Kenya's Six Counties Excel Devolution Spending Benchmark

• Only six counties met the legal threshold for development spending in the 2024/25 financial year.
• The majority of counties fell short of allocating at least 30% of their budgets to development projects.
• Kwale emerged as the top performer with a perfect development expenditure score of 1.000.
• 27 counties allocated well below the required amount to development projects.
• Taita Taveta recorded the weakest performance, allocating just 7.82% of its budget to development.

These counties exemplify prudent fiscal management, with a deliberate focus on long-term investments that enhance service delivery and spur economic growth.

A new Senate report has revealed that only six counties in Kenya met the legal threshold for development spending in the 2024/25 financial year, highlighting widespread failures to allocate sufficient funds to projects that directly improve residents' lives. The report, which uses a scientific assessment called the County Fiscal Performance Measurement Index (CFPMI), measures counties against the Public Finance Management Act's requirement of allocating at least 30% of their budgets to development expenditure. This threshold is crucial for enhancing service delivery and spurring economic growth in devolved units. However, the majority of counties fell short of this target, with 27 counties allocating well below the required amount to development projects.

The six counties that exceeded the statutory development spending threshold - Kwale, Embu, Kericho, Mandera, Siaya, and Uasin Gishu - demonstrated strong fiscal discipline by consistently prioritizing long-term investments in infrastructure and public services. These counties achieved an 'A' grade, with Kwale emerging as the top performer with a perfect development expenditure score of 1.000. In contrast, seven counties were classified as moderate performers after narrowly missing the constitutional benchmark, while another seven counties were identified as the country's poorest performers, having dedicated less than 15% of their budgets to development expenditure.

The report's findings have significant implications for devolution in Kenya. Senate Majority Leader Aaron Cheruiyot expressed concern over the low level of development spending across counties, saying it undermines the spirit of devolution. He emphasized that the scorecard would raise the quality of debate in the Senate by replacing opinion with evidence, allowing senators to make informed decisions based on data from independent constitutional institutions. The report also highlights the need for counties to prioritize development projects and allocate sufficient funds to achieve their goals.

Lawyers and compliance officers should watch for the implications of this report on their clients' county-level projects, as it highlights widespread failures to allocate sufficient funds to development projects, potentially exposing them to non-compliance with the Public Finance Management Act.

Source: Original reporting via Senate Parliamentary Budget Office