Kilifi County is facing a persistent challenge in meeting its own-source revenue (OSR) targets, a problem that has had serious repercussions on the county’s ability to fund essential services and development projects.

For several years, the county has set ambitious revenue targets that it has consistently failed to meet.

According to reports from the office of the Controller of Budget (COB), in the 2021/22 financial year, Kilifi aimed to collect Ksh 1.1 billion but only managed Ksh 827 million, representing 75% of the target.

The situation worsened in 2022/23 financial year when the county set a target of Ksh 1 billion but collected just Ksh 661 million, achieving only 63% of the goal.

Out of the Kshs.1.6 billion target, Kshs.554 million (34 %) was collected as of 9 months of the 2023/24 budget implementation.

These consistent unmet revenue targets have sparked a debate about whether Kilifi’s revenue projections are realistic or if there are more systemic problems in the county’s revenue collection mechanisms.

Kilifi governor Gideon Mung’aro blamed the shortfall on cartels using manual revenue collection systems in the revenue collection department.

He reaffirmed his commitment to automate all the 13 revenue streams.

“There are so many loopholes in our revenue collection system and we are working towards addressing that. We are automating our services so that everything we do is cashless. We are coming from a system where a revenue officer collects money and at the end of the day he decides what to bank and what to take home. Soon every service in Kilifi will be automated,” he said

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The county has already automated the cess and parking revenue streams.

“It’s not that Kilifi does not have money. When you pay by cash the county gets only a quarter of the cash and the collectors get three quarters. You can see we have made positive strides just by automating the two streams what if we automate all the 13 streams?” said the governor

He expressed optimism that with the automation the county will be able to collect more than Ksh 3 billion.

Kenya Human Rights Commission (KHCR) in a report highlighted the inefficiency of the county’s revenue collection mechanisms as one of the major contributing factors to the revenue collection shortfalls.

“Kilifi relies heavily on traditional sources of revenue such as property taxes, business licenses, and market fees, but the collection processes for these revenues are fraught with challenges. Many markets and businesses operate informally, making it difficult for the county to track and collect revenues,” read the Kilifi county budget analysis report.

The report dubbed, trends in pro-poor sectors allocation and spending, a case for Kilifi County also sights the use of outdated, manual systems for revenue collection leaving room for leakages and corruption.

“The county needs to modernize its revenue collection systems, including fully automating the process to reduce loopholes. We have seen an increase in revenue collection but there is room for improvement,” said Eric Mgoja from the Kilifi budget hub.

The failure to meet revenue targets has had a ripple effect on the county’s operations.

The unmet targets result in budget shortfalls which directly affects implementation of projects

Delayed and reduced funding for development projects has led to postponed or stalled projects across various sectors.

For example, some roads in the county that were earmarked for repair have seen little to no progress, leaving them in a state of disrepair.

This has particularly affected small-scale farmers, who rely on these roads to transport their produce to markets.

“The road to our village is almost impassable, especially during the rainy season. It’s a real struggle to get our goods to the market,” says John Chengo, a farmer from Chodari in Kilifi South.

There have also been discussions about introducing new forms of taxation, such as levies on tourism activities and fish processing plants, to boost revenue.

However, critics argue that the county needs to first address the inefficiencies in its current revenue collection systems before looking for new revenue streams.

Civil society organizations have called for transparency and accountability in how the county manages its finances, particularly in ensuring that the money collected is used effectively to fund critical services and projects.

Recently, the governor issued an order to close all cess station by 6pm to curb corruption especially during the night but he lifted the order after transporters protested the move.

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