Only three counties in Kenya managed to meet their own source revenue (OSR) targets in the 2022/23 financial year, according to the Treasury’s Draft Budget Review and Outlook Paper. Lamu, Kirinyaga, and Kitui led the way, surpassing their targets with collections of 119.8%, 112.3%, and 110.6%, respectively. In contrast, Murang’a County recorded one of the lowest performances, achieving just 42.2% of its projected revenue, alongside Mandera and Nyamira. Overall, counties collected Sh37.8 billion against a target of Sh57.4 billion, representing 65.9% of the anticipated revenue.
The report highlights that, while some counties saw significant growth in OSR collection, many struggled due to structural and administrative challenges. For instance, Homa Bay and Narok counties recorded impressive increases of 235.2% and 129.4%, respectively, driven by improved collection mechanisms. The Treasury attributes poor performance in counties such as Murang’a, Marsabit, and Mandera to weak revenue administration structures, leakages, lack of internal controls, and, in some cases, unrealistic revenue targets. Over the last two years, Wajir, Busia, and Marsabit also recorded the largest declines in collections, further underscoring the uneven performance across the country.
The implications of underperformance are significant, as counties rely heavily on OSR to fund development projects and essential services. In Murang’a, the shortfall limits the county’s ability to expand health, education, and infrastructure programs, while better-performing counties can accelerate local development. Treasury officials have urged lagging counties to strengthen internal controls and modernize revenue systems, emphasizing that improved collection is vital for sustainable county-level growth. As counties prepare for the 2024/25 financial year, expectations are high that lessons learned will help boost collections and enhance service delivery nationwide.