The Nature of Local Revenue Decisions within the Decentralized Structures in Kenya
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Date
2022-02
Authors
Rutto, Andrew
Minja, David
Kosimbei, George
Journal Title
Journal ISSN
Volume Title
Publisher
THE INTERNATIONAL JOURNAL OF HUMANITIES & SOCIAL STUDIES
Abstract
Fiscal decentralization is widely recognized to bring leaders and decisions makers closer to the citizens resulting in
better delivery of public services. Underperformance in the revenue collection has a significant effect on the ability of
the sub-national governments (SNGs) to deliver services to its citizens. Due to these challenges, this study sought to
examine the state of the local revenue decisions among sub-national(county) governments with a focus on Kiambu,
Vihiga and Baringo Counties in Kenya. The study was descriptive in nature and used interviews with purposefully
directors from budget, finance and planning departments and secondary data collected from Commission on Revenue
Allocation (CRA) and Kenya National Bureau of Statistics (KNBS). Data obtained was analyzed thematically and
descriptively. The analysis shows that the revenue collection by the SNGs in Kenya have increased marginally since the
establishment of the devolved structures but have stagnated when they are adjusted for inflation. The revenue
collection figures of the SNGs are underperforming and are drawn from a relatively small base. User charges, business
licenses and property tax are the main revenue bases contributing about 86 per cent with user fees contributing more
than half of the revenues. The effective own source revenue (OSR) to budget funding indicates that six counties can
fulfil the requirements for devolution of at least 10 per cent effective OSR to budget. This scenario impeded the
attainment of the objectives of devolution and increases dependence on fiscal transfers. The study recommends the
following; the county governments should give realizable estimates of local revenues, improve on the management and
control of the current revenue bases and lastly integrate new revenue bases. The study contributes to the existing
knowledge by delving more into the elements of revenue decentralization and recommends further studies on how
other elements of revenue decentralization impact the performance of the subnational governments in sub-Saharan
Africa
Description
research article
Keywords
County governments, decentralization, local governments, local revenue decisions, sub national government (SNGs)
Citation
Rutto, A., Minja, D., & Kosimbei, G. (2022). The Nature of Local Revenue Decisions within the Decentralized Structures in Kenya. The International Journal of Humanities & Social Studies, 10(2).