Governance Frameworks and Revenue Enhancement in Devolved Governments in Kenya

Abstract

Revenue enhancement has been a challenge to the decentralized units since the introduction of the county governments in Kenya. This study was an attempt to evaluate the role that governance frameworks play in the enhancement of the county revenue collection ecosystem. The study aimed to understand and aid in the design of an effective revenue mobilization strategy informed by the existing best practices. The study was guided by the following specific objectives: To examine the influence of institutional capacity, policy implementation, regulatory frameworks and human capacity on revenue enhancement in the devolved governments. The research applied the correlation research design. The study sample was drawn from a representation of the present 47 counties in Kenya. The study sampled 5 counties representing 10% of the counties using a sample size of 439 respondents. Primary data was collected by the use of structured questionnaires. The collected data was analysed using Statistical Package for Social Sciences (SPSS) version 22. The study results showed that counties are striving to have in place adequate institutional capacity for revenue collection and strengthening of the existing institutions through automation as a means to increase revenue collection in the counties. The research also indicated that human capacity was inadequate within the counties and this had a negative influence on revenue enhancement. Revenue can be optimized only when county staffs have the requisite skills and reasonable educational backgrounds that matched their job descriptions. On policy implementation, the study revealed high scores on the levels of formulation and implementation of policies in the devolved governments. Further, the study has indicated that strong citizen participation and continuous staff training enhance county revenue. On regulatory frameworks, the study established a positive contribution towards county revenue enhancement, especially where adequate regulatory mechanisms exist such as code of ethics to deal with corruption and cartels in the county. The variable regulatory frameworks had the strongest linear relationship while policy implementation had the weakest. The study therefore recommends that County Government should majorly focus on the implementation of the existing regulatory frameworks so as to operationalize them rather than just establishing numerous policies on revenue collection. The study then suggests further research on the existing integrated financial management systems as implemented and adopted by the county government to guide revenue collection since it does address the management issues that come with local revenue collections against institutional set standards for revenue collection modules. The findings is of benefit to national government in familiarizing themselves with the roles of county governments in enacting effective and efficient strategies to be applied in revenue collection optimisation.