County governments have been urged to regulate borrowing in compliance with the constitution to avert possible financial crisis in their respective governments in future.
Speaking during a fund drive at Rigoma in Kitutu Masaba constituency, aspiring Nyamira governor Charles Mochama said many counties had failed to maximise on revenue collection and reverted to massive lending which authorities have failed to question.
He said the alleged huge borrowing by counties would soon throw the county units into a possible cash crunch, leading to slow economic growth.
Mr Mochama who also works as an advisor to the World Bank said many county governors were wooing external partners by taking borrowing as an option to trade with them.
“There are many untold truths about our county governments. Many of them are borrowing beyond what the law stipulates and failing to implement local tax collection mechanisms. If the authorities fail to address the issue, the counties will struggle in future to accomplish what many residents need,” he said.
Mr Mochama urged the county units to set effective mechanisms of revenue collection that will see non tax compliant citizens adhering to the law.
“There are many loopholes in tax collection and my appeal to all counties is that it is not yet late. They have an opportunity to collect more tax by sealing the loopholes by automating revenue collection,” he added.
He recommended that massive borrowing from external banks should be prohibited since it was likely to hinder development in the local areas.