County Governments’ Sources of Revenue: a Legal Perspective on How the County Governments Are Funded

Abstract

The promulgation of the new Constitution in 2010 and the subsequent General Elections held in 2013 saw the establishment and commencement of operations of the 47 new County Governments. This was in line with the concept of devolution which was firmly anchored in the new Constitution. The previous constitution lacked principles to guide equitable division of national resources, and consisted of highly centralized structures which concentrated power under the executive arm of the government. The legislature hardly had a say in governance matters. This led to regional imbalances as some regions were favored while others were marginalized and lagged behind in terms of development. Although there were some efforts undertaken by the government to decentralize revenue (e.g. CDF, LATF, RMLF, CBF etc.), these programs suffered largely due to lack of adequate funding and corruption. The new Constitution therefore was much welcome remedy to correct these previous abuses by the central government. Not only does it entrench devolution, it also dedicates an entire chapter that governs the management of public finance. This study looks at County Governments’ sources of revenue and the challenges thereon by reviewing and appraising the legal framework governing revenue allocation in Kenya under the new Constitution. The study highlights the significant provisions of the laws, critiques the legal framework and draws lessons from another jurisdiction in equitable distribution of national resources in devolved governance. In conclusion, the study makes suggestions on the way forward to ensure that the legal framework remains effective in ensuring equitable distribution of resources