The Nairobi government could be losing millions of shillings in revenue from city markets as some officers still collect levies and fees in cash.
A special committee tasked with investigating the reasons behind the revenue shortfall heard that some officers still collect revenue in cash rather than guiding residents to utilise digital systems.
The team was told that this practice could be a significant factor contributing to the decline in revenue collection as the current administration marks its second year in office.
This was revealed during public engagement at Charter Hall where various market leaders in Nairobi presented their issues before the committee.
The committee, led by Makongeni MCA Peter Imwatok, heard that this habit persists despite the availability of a digital revenue collection system.
Muthurwa market chairman Nelson Githaiga told the ad hoc team that some county officers in their area collect cash and then transfer the funds to mobile phones before wiring it.
This process complicates efforts to ascertain the exact amount of money collected and directed to the county coffers.
The entrenched nature of this practice poses a challenge to the transparency and efficiency of the revenue collection system, hindering the county from realising its full revenue potential.
“There are those who pay daily like Sh50, the county officer does not have time to checklist every trader who pays through the phone,” Githaiga explained.
“The traders collect the money first then hand it over to the county officers who remit to the county. The process of handling cash makes it hard for us.”
Muthurwa market was opened in 2007 to help remove hawkers from the CBD and ease traffic congestion. It was supposed to be a model market.
Built on 15 acres opposite Machakos Country Bus Stage, it was to host 10,000 traders and vendors.
Seventeen years later, it's clear that the market was a good vision but faces various challenges including declining revenue.
During the hearing, it was also revealed that cartels operating within the market are impeding the county's revenue collection efforts.
The committee further learned that the current revenue collection system experiences frequent downtime, compelling some clients to reverse transactions.
Chairpersons from various city markets urged the county to devise a more effective revenue collection strategy and improve basic facilities in the markets, including maintaining clean toilets.
City Market director Joyce Mwangi told the committee that despite serving in the county for many years, she faces challenges accessing the revenue collection system.
“Owing to the challenges we are having with the revenue collection system, we cannot guarantee that we can achieve the daily target of Sh1.5 million,” she said.
The Director said she lacks access to the system, preventing her from holding officers accountable.
"I don’t know what happens within the system,” Mwangi said.
Various sectors brought forth during the investigation into the declining revenue attributed their challenges to system inefficiency, restricted access, and frequent downtime.
These issues collectively hinder their ability to meet daily or annual revenue targets.
Besides markets other Nairobi own-source revenue streams include parking fees, rates, single business permits, house rents, building permits and billboards and adverts.
In Governor Johnson Sakaja’s first budget for 2023-24, City Hall set a target for rates at Sh7.03 billion, single business permit Sh3 billion, parking fees Sh3 billion, building permits Sh1.9 billion, billboard and adverts Sh1.2 billion.
Others include markets Sh320 million, fire services Sh450 million, house rents Sh600 million, food handlers certificates Sh300 million, Wakulima Market Sh240 million and other income Sh1.8 billion.
Last month, Nairobi City County Business and Hustler Opportunities Sector’s Markets Subsector as part of its rapid results initiative forged the way forward on market revenue mobilisation, which is aimed at increasing revenue from baseline Sh81.5 million to Sh266.5 million in the next 90 days.
Business and Hustlers Opportunities executive member Maureen Njeri said that markets revenue had dipped in the last one year despite being one of the major revenue streams within the County.
"The governor is concerned by the markets revenue trajectory and has called for synergies in the activities of the various departments. There is need for all the sectors involved in revenue collection to work together and harmoniously to achieve the set targets," she said.