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Constitution of Kenya Review Commission

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Decentralization and Greater Regional Autonomy for more Efficient Management: Fiscal, Resource Distribution and Related Issues

By Gerrishon K. Ikiara University Of Nairobi


1.0 Key Issues in the Debate

In the post-independence period, centralized political and economic system has been generally preferred largely because it was regarded as the most effective way of forging national unity. There is however, need now to review this assumption. There are a number of weaknesses, which are associated with a centralized system. One of these is the power that is given to the Central authorities in the management of national resources. Such powers tend to cause tension and intensify struggle to acquire such powers. Secondly, centralization tends to promote inequity in resource distribution and could stifle socio-economic development in some of the areas, especially those, which are politically marginalized. Thirdly, the center tends to monopolize policy formulation and implementation, giving the regions limited chance to increase their capacity to manage their affairs.

2.0. Proposed Strategies in the Devolution of Power

There is need to decentralize political and economic management to give more powers to

the regions, through the following measures: -

* Strengthen regional political and administrative institutional capacity either at the provincial or district levels. Every Province or district would need to have their own legislative assembly.

* Regions should be allowed to collect revenue from their economic activities retain must of it (say 75%), and surrender the remainder to the national/federal government.

* The national Parliament would determine the regional governments powers and

* those of the national/federal government.

* While regions would enjoy considerable autonomy, all citizens would be free to

* live, work, go to school, own property, etc., in any region and be accorded equal

* rights, privileges, protection, etc.

* Internal and External security and defence would be the responsibility of the

* federal government.

Guaranteed Security of Life and Property .

Security of life and property are crucial preconditions for both domestic and foreign investment. Lack of this security has become a major concern especially after the so-called land or 'tribal' clashes of early 1990s and the coastal ethnic clashes of 1997. Threats of eviction Kenyans from certain parts of the country ostensibly because such people were not originally from those areas have become rather too common. In some cases, threats became real, with wanton destruction of property and loss of life.

* There is need for clear provisions in the constitution to enhance security of life and property to all Kenyans: Some of the necessary provisions include: -

* Clearly stated constitutional guarantees that Kenyans are all equally free to live and own property in any part of the country.

* The government must undertake to compensate citizens who lose property or life as a result of ethnic animosities. This will not only serve as an assurance to investors, it should also ensure that the government takes the necessary measures to prevent occurrence or scope of such incidents.

* Incitement to ethnic animosities, tensions should be classified as a treasonable offense, punishable with long jail term. People convicted of such crimes should be declared illegible for public offices or appointments.

* Property acquired through inheritance or through market forces of willing buyer -willing seller should have equal legal recognition and protection. There is need to clarify the role of history and indigenous ownership in a modern nation.


The success of the devolution exercise will, to a large extent, depend on how well the country's fiscal and resource distribution systems are designed. The following are some of the areas that must be properly thought out, debated and agreed before the details of the power devolution are finalized.

3.1 Taxes & Revenue Collection

* Tax jurisdiction for both the federal and regional authorities. This will depend on the responsibilities of these different levels of governance.

* Sharing formulae for tax revenue collected at various levels

* Overall supervisory authorities to ensure tax compliance at various levels.

* Personal and company taxation and the question of residence of nationals moving from one region to the other.

3.2 Public Expenditure & Resource Distribution

Specifying of financing responsibilities at different levels with regard to the provision of essential & social services such as education, health, housing, external defence and security, transport and communication, power, water and other infrastructural services.

Extent to which federal and regional financing of these services may exist side by side e.g. federal schools/universities vs. regional schools/universities, etc.

* Whose responsibility will it be to revive sluggish or economically stagnant regional authorities?

* Subsidies and related issues, e.g. should a regional authority subsidize another?

* should the federal system subsidize regional authorities?

* Should regional authorities subsidize federal institutions?

* Nairobi and Mombasa generate much higher proportions of resources than the other areas. What is the implication for other regions as a result of devolution of power and fiscal responsibilities?

* Residence, tax payment and enjoyment of certain public services at regional and federal institutions for optimal incentives and equitable fair distribution of resources?

* Who finances regional bureaucracies?

3.3 Factors/Principles to Observe

These and related issues must be exhaustively and candidly discussed and debated before the design of the devolution of power is finalized. The final design must however, be guided by the following factors/principles.

* Need to maximize commitment and incentives of residents of a particular region in financially contributing in the revenue collection of their region.

* Avoiding creating dependency or complacency of same regions, expecting to ride on the backs of others.

* Ensuring the national and international responsibilities are effectively catered for.

* Maximizing productive, creative energies of various regions through healthy competition in various activities.

* Maximizing socio-economic and infrastructural growth at both the federal and regional levels.

* Ensuring that there are providing for adequate resources at the federal and regional levels.

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