A group of Nairobi MCAs have expressed their concern over the collection and management of revenues by the Nairobi City County government. The MCAs drawn from the Nairobi County Assembly’s Energy and ICT Committee claimed that there is a lack of transparency in revenue collection and accounting within the county.
The MCAs said that the committee mandate is to investigate and inquire into all matters relating to the assigned departments as they may deem necessary, and as may be referred to them by the County Assembly.
“With modern ﬁnance functions and operations inextricably linked to ICT, we found it necessary to extend our inquiries to include the system currently being used by the Nairobi County to manage its revenue collection, reporting, and accounting,” they said in a statement.
(TOP: Kileleshwa ward MCA Robert Alai and another member reading the statement by the Nairobi County Assembly’s Energy and ICT Committee).
“It is instructive that we found a complete lack of transparency in the entire manner in which the Nairobi County’s revenue is being collected, reported and accounted for.”
The statement by the MCAs follows the recent report by the Ethics and Anti-Corruption Commission (EACC) which noted the opaqueness of the Nairobi County’s revenue collection system.
The EACC said that senior officials within county governments are using the revenue collection systems to divert county revenues by colluding with service providers, leading to losses running to billions of shillings. The anti-corruption watchdog noted that in some counties private service providers have total control over the revenue management systems, making it difficult for county governments to ensure accountability.
According to the EACC, senior county government officials have super-user access rights on the automated systems, as well as ability to delete and edit the amounts of revenues collected, leading to diversion of funds. Some counties also lack mechanisms to reconcile revenue management systems in cases where the counties have contracted different service providers to collect specific revenue streams.
“Just as the EACC noted that the use of mysterious revenue collection providers is a possible avenue of loss of public funds, our internal investigations also reveal the massive irregularity in Nairobi County’s revenue management,” said the MCAs in a statement read by Kileleshwa MCA Robert Alai.
The MCAs stated that Nairobi City County has a potential for 25 revenue streams and only 8 are automated, adding that the remaining 17 which are not automated are being pilfered.
In the previous ﬁnancial year, Nairobi City County is reported to have received Kshs 15 billion from the national government and collected just over Kshs 10 billion from its own sources of revenue.
“We believe that it is possible that Nairobi County raises much more than this ﬁgure and are conﬁdent that it is even capable of raising as much as Kshs 43 billion annually from its own revenue sources. We are casting a deep shadow on the revenue reported because there are some major gaps in the way the whole program is set up,” they said.
According to MCAs, and giving credence to the EACC’s report, none of the CECs for Finance and ICT have administration rights to the revenue management system nor do they know the identity of the owners or operators of the Nairobi Revenue System (NRS). The MCAs noted that the county government’s Finance and ICT bosses are also “clueless about the whereabouts of the servers that run the system.”
“Even more confounding is that no valid contract exists in which the Nairobi County has appointed Nairobi Revenue System to be its principal collector. As was rightly stated by the EACC, this degree of opaqueness in the contracting of external suppliers to manage revenue for the county is a recipe for pilferage of public funds,” stated the MCAs.
Being the County which contributes the largest share of the national GDP at 28% (as per the KNBS report for 2023), the MCAs stated that it is crucial for Nairobi County’s revenue to be properly collected, reported, and accounted for.
“Yet for now, it is clear from our investigations that the county is punching well below its weight in development as there is a high degree of revenue leakage. We have noted from research across various county wards, speaking with people working in the transport, public health, trade, environment, infrastructure sectors, that Nairobi County possibly reports 10 percent of total daily collected revenue and collects less than one third of the possible income,” they added.
“Indeed, our analysis has shown that Nairobi County has the capability to run its operations without injection of national government funds and that if properly managed, can easily build a fund which can be used to lend money to other counties.”