Local Government Development Finance (Kenya)
| Date | 01 October 1964 |
| Author | H. C. Seely |
| DOI | http://doi.org/10.1002/j.1099-162X.1964.tb00218.x |
| Published date | 01 October 1964 |
Local
Government
Development
Finance
(Kenya)
by H. C.
SEELY
Background
to
local
government
development
BEFORE
examining the details of local government development finance, it will
be as well to take a preliminary view of development generally in Kenya.
In
all underdeveloped countries perhaps the most
important
purpose
of
capital development is to increase the economy generally so as to raise
the
standard
of living, to increase the earning capacity of individuals
and
their
ability to purchase consumer goods
and
to make a bigger contribution to the
revenues of the country.
It is
natural
therefore
that
greatest attention has been placedon the develop-
ment
of
natural
resources, which in Kenya, unfortunately,
are
not
plentiful,
but
which
are
economic in themselves or directly increase the economy
of
the
country. Kenya's greatest
natural
assets
are
agriculture
and
animal
husbandry,
and
the development
of
these has taken the largest share of the available
development funds. Production has been increased over a large range of
agricultural products,
and
standards
of
husbandry have risen.
There
is still
much
scope for improved
and
intensified agricultural
and
livestock production,
coupled with the development of secondary light industries, for example, the
canning industry to cope with the more perishable crops produced.
Perhaps the greatest difficulty which has
had
to be faced in planning develop-
ment
in Kenya is
that
of obtaining capital finance particularly for the public
sector. Whilst, as the economy has expanded, it has been possible to raise a
larger
part
of
the capital finance required locally, this has
had
to be supple-
mented
by borrowing from overseas sources. All underdeveloped countries
suffer from a chronic shortage of capital for development,
and
Kenya
is no
exception. Consequently, development has
had
to be
planned
within the
limits of the finance available.
The
raising of loans from the private sector has
to some extent been affected by the political situation. Although statistics
show
that
from 1957 to 1960 the ratio
of
public
and
private investment to the
total remained fairly constant, in 1961
and
1962 there was a considerable
reduction in the ratio of private investment.
There
are, however, encouraging
signs
that
this position was to some extent restored in 1963 with the
return
of
political stability.
Naturally, local authority capital development is affected by the general
financial situation,
and
by any shortage of capital finance, particularly when,
as in Kenya, the local authorities obtain most of their capital finance through
government sources.
The
Local Government Loans Authority
and
the Central
Housing Board
both
obtain
most
of
their funds from the
Kenya
Government
Development Fund. Despite the difficulty of obtaining capital finance
for.
all
the
projects which local authorities have wished to undertake, aconsiderable
programme
of
capital development has been carried
out
by local authorities
in the last decade.
In
1954 all local authorities spent
about
£2.5
million on
various capital schemes; by 1961 the figure was
£3.6
million annually
and
Mr.
H. C. Seely,
A.I.M.T.A.,
is the Principal Local Government Financial Officer in the
Ministry for Local Government, Kenya.
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