Counties warned over dependence on Treasury amid untapped income streams
Nyakang’o said the persistent neglect of these streams has left most counties vulnerable to salary delays and service disruptions whenever Treasury disbursements are late.
The Controller of Budget (CoB), Margaret Nyakang’o, has slammed counties for heavily relying on Treasury for funding critical services while ignoring potential income avenues like quarry royalties, fish landing sites and solid waste management.
In her report for the 2024/25 financial year, Nyakang’o said the persistent neglect of these streams has left most counties vulnerable to salary delays and service disruptions whenever Treasury disbursements are late.
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She highlighted that most counties continue to depend on a handful of traditional revenue sources like parking fees, business permits, market rates and land rates, while leaving vast opportunities untapped.
“Potential local levies on emerging economic activities, such as regional tourism, fish landing sites, mining, and solid waste management, remain under-exploited. These counties include Turkana, Baringo and West Pokot,” Nyakang’o said in her review of county budget performance.
She highlighted natural resource cess, quarry royalties, tourism activities and solid waste management as areas that could significantly boost collections if fully utilised.
She also pointed out that outdated valuation rolls have reduced the potential for land rate collections, further limiting local revenue growth.
Counties collectively raised Sh67.3 billion in own-source revenue (OSR) against a target of Sh87.67 billion for the year ended June 2025. Only 12 counties met or exceeded their targets during the period.
Turkana County had projected to collect Sh241 million but realised Sh171.14 million. Baringo raised Sh250.26 million against a target of Sh380.1 million, while West Pokot collected Sh85.67 million, falling short of its Sh97.2 million goal.
“CRA’s (Commission on Revenue Allocation) studies highlight that most counties rely heavily on a few traditional revenue streams such as property rates, single business permits, market fees and parking fees. At the same time, substantial opportunities in other areas remain largely untapped,” Nyakang’o added.
CRA’s research indicates that counties have the potential to generate up to Sh250 billion annually from OSR, meaning current collections are just over a quarter of what is possible.
Weak OSR performance has repeatedly left counties exposed, resulting in near-paralysis of key services such as healthcare and delays in salary payments whenever Treasury releases are delayed. In the current 2025/26 financial year, several counties are yet to pay staff salaries for August due to late equitable share disbursements.
Nyakang’o blamed lack of innovation, outdated valuation rolls and slow adoption of modern revenue administration methods as key obstacles preventing counties from maximising their OSR collections.
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