Effect of Debt Management on the Service Delivery Efficiency of County Governments in Kenya
DOI:
https://doi.org/10.70619/vol6iss1pp69-82-731Keywords:
Debt management, Service delivery efficiency, County GovernmentsAbstract
Effective fiscal management is critical to boosting public sector performance, particularly in developing nations. In Kenya, the 2010 Constitution ushered in a devolved system of governance, making fiscal management and efficient service delivery increasingly important. Research shows a strong delivery, underscoring the role of sound financial practices in improving public services. This study employed a descriptive research design encompassing all 47 Kenyan counties. Secondary data was extracted from audited financial statements covering fiscal years 2013/2014 to 2020/2021. The data were analyzed using Stata 27.0, incorporating descriptive statistics (percentages, frequencies, measures of central tendency, and dispersion) and inferential techniques, including correlation, univariate regression, and diagnostic tests. Panel regression models were used to assess the influence of debt management on Kenya. Debt management had a positive and significant effect on the county's gross product and well-being. The results highlight that well-structured debt management strategies can lead to better economic outcomes, enabling countries to utilize borrowed funds more effectively for development projects and service delivery. This is particularly relevant in the context of Kenya's ongoing efforts to manage public debt sustainably, while financing essential infrastructure and social programs. The findings also suggest that as counties improve their debt management practices, they can expect not only to stabilize their financial health but also to foster greater economic growth and improve the welfare of their constituents.
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