How county governments can bridge wealth gap

Although counties were, at inception, envisaged as important institutions to reduce inequality between regions, they have deferred the dream of shared prosperity within their own boundaries, meaning that devolution has favoured a wealthy minority while marginalising a large swathe of citizens. 

This gap between the rich and poor in counties was laid bare this week by a report, published jointly by the Kenya National Bureau of Statistics and the University of Nairobi, which found that Turkana had the highest gap between its rich and the poor. Interestingly, Nairobi had the lowest.

What the report implies is that the billions that Treasury sends to counties every year have not succeeded in spurring wealth generation at local level and, therefore, there is need to identify gaps in resource allocation to redress this imbalance.

One way of doing this is by investing in markets and market linkages so that farmers can sell their produce at competitive prices without necessarily being taxed to death by local authorities who demand a host of fees at every point produce is sold or transported.

One of the biggest challenges that counties ought to address is how to reduce the cost of agricultural production.

This is one problem that has stood in the way of families unlocking their wealth and growing economically.

At every point, the cost of farm inputs remains high – in part due to excessive taxation – which then means local agricultural produce cannot compete favourably with imports. This has led to lost opportunities for local production.

For instance, recent reports indicate that there is likely to be a shortage of beans in the near future because imports from Ethiopia will no longer be coming to Kenya after the neighbouring country signed an export agreement with Pakistan.

Rather than taking this as an opportunity to ramp up local production, it is being viewed as a problem especially considering that beans is an important part of Kenyan diet and holds the key to reducing malnutrition in poor families.

This development should give county leadership food for thought so that they can find ways of addressing this shortage by giving incentives to farmers to undertake or increase bean production. Such interventions would have three positive outcomes.

First, it will put money in the pockets of farmers. Secondly, it will improve health outcomes, especially among children from poor families. Finally, it will go a long way in reducing the gap between the rich and poor.

Another important step that devolved governments ought to take is to pay its workers competitively – starting with nursery school teachers, nurses and other professionals who have foregone the allure of private sector jobs to dedicate their services to public institutions.

This can take the form of a localised Marshal Plan, which can be undertaken progressively to ensure that local economies have enough money circulating so that people in villages and rural townships can have capacity to engage in meaningful economic activities.

Failure to pay county staff competitively – and on time – is one of the biggest contributors to grassroot poverty and inequality.

It means workers who have not been paid cannot meet their financial obligations, which has a ripple effect on everyone down the chain, including farmers and traders who supply them with necessities.

Indeed, counties ought to be encouraged to resist the peer pressure of undertaking grand, capital intensive infrastructure projects. They can leave these to the national government.

Instead, they should invest their money and ideas in low-scale policy interventions that make it possible for communities to generate and grow incomes, such as inexpensive milk cooling plants, small-scale agro-processing factories, quality retail markets and linkages that facilitate local communities to sell produce outside their counties, including through exports.

Finally, they ought to encourage farmers to diversify their production and reduce reliance on traditional crops like maize, which have low returns.

They should encourage increased production of crops like potatoes – which are in short supply currently – fruits and legumes that take only a few months to mature.

This way, local farmers can have regular crop turnover which in turn translates to liquidity all year round.

This is a more cost-effective and empowering model compared to the traditional way of making money only when farmers harvest their long-term crops once a year. — The writer is a Partner and Head of Content at House of Romford— Mbugua@houseofromford.com