Nairobi: Leaders from across Kenya’s governance and finance sectors convened at the 2nd Own Source Revenue (OSR) Growth Conference 2025 in Nairobi to explore innovative strategies aimed at enhancing county revenue collection for sustainable development. The conference, organized in partnership with the private sector, brought together key government officials, policymakers, and stakeholders in the devolution space and was officially launched by the State Department for Devolution Principal Secretary (PS), Ms. Teresia Mbaika.
According to Kenya News Agency, Ms. Mbaika re-affirmed President William Ruto’s commitment to enhancing county financial autonomy under the Bottom-Up Economic Transformation Agenda (BETA). She emphasized the importance of devolution in driving local economic growth but noted that counties need financial independence to reach their full potential. Most county budgets still depend heavily on Equitable Share transfers from the National government, making up about 80 percent of their revenue, while Own Source Revenue (OSR) contributes only 13 percent.
Ms. Mbaika highlighted a 2022 study by the Commission on Revenue Allocation (CRA) that found counties could generate up to Sh260.6 billion annually from sources such as land rates, business permits, parking fees, and market charges. However, revenue collection has been hampered by inefficiencies, unrealistic targets, and weak enforcement, with most counties collecting only 65 percent of their projected OSR.
She stressed the need to rethink revenue collection approaches, citing counties like Mombasa, Murang’a, Homa Bay, and Nakuru as examples of successful OSR growth through effective policies, digitization, and strategic enforcement. The conference aimed to highlight four key strategies to help counties improve revenue collection.
Counties were encouraged to automate revenue collection by adopting digital platforms and cashless payment systems to reduce leakages and improve efficiency. Strengthening enforcement and compliance was also urged to minimize revenue losses through clear policies and strict implementation. Setting realistic revenue targets was advised to align projections with actual collections, improving budget performance and reducing pending bills.
Ms. Mbaika stressed the importance of intergovernmental collaboration, urging counties to work closely with the National Treasury, CRA, KRA, and development partners to adopt best practices in revenue administration. She recalled that in the 2023/2024 Financial Year, counties collectively improved their OSR collections, achieving 72.8 percent of the Sh80.94 billion target. In the First Quarter of the 2024/2025 Financial Year, counties recorded Sh12.68 billion in collections, marking a 24 percent increase compared to the previous year.
Highlighting the importance of technology in boosting OSR, Ms. Mbaika pointed out that counties using technology were performing much better than those that were not, citing Homa Bay as an example. She noted that the national government is considering a unified revenue collection system that all counties can plug into, ensuring best practices are shared across all 47 counties.
Ms. Mbaika urged all County governments to embrace data-driven revenue forecasting to enhance predictability, improve budget discipline, and reduce pending bills. She stated that the State Department for Devolution was committed to creating strong policies and legal frameworks to enhance county financial autonomy. Collaboration is seen as key to unlocking the full revenue potential of counties, leading to better service delivery, economic growth, and improved livelihoods for Kenyans.
