DR DANIEL MUTEGI GITI:Counties need to operationalize the 80/20 rule or Pareto Principle to rapidly develop

Kenyans had seen what the little changes to the centralized government had done to service delivery – the success of the District Focus for Rural Development (DFRD) introduced in 1983 thorough the District Focus for Rural Development Strategy (DFRDS), which brought about decentralized treasuries such that residents could plan for their developments; the successes of the Constituency Development Fund (CDF), introduced in 2003, which has accelerated service delivery and implementation of local projects in constituencies like schools, bursaries and infrastructure projects; and the various improvements that had accompanied the Local Governments model that Kenya had been practicing from 1963, under the Local Government Act cap 265 that was repealed by the Constitution of Kenya, 2010.

Local governments previously enjoyed high powers in raising their own revenues. Local authorities are the precursor of modern-day counties and urban areas with lots of lessons for such entities. 

The fourth schedule, part two of the Constitution of Kenya, 2010 assigns counties fourteen functions that include: Agriculture; County Health Services; control of Pollution; Cultural activities; county Transport; Animal control and welfare; Trade development and regulation; county Planning and Development; pre-primary Education, village polytechnics, homecraft centres and children facilities; Implementation of specific national government policies on Natural Resources and Environmental Conservation, including— (a) soil and water conservation; and (b) forestry; County public works and services, including— (a) storm water management systems in built-up areas; and (b) water and sanitation services; Fire-fighting services and disaster management; Control of Drugs and Pornography; Ensuring and coordinating the participation of communities and locations in Governance at the local level and assisting communities and locations to develop the administrative capacity for the effective exercise of the functions and powers and participation in governance at the local level.

The financing of these functions require massive financial and capital outlay to be fully developed. The national government proposes to allocate 15 per cent of the total national sharable revenues to the counties. Counties have also the task of financing the recurrent expenditure that caters for the salaries and other facilitative payments to keep our counties running. Many counties have struggled to use more than 30 per cent of their total allocations from the national governments because of these obligations. This calls for the rationalization of the budgets and also the focus on a few areas that have the potential to grow the local economy and hence provide growth poles for the counties. 

Under these circumstances, counties have to focus on specific high yielding and impactful projects that are of high priority to the residents. Think of water, agricultural and livestock access roads, housing and settlement infrastructure, energy and education infrastructure. This is where the Pareto principle, the 80/20 rule comes in play.

The Economist Vilfredo Pareto discovered the Pareto Principle in 1897, aka Pareto law, Pareto Principle, the 80/20 rule, the Principle of Least Effort and the Principle of Imbalance. 

Richard Koch has written a book with the same title highlighting key issues that are central in management of resources, labour, finances, country and organizations. The foreword of the book quotes Henry Ford, who revolutionized the motor vehicle industry who said that “God plays dice with the universe. But they are loaded dice. And the main objective is to find out by what rules they were loaded and how we can use them for our own ends”. In other words, God has given us immense latitude as men to shape our world and do anything to improve it as per Psalms 116:15. The book and the principle are underpinned by the need for progress and development, which is driven by the process of substitution where weak resources or the ones that are not capable of producing superior results are not used and all, focus is on those resources or methods that can produce greater results and outputs for global use. 

The book highlights the need to ensure that every resource is used ideally where it has the greatest value or impact. The need to focus on more resourceful, impactful and transformational ideas led to the advancement of entrepreneurship from the word “entrepreneur” coined in 1800 by French Economist J.B Say. He noted that the entrepreneur shifts economic resources out of an area of lower productivity into an area of higher productivity and yield. 

The major implication of the 80/20 principle is that for all occasions and purposes, 20 per cent (vital few) of customers, products, programmes, projects and employees are always producing 80 per cent of the profits, successful and impactful programmes and projects and outputs. 

It also means that 80 per cent (the trivial many) of the customers, products, programmes, projects and employees are responsible for only 20 percent of profits, earnings, productivity and outputs, hence a situation that creates a lot of waste. It means that a majority of resources are being held back by a majority of much fewer effective resources. It upon this principle that county governments must get their priorities right as the planning and budgeting process is ongoing such that only those programmes and projects that are highly transformative and can bring much higher results and impacts.

Programmes on water (addresses food security and economic situation), sanitation (eliminates most diseases and hence good health), drought mitigation, climate change and mitigation and resilience (to cope with vagaries of climate change and global warming), health with more focus on preventive than curative health and connecting infrastructure are capable of driving the much-needed change in the country. This is where more funds should be used to rapidly move upwards development wise, and as such, the ideals of devolution will be achieved through strategic application of resources in the counties.