Makueni and Bungoma counties have been ranked the best in the country in terms of investors’ opportunities.
Under a programme – County credit worthy initiative aimed to assist County governments to access financing through capital markets for public infrastructure development and service delivery, Makueni, Bungoma and Kisumu were awarded ratings of BBB, BBB and BB respectively.
The Credit ratings of the counties was conducted by the Global Credit Rating Agency (GCR) in collaboration with the National Treasury, Commission of Revenue allocation (CRA), Capital Markets Authority (CMA) and the World Bank.
The three counties were part of the 9 (counties) pre- qualified to serve as a pilot cohort for the Kenya County Credit worthiness Initiative (CCI).
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“The CCI is a multiagency platform aimed at spearheading county governments towards credit worthiness and aims at achieving strengthened financial management systems in counties,” CRA Chairperson Dr. Jane Kiringai said during unveiling of the Credit ratings in Nairobi.
The credit worthiness, she added, also looks at capital market that is ready for county borrowing, a fiscal structure that supports responsible borrowing and institutionalized framework that could oversee a suitable county government borrowing.
Dr. Kiringai said that the main objective of the initiative was to assist County governments to access financing through capital markets for public infrastructure development and service delivery.
Senate Speaker Kenneth Lusaka said the ranking came at a good time when the government was advocating for strengthening of all resource revenue and reduce dependency on national government revenue.
“Credit ranking will allow the counties to meet funding gap and borrow directly from the market, a clear indication that devolution is indeed the key to ending poverty and promoting shared prosperity in Kenya,” he added.
Lusaka commended the World Bank, CMA, CRA, the National Treasury and the three County Governments for the initiative but cautioned counties against over spending, under taxing or borrowing excessively.
Governors Wycliffe Wangamati from Bungoma, Prof. Kivutha Kibwana from Makueni and Prof. Anyang Nyong’o from Kisumu County echoed the benefits of credit rating and termed the initiative as a gateway to speedy development as it would open up external funding which would benefit their counties.
They also urged other Governors to submit their counties under credit rating which in turn would improve their creditworthiness.
World Bank Group’s Programme Leader Allen Dennis noted that the capacity building and credit rating support provided so far were initial steps for County Governments in Kenya to be better prepared to access development financing.
“We are focused on identifying solutions to the key risks, market failures and obstacles that prevent market-based financing from playing a greater role in addressing development challenges as part of its maximizing finance for development agenda,” Dennis said.
CRA’s vice-chairperson Humphrey Wattanga explained that the process of the Credit worthiness initiative involves county self-assessment on creditworthiness, creditworthiness training and work planning, credit rating, technical assistance to counties and other national government agencies and finally knowledge and outreach.
CRA is considering rolling out the programme in the remaining county governments subject to availability of funds and especially in the pilot counties proved to be a success story in financing of capital projects.
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