Only three of Kenya’s 47 county governments achieved their own source revenue (OSR) targets in the 2022/23 fiscal year, according to the National Treasury’s Draft Budget Review and Outlook Paper. Lamu, Kirinyaga, and Kitui led the pack, collecting 119.8%, 112.3%, and 110.6% of their respective targets, while Samburu followed closely at 94.3%. Despite the overall shortfall, the counties collectively amassed Sh37.8 billion against a Sh57.4 billion target, indicating moderate improvement in local revenue collection.
The Treasury report highlights stark disparities in county performance, particularly among arid and semi-arid regions. Homabay, Narok, and Elgeyo Marakwet posted the fastest growth rates over the last two financial years, with OSR rising 128.5%, 122.5%, and 84.4% respectively. Conversely, counties such as Murang’a, Mandera, Marsabit, and Nyamira struggled to meet half their targets, citing weak revenue administration, leakages, and unrealistic targets as key challenges. Over the same period, Wajir, Busia, and Marsabit recorded significant declines in OSR collection, registering drops of 20%, 20.2%, and 25.5% respectively.
The report also underscores concerns over expenditure patterns, with total county spending at Sh428.9 billion, including Sh98 billion on development and Sh330.9 billion on recurrent costs, of which Sh195.1 billion went to wages. Treasury Cabinet Secretary Njuguna Ndung’u noted that 40 counties collected more than half of their annual OSR, but emphasized the need for stronger internal controls and improved revenue management systems. Looking ahead, county transfers are projected to take Sh444.8 billion in the 2024-25 budget, signaling continued reliance on national government support while counties strive to bolster self-generated revenue.