Sonko’s big headache in automation of cash flow at city hall
The debate surrounding the automation of revenue collection in the counties resurfaced last week after Nairobi Governor Mike Sonko sought to know how money is collected in the county.
In a letter to Web Tribe Ltd, the owners of JamboPay and EJijipay platforms, the governor also sought to know how much the company had collected in two weeks’ time.
“I am reliably informed that your company is contracted by the Nairobi City County and operates JamboPay of cash collection, to enable me familiarise myself with the system, I hereby direct you to provide my office by close of business today with the documents requested,” the letter dated August 23 reads in part.
In the reply, Web Tribe CEO Danson Muchemi detailed the work the company does in its operations in the city.
“We wish to inform you that JamboPay only collects 14 revenue streams out of the 136 revenue streams specified in the county finance act,” Mr Muchemi wrote.
During the campaigns, Mr Sonko had indicated that he would replace the company once in office, but he could run into legal problems since Web Tribe has a five-year contract with Nairobi County Government up to next year.
The 14 include daily parking, liquor licensing, market rents, miscellaneous, E-Construction, Fire, Health, seasonal parking, parking penalties, single business permits, house rents, land rates, advertisement and regularisation.
The EjijiPay record indicates that total of over Sh14 billion was collected half of which was banked in the county’s accounts at Co-operative, KCB and National Bank.
Last year Nairobi was crowned as the highest local revenue collector. JamboPay charges Nairobi County transactional fee of 1.25pc- 4.5pc.
Out of the 47 counties, 35 have so far automated their services. Some of those that are yet to automate their revenue collection services include Tana River, Elgeyo Marakwet, Homa Bay, Kilifi, Nyamira, Isiolo and Kitui.
AUTOMATED REVENUE COLLECTION
Data from Commission of Revenue Authority shows that counties that have automated revenue collection have seen an upsurge of revenue.
The election of new governors will see more measures implemented to automate revenue collection.
The onset of internet and mobile phones has led to innovation of new ways to make payments and this has led to creation of financial technology firms.
Commercial banks and financial technology firms (Fintechs) are now involved in a simmering battle to get a share of automated collection of revenue for counties and other government parastatals as technology gains a foothold in the financial sector.
A look at the data from counties shows the financial technology firms are having an edge over the banks.
Several banks have recently created their own fintech subsidiaries while others are partnering with fintech companies to stay relevant in the new market niche.
According to insiders, banks are greatly disadvantaged by stringent regulations by the government.
The fintechs are agile and very flexible and armed with ever evolving cutting edge technologies and business partnerships.
Some of the financial technology firms that are already in the market include JamboPay/Web Tribe, Craft Silicon, Cellulant, River Bank who partner with KCB and Virtual Mobile, Strathmore Research and Consulting Centre (SRCC), Quadrant Software and Compulynx.
Jambo pay, which is dominant in the market with eight years’ experience has expanded its operations to Uganda, Tanzania, Rwanda and India.