Revenue Mobilization Approaches and their influence on County Socio-Economic Development in North Rift Region,

Abstract

Revenue mobilization approaches have been adopted globally with an aim of enhancing development both at local and regional level. However, from available studies not all approaches have contributed effectively in mobilizing the available revenues for socio economic development. In Kenya for instance, the advent of devolution has implied that counties will have to device appropriate ways of enhancing resource avenues for socio-economic development. This still remains elusive for no appropriate approach has been devised. Therefore, the main objective of this study was to assess revenue mobilization approaches and their influence on County socio-economic development in North Rift Region, Kenya. The study was guided by the following objectives: to establish the influence of County collections on socio-economic development, to determine influence of training in revenue mobilization on County socio-economic development in north rift region, to determine influence of revenue mobilization technology on socio-economic development, to ascertain influence of stakeholder collaboration in revenue mobilization on socio-economic development, to analyse effect of revenue mobilization infrastructure development on socio-economic development and evaluate challenges faced by County governments in the North Rift in implementing revenue mobilization approaches. The study was guided by Resource-Based Theory of competitive advantage which states that the ability of institution’s resources and capabilities to support a sustainable competitive advantage is essential to the time frame of the institutions’ strategic planning process and the sequential theory of decentralization. The study adopted a descriptive survey research design. The study targeted a population of 1640 employees from revenue and planning departments in 6 County Governments in North Rift region. Random and stratified sampling techniques were used to get a sample size of 321 respondents. Instruments of data collection included questionnaires and Interview guides. Split half method was used to test reliability of research instruments. Data was analyzed using both descriptive and inferential statistics. Qualitative data was analyzed using thematic analysis. Data was presented using Tables, charts and graphs. The study findings revealed that most of the approaches for revenue mobilization in County governments are business licenses (96.2%), natural resource rents (60.3%), market dues and fees (55.1%). This informs that business licenses, market dues and fees are highly effective in revenue generation to the County governments. The regression analysis revealed that, there was a statistically significant relationship between business licenses, loans and parking fees and County development. In addition, training has a significant effect on socio-economic development (β= 0.644, p<0.05), technology in revenue mobilization (β = 0.596, p<0.05), stakeholder collaboration (β = 0.435, p<0.05) revenue mobilization infrastructure (β= 0.461, p<0.05) all have a significant and positive effect on socio-economic development. The County governments may need to ensure effective automation mechanisms of businesses licensing. For this to work, it is important to tailor the revenue mobilization approach to counter dishonesty in revenue collection and other forms of revenue leakages at all points of revenue collection. The County governments may also have to increase sensitization, mobilization and publicity to the community about the importance of revenue collection.