Urban development in Kenya:financing the delivery of services

Abstract

An efficient urban system will help increase productivity in both urban centers and rural areas. Factors which positively affect the provision of efficient urban services are fundamental to a nation's overall development strategy. In Kenya, the growth in demand for services in urban centers has out-paced the growth in resources for providing services. To meet the increased demand, more funds and improved efficiency are necessary. The current budgeting system for Local Authorities was designed primarily for accounting purposes with a strong emphasis on ensuring financial and audit compliance. The system is not very useful as a management tool for assessing the sufficiency or efficiency of the services provided. Thus, a new system is proposed which would monitor the effectiveness of urban service provision. Measures would include costs, productivity, adequacy and efficiency of activities. The data collected under the new system will enable Local Authorities to manage the delivery of urban services more effectively. Critical activities can be identified for future development. Data on performance and deficiencies can be used to negotiate with the Central Government to enlarge the tax-base.