Kenya’s county governments generated Sh37.81 billion from their Own Sources of Revenue (OSR) in the Financial Year 2022/23, a 65.9 per cent of the annual target of Sh57.37 billion.
According to the Financial Year 2022/23 Annual County Budget Implementation Review Report (CBIRR), this was an improvement compared to Sh35.91 billion generated in the previous financial year.
Analysis of OSR by County indicates that Lamu, Kirinyaga, Kitui, Samburu, Turkana, and Elgeyo Marakwet Counties had the highest percentage of own revenue collected to the annual own revenue target at 119.8 per cent, 112.3 per cent, 110.6 per cent, 94.3 per cent, 89.8 per cent and 88.3 per cent respectively.
On the other hand, the Counties that generated the lowest percentage of OSR as a percentage of the annual target included Kisumu at 48.2 per cent, Wajir at 46.7 per cent, Mandera at 42.2 per cent, Murang’a at 42.2 per cent, Marsabit at 34.5 per cent, and Nyamira at 26.3 per cent
During the reporting period, the Controller of Budget authorised withdrawals of Sh430.48 billion from the respective County Revenue Funds (CRF) accounts to the County Operational Accounts for the County Governments, which consisted of Sh336.12 billion (78.1 per cent) for recurrent activities and Sh94.36 billion (21.9 per cent) for development activities.
During the year, the Counties spent a total of Sh428.90 billion, an absorption rate of 83.3 per cent of the total annual County government budgets. This expenditure consisted of Sh330.92 billion for recurrent activities (77.2 per cent) and Sh97.98 billion (22.8 per cent) for development activities.
The aggregate expenditure improved from an absorption rate of 74.8 per cent achieved in FY 2021/22 when the cumulative expenditure was Sh400.96 billion. The Counties that attained the highest aggregate absorption rates were West Pokot, Homa Bay, Mandera and Nandi at 95.4 per cent, 93.4 per cent, 93.2 per cent and 93.2 per cent, respectively.
On the other hand, Kilifi, Kisii, Kiambu and Nakuru recorded the lowest absorption rates at 72.8 per cent, 71.8 per cent, 67.2 per cent and 63.8 per cent, respectively. A further review of the total expenditure of Sh428.90 million indicates that Counties incurred Sh195.09 billion (45.5 per cent) on personnel emoluments and Sh135.83 billion (31.8 per cent) on operations and maintenance.
The development expenditure of Kshs.97.98 billion translated to an absorption rate of 61.0 per cent of the annual FY 2022/23 development budget, an improvement from 50.9 per cent recorded in FY 2021/22.
Analysis of development expenditure indicated that West Pokot, Mandera, Samburu, Kericho, Nandi and Homa Bay Counties had the highest absorption at 89.0 per cent, 85.3 per cent, 84.1 per cent, 83.4 per cent and 82.1 per cent, respectively.
Conversely, Counties that had the lowest absorption rate of their respective development budget were Machakos, Busia, Nakuru, Kiambu and Kisii at 42.5 per cent, 41.4 per cent, 36.1 per cent, 26.4 per cent and 13.9 per cent, respectively.
PENDING BILLS
As of 30th June 2023, county governments reported outstanding pending bills of Sh164.76 billion. Nairobi County had the highest pending bill which represented 65.1 per cent of the total county governments pending bills at Sh107.33 billion.
Other county governments with a high level of pending bills are Kiambu at Sh5.96 billion, Wajir at Sh5.51 billion, Mombasa at Sh4.29 billion, Muranga at Sh3.65 billion, and Mandera at Sh3.10 billion.
The high level of pending bills may be attributed to delays in disbursing the equitable share by the National Treasury, the change of county administrations and the requirement to undertake verification process of pending bills, untimely approval of supplementary budget to adopt prior-year pending bills in the current budget, political interference and refusal by successive governments to honour obligations.
