Internal Determinants in County Government Fiscal Sustainability in Kenya: the Case of Narok and Nairobi City Counties (2013-2016)
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Date
2020Author
Kiplangat, Patrick B
Type
ThesisLanguage
enMetadata
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This study was concerned with internal determinants in county government fiscal sustainability
in Kenya between 2013 and 2016. The first three fiscal years since the inception of devolved
governance in March 2013 witnessed county governments struggle to meet their financial obligation
and this catapulted them from one crisis to another leading to calls for more resources while
at the same time calls for prudent fiscal management. The study’s objectives included investigating
the influence of county fiscal strategy on fiscal sustainability, determining the effect of nonadherence
to fiscal responsibility laws on county fiscal sustainability, and ascertaining the influence
of revenue capacity on county fiscal sustainability in Kenya.
The study found that majority of respondents concur that Nairobi City and Narok county governments
face challenges including weak fiscal strategies, revenue inadequacy, inherent narrow
revenue bases, unpredictable revenue allocation, lack of diversification of its revenue sources,
and inflation of its recurrent expenditures all affecting their fiscal strategy. Secondly, the two
county governments neither do not observe tax and expenditure limits from the Controller of
Budget, do not adhere to balanced budget rules/requirement, lack fiscal discipline incentives in
their revenue allocation, and a proper debt management plans. Lastly, the two county governments
utilize antiquated local revenue collection measures, face higher vertical revenue gaps, do
not promote accountability and transparency in fiscal management, and thus haplessly weak in
revenue capacity. A few respondents believed the nascent devolved units require time to
strengthen their fiscal capacities/strategies and compliance as all devolved functions were transferred
to them with a bang by the Transition Authority.
Based on the findings, the study recommends that fiscal strategies be entrenched in all departments
and with all the stakeholders. There is need for county government to totally adhere to fiscal
responsibility laws as dictated by PFM Act 2012 and finally, Finally, county governments are
urged to enhance revenue capacity by enhancing revenue collection measures, prudently managing
intergovernmental transfers in service provision, embrace transparency and accountability,
embracing IT in tax collection, properly prioritize spending needs, and enhance fiscal wealth to
help cover government fiscal imbalances, and supplement the lowly performing local own source
revenues.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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