Academic journal article Review of Business & Finance Studies

Flow of Funds for Sustainable Road Maintenance in Kenya

Academic journal article Review of Business & Finance Studies

Flow of Funds for Sustainable Road Maintenance in Kenya

Article excerpt

ABSTRACT

Kenya established the Road Maintenance Levy Fund in 1993 to finance road maintenance. The Kenya Roads Board is at the centre of the Fund's administration and accomplishes this by working in collaboration with various implementing agencies. However, through professional experience, we have learnt that the flow of funds to road agencies is inconsistent, due to various factors, which this study aimed at documenting to justify reforms towards sustainable road maintenance. We applied the cross-sectional survey design to source information from 146 key informants. The study found that delay in allocation committee meetings (33.0%) and requisition of the Authority to Incur Expenditure (71.3%); lengthy disbursement channel (84.0%), lack of a proper tracking system (47.9%) delay in external auditing (56.4%) and weak financial management system (24.5%) were the key factors constraining the flow of funds. The constraints affected the implementation of work plans (73.4%), maintenance backlog (60.6%) and encouraged procurement malpractices (57.4%), among other issues. The study recommends the need for electronic fund transfer to agency accounts, follow-up communication to track disbursements; enforcement of adherence to provisions of the Public Officer Ethics Act and the Public Procurement and Disposal Act, commercial accounting practices at the agency level and additional audit staff.

JEL: 016

KEYWORDS: Road Maintenance Levy Fund, Kenya Roads Board, Road Maintenance Agency, Sustainable Road Maintenance, Disbursement of Funds, Procurement Gaps and Accountability

INTRODUCTION

Road transport plays in important role in the development of the Kenyan economy. It accounts for over 80% of land freight and passenger traffic in Kenya (Kenya Institute of Public Policy Research and Analysis [KIPPRA], 2001; World Bank, 2011; Government of Kenya [GoK], 2012). An efficient road infrastructure1 is a prerequisite for socio-economic development, particularly in agricultural economies. In this regard, a well-developed road network is necessary to facilitate the transportation and marketing of farm produce (Heggie, 1995; Nyangaga, 2007).

As noted by the Central Bank of Nigeria (2003), bad roads impede the movement of commodities and services from producers to consumers and farm produce from rural areas to urban centres. Bad roads also lead to loss of person-hours, with far-reaching consequences on motor vehicle maintenance costs, as well as the emotional and physical health of citizens. Similarly, Nyangaga (2007) points out that a poor road network increases the cost of farm inputs, production and access to markets, which in turn, makes the cost of living unbearable for low income-earners. Bad roads also constrain access to essential services such as healthcare, education and emergency responses in the event of disasters (GoK, 2012).

The development of a road network cannot be complete without a sound and sustainable program for its maintenance. In Kenya, the Road Maintenance Levy Fund (RMLF) came into existence in 1993 through an Act of Parliament and its objective was to facilitate the maintenance of public roads. The Kenya Roads Board (KRB), which came into existence through the Kenya Roads Board Act No. 7 of 1999, administers and manages the disbursement of RMLF resources. In this regard, KRB oversees and coordinates the development and maintenance of the road network in the country (GoK, 2006; Kenya Anti-Corruption Commission [KACC], 2007).

To achieve this, KRB has works in collaboration with various agencies and sub-agencies to carry out the actual maintenance of roads (Nyangaga, 2007; Government of Kenya, 2012). At the time of this study, the agencies included the Roads Department at the Ministry of Roads and Public Works (MoRPW), District Roads Committees (DRCs), Kenya Wildlife Service (KWS) and local government authorities across the country. Whereas the Department of Roads deals with international and national highways as well as trunk roads (Classes A, B and C, respectively), DRCs deal rural access and feeder roads (Classes D and E), while KWS focuses on the construction and maintenance of the roads in national parks and game reserves (GoK, 2006; KACC, 2007). …

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