 60 per cent of their annual targets continuously in each of the four financial years, only seven counties — Kericho, Marsabit, Homa Bay, Bomet, Nyandarua, Baringo and Laikipia — met this target. Of these, only Marsabit has fully met its target, surpassing it by 13%.
This approach considers the annual change in revenue collection against revenue targets and is more likely to show the variability that actually happens each year.
There have also been concerns that the county governments are becoming increasingly reliant on the national government to finance their budgets due to inability to meet local revenue targets.
In a fact check on the amount of revenue that counties collect locally, PesaCheck found out that while the local revenue collected by counties is increasing, the share of county revenue in relation to total revenue is going down.
This is because the county equitable share (money coming from the national transfers) is increasing faster than the counties’ own revenue, meaning that counties are becoming more dependent on the money received from the national government than on the revenue they collect locally as a share of their total resources.
Therefore, the claim by deputy president William Ruto that only 22 counties achieved their local revenue targets over the past four years is TRUE.