Find ways to reduce waste, counties told

 

Nairobi county governor Evans Kidero inspects a parade by City Council workers. Photo/FILE  Nation Media Group

By MWANIKI WAHOME 

County governments will be hard pressed to increase the current service charges and have been advised to come up with innovative ways to raise revenue from the private sector.

Economic think tank, Institute of Economic Affairs, says county officials should concentrate more on cutting wastage and corruption to have sufficient funds for development.

The counties are not likely to raise funds from external borrowing either as it process requires sovereign guarantee from the national government, which is unlikely to take the burden.

“There is expectation that taxes at the counties will be increased by between 50 and 75 per cent to raise revenue. There will be a lot of resistance to this and the counties need to find innovative ways, like improving efficiency and cutting on corruption, to reduce the current budget shortfalls,” said Mr David Owiro, IEA programme officer, regulation and competition policy.

He was speaking during a forum organised by the Kenya Association of Manufacturers on improving local governance through public-private participation.

Offshore sources

Owiro advised the counties not to rely on the fact that the constitution allows them to borrow from offshore sources, adding that the national government might be reluctant to take the risk through sovereign guarantee.

“The experience shows central governments are wary of offering sovereign guarantee. The legal framework is not there and the national government would not want to mortgage the country to fund one county,” he said.

The advice comes against the backdrop of the passing of county budgets that outline lavish spending on recurrent account estimated at 80 per cent on average.

The situation could starve the devolved units of development funds.

Mr Owiro said the counties should mobilise capital investment funds from the private sector, adding that counties should create a conducive environment for them.

Nairobi City County governor, Mr Evans Kidero, and his Kiambu County counterpart Mr William Kabogo said their counties are attracting manufacturers and franchises with major international companies setting up offices.

Mr Owiro said Kiambu should closely follow the happenings in Nairobi county to enable it be competitive in attracting investors.