County governments must stop viewing devolution mainly as a system for receiving and spending money from the national government and instead use their powers to attract investment, create jobs and build stronger local economies, Kenya Revenue Authority Chair Ndiritu Muriithi has said.
Muriithi said counties have the constitutional powers and responsibilities needed to shape economic activity in their areas but have not fully used them to improve businesses, employment and household incomes.
Speaking during a Radio Generation interview on Tuesday, the former Laikipia governor said the original purpose of devolution had lost some of its strength despite the 2010 Constitution giving county governments an important role in promoting social and economic development.
He said the creation of 47 county governments was meant to bring government and services closer to citizens while also helping address long-standing regional inequalities.
Counties were also given responsibilities covering areas such as local infrastructure, health services and trade development, which Muriithi said can be used to create conditions that support businesses and investment.
“I want to say that the spirit of devolution has somehow dimmed because the whole point, and in fact I think it is Article 174, is that counties are to be able to drive our development. So that now, when we are in Kisumu or Homa Bay or Laikipia or Meru, even as we think about the Nairobi government, we should be saying to ourselves, what are we doing for ourselves?”
Muriithi said county leaders should begin seeing their regions as places that can compete for investors instead of waiting for allocations from the national government.
He pointed to electricity supply as one area where counties could take a more active role in supporting industrial growth.
According to Muriithi, counties can help develop local energy projects and use affordable and reliable power as an incentive for companies to set up businesses in special economic zones and other investment areas.
He gave the example of Rumuruti in Laikipia, where he said a county could support the development of a solar power plant to supply an industrial zone and make the area more attractive to investors.
“What it means when you have a special economic zone there in Rumuruti, you can license, move your energy company or whoever to put a 20-megawatt solar plant there and feed your SEZ. It gives counties the possibility of competing on the basis of more affordable electricity in order to attract industry.”
Muriithi also called for counties to work together through regional blocs and establish development financing institutions that could provide long-term funding to businesses and projects.
He cited plans in the Lake Region to establish a development bank, saying counties could combine relatively small contributions to raise enough money to create a sizeable financial institution serving businesses in the region.
“If each county contributes 100 million, which they can, that’s 1.4 billion. It is enough to start a reasonably whatever development bank that can be financing long-term finance for projects in our region.”
He said the same model could be used by counties under the Central Region Economic Bloc to raise money and jointly support businesses and industries.
“It is the same with Central Economic Bloc. There are 10 counties. If we each contribute per year, for example, 100 million, that is one billion every year. In five years, our bank would be capitalized at five billion. Imagine that.”
Such regional financing arrangements, Muriithi said, could help counties support processing factories and other businesses while keeping more economic activity and value within their regions.
He argued that the challenge facing counties was not simply the amount of money available to them, but also how leaders think about and use the powers given to them under devolution.
“All that is limiting us, honestly, is our belief in ourselves, in our imagination. All that is limiting us is this preoccupation we have with negative politics, with calling each other names, sloganeering. It is a poor view of what the political process, what the democratic process is.”
Muriithi said counties should instead put greater attention on policies that increase production, support entrepreneurship and open up more opportunities for employment.
He said economic development at the county level would also require long-term plans that can continue even when political leadership changes, allowing investors and businesses to operate in a stable environment.
For Muriithi, the success of devolution should ultimately be judged by whether county governments can turn their constitutional responsibilities into productive local economies, stronger businesses, more jobs and better incomes for households.