Nakuru County Faces Revenue Shortfall and Underperformance in Development Projects – Budget Report Reveals
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Nakuru County’s financial performance for the fiscal year 2023/24 has been highlighted in a new budget implementation report, revealing key challenges in revenue collection and development expenditure.
The report, released by the Office of the Controller of Budget, outlines significant gaps in the county’s ability to meet its revenue targets and effectively utilize funds for critical infrastructure projects.
According to the report, Nakuru County’s total budget for FY 2023/24 stood at Kshs. 23.31 billion, a 9.9% increase from the previous year. Of this, Kshs. 9.68 billion was allocated for development projects, while Kshs. 13.63 billion was earmarked for recurrent expenses.
However, the report flags concerns over the county’s inability to fully execute its development agenda, citing an absorption rate of only 46% for development funds.
Revenue Performance Falls Short
Nakuru County collected Kshs. 3.32 billion in own-source revenue (OSR), which represents 81% of its projected target for the year. This shortfall contributed to a reliance on equitable share disbursements from the national government, which totaled Kshs. 12.51 billion. The underperformance in revenue collection is seen as a major obstacle to the county’s financial sustainability.
The report indicates that OSR, which includes income from the Facility Improvement Fund (FIF) and other local sources, remains insufficient to meet the county’s growing expenditure needs. This has raised concerns about the county’s ability to fully finance its future budgets without improving local revenue generation.
Development Projects Lagging
While Nakuru County allocated nearly Kshs. 10 billion for development projects, only Kshs. 4.45 billion was spent by the end of the financial year, representing less than half of the allocated funds. Key projects that are delayed include the construction of the County Treasury office, which has absorbed Kshs. 886 million so far but is only 87% complete. Renovation works at the iconic Afraha Stadium also faced delays, with Kshs. 165.1 million spent and 76% of the project completed.
The low absorption rate of development funds has raised concerns about the county’s infrastructure projects and overall service delivery. The Controller of Budget has urged the county government to prioritize the completion of these projects to improve its development record.
High Spending on Foreign Travel
The report also highlights questionable spending on foreign travel, with Nakuru County spending Kshs. 102.89 million on trips abroad.
Notable destinations included Australia and the United States, with travel expenses of Kshs. 1.79 million and Kshs. 1.67 million, respectively. The report flagged this as an area that requires scrutiny, recommending that the county redirect funds towards local capacity-building initiatives.
Pending Bills Still a Challenge
The county continues to struggle with high levels of pending bills, starting the fiscal year with Kshs. 1.62 billion in unpaid bills. Despite settling Kshs. 569.46 million during the year, Nakuru still has Kshs. 1.10 billion in unsettled liabilities. The Controller of Budget warns that the failure to clear these debts could undermine future financial planning.
The report urges Nakuru County to improve its own-source revenue collection and increase the absorption of development funds. Additionally, it recommends cutting down on foreign travel expenses and prioritizing the settlement of pending bills to avoid financial mismanagement.
With a knack for captivating storytelling, Amos Lumbasi has a talent for crafting narratives that resonate with readers. He combines meticulous research with a captivating writing style to create articles that are both informative and enjoyable to read.
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