Nairobi's internal revenue collection hits Sh9.4bn despite falling short of target

Nairobi County has recorded a Sh9.4 billion in its internal revenue collection for the first nine months of this financial year 2023-2024.

Data from the Revenue and Expenditure for the period ended March 31, 2024 report shows that the revenue collected was from July to March 31, 2023.

"In the nine months of FY 2023-24, the county received Sh13.347 billion as the equitable share of the revenue raised nationally, Sh6.5 million from Grants, had a cash balance of Sh1.21 billion from FY 2022-23, and raised Sh9.340 billion as own-source revenue. The total funds available for budget implementation during the period amounted to Sh23.998 billion," reads the report.

Looking at the last nine months, land rates recorded the highest collection of Sh2.6 billion, Single Business Permit (Sh1.8 billion), parking fees (Sh1.5 billion), building permits (Sh917.6 million), billboard and adverts (Sh471.9 million) while Sh158.4 million was collected from markets.

For fire services, Sh53.7 million was collected between July 2023 and March 31, 2024, house rents (Sh367.2 million), food handlers certificate (Sh76.4 million), liquor licenses (Sh198.3 million), from hospitals and city mortuary (Nairobi funeral home) Sh560.3 million was collected while other incomes had a collection of Sh727.7 million.

Targets

With the annual target being Sh19.9 billion the county has a deficit of Sh10.5 billion which means the county will not meet its target.

For its own source revenue, City Hall had set the following target for its own source revenue streams.

Nairobi Governor Johnson Sakaja when he chaired the Nairobi County Executive Committee on May 7, 2024. (Photo: X/Johnson Sakaja)

For land rates, Nairobi projected to collect Sh7 billion, Single Business Permits (Sh3 billion), parking fees (Sh3 billion), Building permits (Sh1.9 billion), billboard and adverts (Sh1.2 billion) while Sh560 million was to be collected from markets.

For fire services, Sh453 million was to be collected, house rents (Sh605.4 million), food handlers certificate (Sh300 million), liquor licenses (Sh300 million), from hospitals and city mortuary (Nairobi funeral home) Sh270 million was to be collected while other incomes were to be at Sh1.4 billion.

Nairobi County Chief Officer in charge of Revenue Administration, Wilson Gakuya said that while it is obvious the county will not hit its target, the collection will be the highest ever since devolution.

During an interview with The Eastleigh Voice, the Chief Officer noted that when the month of June had started, the revenue had already hit Sh12 billion.

"We are already at about Sh12 billion with a few days left in the month. The worst case scenario is that we will surpass the highest target during Governor Evans Kidero's time of Sh12 billion and be able to collect Sh13 billion," Gakuya explained.

Nairobi County Chief Officer in charge of Revenue Administration, Wilson Gakuya during an interview with The Eastleigh Voice at City Hall on June 6, 2024. (Photo: Maureen Kinyanjui)

In the last FY 2022-23, Nairobi's own source revenue hit Sh10.6 billion.

Despite being way below the target of Sh18.2 billion, it was the highest achieved by City Hall in the last five years.

Explaining why the own source revenue collection will surpass last year, the chief officer stated that the county has put in place several structures to boost its collection.

"The introduction of the Unified Business Permit (UBP), which was meant to consolidate licenses, has borne fruit as residents can now pay their rates without having to wait as long as before," Gakuya said.

Beginning January 1, 2024, City Hall activated the electronic Unified Business Permit regime, as part of an ease-of-doing business reform initiative.

The UBP combines the business, fire, food, health, and advertising licenses into one, and will be available on the Nairobi City County Government's NairobiPay Revenue service online portal.

The activation of the UBP regime eliminates the issuance of multiple licenses.

Automation and sensitisation are also among the structures City Hall has put in place to boost revenue collection.

Almost 135 revenue streams have been automated with City Hall having a "no cash policy".

Nairobi Governor Johnson Sakaja interacts with a shop attendant at a shop in the Nairobi CBD on October 27, 2023. (Photo: NCCG)

To facilitate payments, residents are encouraged to use the code *647#, directing funds to either Co-operative Bank (account name - Nairobi City County Revenue Collection; account number - 01141709410000) or Equity Bank (account name - Nairobi City County Revenue Collection, account number - 1770279910476).

"The automation has helped us reduce human interaction. With our revenue collection system, we have automated almost all the revenue streams and this has boosted transparency and sealed corruption loopholes," Gakuya added.

The Chief officer also attributed the success to the revenue collection system known as the Nairobi Revenue System (NRS), developed by the government which has been in use since the defunct Nairobi Metropolitan Services (NMS).

Gakuya said that the system was efficient, hence the improvement seen in revenue collection at the moment.

Nairobi has been falling short of its revenue target since it came into existence in 2013 despite the digitisation of 136 of its revenue streams.

This has been blamed on unreliable rates, low collection from single business permits, and inefficient collection of parking fees.

The highest amount ever collected was Sh11.71 billion in 2015-16 which was still short of the Sh15.3 billion target.

The lowest was collected in FY 2019-20 at Sh8.5 billion which was half of the targeted Sh17.31 billion.