Factors Contributing To Indebtedness Among Local Authority Councils In Kenya: A Case Study Of Ogembo Town Council

ABSTRACT

The local authority councils have a critical role to play in the socio-economic development of Kenya. It is responsible for the implementation of policies and programs, which aim to improve the well being of local residents. It is the machinery through which the central government translates basic policy objectives into workable programmes for the benefit of society. A local council with a low budget deficit or no deficit at all is, therefore key to the country's economic growth and development. However, high budget deficits experienced by local authorities resulting into unsustainable debt levels, have affected their service delivery. This study intended to investigate the factors that have contributed to high debt levels in Ogembo Town Council, with a view of making suggestions to help curb the problem. The research was descriptive ad analytical in nature and employed questionnaires, structured interviews and observations to collect data. Data collected was analyzed using descriptive statistics to assess the impact of various variables on indebtedness. Specifically data was analyzed using frequency distributions and means. A simple regression analysis was also done on the data. The study found out that the high debt levels at OTC was as a result of politics, high demand for services coupled with inefficient revenue collection methods and over employment of low cadre staff. Delaying the approval of the Town's Physical Development Plan by the MOLO has also denied the council of revenue from key sources like the property taxes. Unlicencing of quarrying and brick-making activities has also been a great oversight. The MOLO should speed up the approval of Physical development plans for Las to unlock key revenue sources for councils. Policy guidelines on staff rationalization should also be explored.