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Banners depicting the various county governments on display at the Eldoret Sports Club in Uasin Gishu County during the devolution conference on August 16, 2023.
| Jared Nyataya | Nation Media GroupCounties
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Devolution: Kenya’s Sh3.6trn stolen dream
Devolution, Kenya's great dream that has seen Sh3.62 trillion pumped into 47 counties over the past 10 years, now appears to have been hijacked, with governors turning devolved units into corruption citadels and mini-employment bureaus at the expense of the development the 2010 Constitution hoped it would inspire at the lowest, marginalised levels.
Ditched in a post-independence plan when Kenya abolished its first Senate and majimbo (regionalism) system, devolution was reintroduced by the 2010 Constitution, which created 47 semi-autonomous governments with 14 broad functions.
However, the big dream of the framers of the Constitution to decentralise services to the people has turned into devolved corruption with billions of shillings meant for development diverted to line the pockets of county officials and well-connected individuals, leading to the birth of instant village millionaires. Four former governors, some together with their children, are battling graft cases.
Former Migori governor Okoth Obado is facing two cases in the High Court over more than Sh1.9 billion allegedly obtained through fictitious procurement contracts for him, his children and several contractors.
Former Nairobi governor Mike Sonko is alleged to have embezzled more than Sh300 million partly through the irregular awarding of contracts to friends’ companies that are alleged to have wired money to his personal accounts after receiving payments from the county.
Ex-Kiambu governor Ferdinand Waititu is also facing the same predicament with a Sh588 million graft case hanging on his neck. He is facing trial, alongside his wife Susan Ndung’u and his trading company Saika Two Estate Limited, over the alleged irregular award of a road construction tender to a company that then allegedly wired some part of the money back to the governor.
Former Nairobi governor Evans Kidero is also facing a Sh213 million graft case where money was channelled through two companies which had allegedly tendered to supply goods to City Hall and eventually into Dr Kidero’s personal accounts at Family Bank.
The 4th annual devolution conference report indicated that the Ethics and Anti-Corruption Commission (EACC) was handling 200 reported cases of corruption in counties with two governors awaiting rulings and six county secretaries and three county assembly speakers under investigation. In addition, EACC had traced and recovered assets worth Sh700 million in the last one year and assets worth Sh1.6 billion frozen and 174 civil suits pending in court for recovery of illegally acquired assets totalling Sh3 billion. In May 2023, an anti-corruption court in Nairobi froze assets belonging to a City Hall employee over Sh537 million unexplained wealth.
The employee, a junior procurement staff earning a Sh21,000 net monthly salary or 53,685 gross, acquired the millions within eight years between January 2014 and June 2022.
Another senior official in Nairobi, Jimmy Kiamba, also had his accounts frozen over alleged graft. Mr Kiamba had joined City Hall in 2007 on a monthly salary of Sh85,000 and worth Sh1 million but, by 2013, he was worth Sh401 million.
According to EACC, Mr Kiamba banked Sh400 million in eight of his bank accounts between January and November 2014 and had banked at least Sh1.5 billion between 2007 and 2014.
The two examples are not isolated cases but a worrying trend.
Reports by the office of the Auditor-General have raised the red flag on corruption and misuse of funds in devolved units.
According to the Commission on Revenue Allocation (CRA), since 2013 to present, county governments have collectively received Sh3.62 trillion.
This comprises Sh2.946 trillion as equitable share; Sh148 billion national government conditional grants and Sh220 billion loans and grants from development partners. County governments have also collected their own revenue amounting to Sh306 billion.
As of the financial year ended June 2022, the devolved units had spent Sh2.904 trillion for both recurrent and development expenditure. Of this, 1.21 trillion has been spent on personal emoluments such as salaries, wages and allowances on the 217,300 county government employees as at 2022.
Salaries gobble up over 41 per cent of county budgets, with some spending up to 62 per cent, violating the Public Finance Management (County Governments) Regulations, 2015, which caps the wage bill at not more than 35 per cent of the budget.
The number of those employed has been on a steady increase from 94,700 in 2013 to 217,300 as at 2022 despite various warnings by the Auditor-General and the Controller of Budget on counties’ increasing wage bill.
Controller of Budget (CoB) Margaret Nyakang’o pointed out that, in the financial year ended June 2022, counties spent Sh190.11 billion on wages, which was 43.6 per cent of the realised revenue of Sh427.47 billion. From her report, only Mandera, Tana River, Isiolo and Kwale were within the ceiling.
Dr Nyakang’o reported that there was low expenditure on the development budget, saying that in the last five years, county governments spent 26.5 per cent of their total revenue on development programmes.
She argued that this indicated that counties did not prioritise development projects.
Section 107(2) (b) of the PFM Act provides that, over the medium term, a minimum of 30 per cent of county budgets should be spent on development programmes.
During the sixth devolution conference in Kirinyaga County in 2019, former President Uhuru Kenyatta slammed governors for spending county funds on salaries and personal benefits at the expense of development.
“In the fiscal year ended June 2018, our county governments spent approximately 87.3 per cent of their entire budgets on recurrent expenditure. This left only a meagre 12.7 per cent for development,” said Mr Kenyatta.
But even with the development activities getting little budgetary allocation, not all allocated money is spent by the devolved units.
In the financial year ended June 2022, Dr Nyakang’o said counties spent Sh98.47 billion, representing an absorption rate of 50.9 per cent of the cumulative annual development expenditure budget of Sh193.53 billion.
“County governments should prioritise and ensure that expenditure on development activities meets the minimum set ceiling of 30 per cent of their budgets,” said Dr Nyakang’o.
However, a year later, the trend continued with the County Government’s Budget Implementation Review Report for the first quarter of the financial year ended June 2023 by the CoB revealing that at least 20 counties did not report any expenditure on development activities.
During the period under review, counties reported expenditures of Sh2.22 billion towards development activities from a cumulative annual development budget of Sh160.58 billion.
According to the Salaries and Remuneration Commission’s first quarter report for financial year ended June 2023, the county government wage bill increased to Sh50.82 billion from Sh38.15 billion during a similar period in the previous financial year. The report said personal emoluments as a share of the total revenue ratio stood at 79.5 per cent. In spite of this, governors have continued to push for an increase of the revenue to counties to 35 per cent of the total revenue raised nationally. In the just-ended financial year, counties received Sh370 billion accounting for 18.2 per cent of national revenue. This amount will increase by Sh15 billion in the current financial year ending June 2024.
County governments are guaranteed an allocation of at least 15 per cent of the nationally generated revenues.
Mr Eugene Wamalwa, a former Devolution Cabinet Secretary, said that, even though devolution has had its successes, the intention of the Constitution has not been realised.
“To me, the biggest enemy of and threat to devolution is corruption. Unless something is done, the objectives of devolution under Article 174 will not be realised. For devolution to succeed, the dragon of corruption must be dealt with,” said Mr Wamalwa.
Several audit reports by different organisations have painted a grim picture on the sad state of affairs in the devolved units.
A report released last year by the Institute of Certified Public Accountants of Kenya (ICPAK) dubbed “Readability and Understandability of Financial Statements in Kenya”, showed that only three counties have ever received clean audits.
“Most audits from counties have exposed massive misappropriation of resources and blatant corruption. It’s sad that most of those implicated have never been held accountable,” ICPAK chairman George Mukua said.
Makueni, Nyandarua and Kericho received a clean bill of health in the financial years ended June 2018 and 2019, respectively.
A 2015 report by the EACC — Corruption and Ethics in Devolved Services: County Public Officers' Experiences — showed that bribery, favouritism, nepotism and embezzlement of funds remain the most prevalent form of corruption in counties.
Procurement irregularities
Procurement irregularities, abuse of office, conflict of interest and shoddy implementation of projects follow in the order of the form of graft being perpetuated in the counties.
The report indicted procurement, finance, public service board, roads and public works departments as the citadels of corruption in counties.
A 2016 report by the National Cohesion and Integration Commission revealed that tribalism, nepotism and corruption still influenced public recruitment in county public service despite existing legal provisions.
Only 13 county assemblies had recruited at least 30 per cent of their employees from the non-dominant ethnic group, while 34 county assemblies had employed more than 70 per cent from one dominant ethnic group in the county or had recruited entirely from one ethnic group.
However, it has not been all doom and gloom. Access to healthcare has significantly improved in almost all counties, especially in the traditionally marginalised areas. Across the country, well-equipped local hospitals now provide the much-needed services, drugs, equipment, and health personnel.
