The Effect of Own-Source Revenue on Financial Sustainability of County Governments in Western Kenya
Abstract
County governments in Kenya face persistent financial sustainability challenges despite constitutional provisions for own-source revenue generation. This study examines the relationship between own-source revenue effectiveness and financial sustainability indicators in Western Kenya's county governments. Through comprehensive analysis of 150 county officials across Busia, Vihiga, Bungoma, and Kakamega counties, the research reveals a strong positive association between OSR effectiveness and financial sustainability (r = 0.634, p < 0.001). Simple linear regression analysis indicates that OSR effectiveness explains 40.2% of variance in financial sustainability, with digital revenue systems emerging as the strongest contributing factor (28.1%). Component analysis reveals tax compliance rates (25.3%), revenue diversification strategies (24.8%), and administrative efficiency (21.8%) as additional critical determinants. The findings provide robust evidence for prioritizing OSR enhancement in county financial strategies, validating fiscal autonomy theory within Kenya's devolved context while highlighting the critical importance of technological infrastructure, administrative capacity, and compliance systems.
Keywords
Own-source revenue, financial sustainability, County governments, Fiscal autonomy
Citations
IRE Journals:
Imelda Akhonya , Edwin Baraza , Jared Oganda
"The Effect of Own-Source Revenue on Financial Sustainability of County Governments in Western Kenya" Iconic Research And Engineering Journals Volume 9 Issue 2 2025 Page 386-391
IEEE:
Imelda Akhonya , Edwin Baraza , Jared Oganda
"The Effect of Own-Source Revenue on Financial Sustainability of County Governments in Western Kenya" Iconic Research And Engineering Journals, 9(2)
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