Nandi County Fiscal strategy paper 2015

Transcription

COUNTY GOVERNMENT OF NANDI
COUNTY TREASURY
MEDIUM TERM
FISCAL STRATEGY
PAPER
FY 2015/2016, 2016/2017 AND 2017/2018
ACHIEVING EQUITABLE SOCIAL AND ECONOMIC DEVELOPMENT IN NANDI
COUNTY
FEBRUARY 2015
NANDI COUNTY FISCAL STRATEGY PAPER 2015
Page 1
Foreword
This Fiscal Strategy Paper, the second since the operationalization of the County Governments, sets out
the County policy goals and strategic priorities that will form the basis for formulation of the County’s
Budget for 2015/16 Financial Year and the Medium Term Strategic Goals. The Paper is prepared in
accordance with the Public Finance Management Act, 2012.
The paper is being prepared at a time when the County Government has put most structures in place
despite enormous challenges in implementing the first programme based budget. After implementation
of the 2013/2014 line based budget which was much simpler and flexible in its implementation, the
current approach to budgeting though complex is the best in financial management. The biggest
challenge remains to be our recurrent costs that still stand way over 60% of the total revenue. As eluded
earlier in the 2014/2015 paper, the county is yet to implement an effective organization structure. This
definitely has an effect on financial efficiency.
The County priorities and goals outlined herein are based on the County Integrated Development Plan,
sectoral plans and the Governor’s Manifesto, with emphasis on investment in Infrastructure, access to
clean water, accessible health care, sustainable farming with emphasis on dairy and value addition on
dairy products, increased investor and business confidence necessary to encourage investment,
education particularly (artisan) technical education through village polytechnics, wealth and
employment creation. These priorities shall form the basis for formulation of 2015/16 FY budget and the
Medium Term Planning Framework. The paper therefore links the County plans and policies to the
Budget which is the main objective of the Medium Term Expenditure Framework. It is worth noting that
the County Government made a significant increase in its actual recurrent expenditure on the
employment of ECD teachers, this goes a long way in improving both the child education and social
wellbeing of families and the County at large.
The paper covers the following broad areas in the review of the fiscal performance of financial year
2014/2015; highlights of the recent economic developments and the economic outlook both locally and
internationally; broad strategic priorities and policies for the Medium Term and the Medium Term Fiscal
Framework.
The fiscal framework presented in the paper ensures a sustainable financing while allowing continued
spending on priority programmes. Achievement of the set programmes and objectives calls for greater
transparency, effectiveness, efficiency and economy in public financial management in order to ensure
fiscal discipline and deliver value for money raised.
CHARLES K. MUGE
CEC –FINANCE, ECONOMIC PLANNING & ICT
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Legal Basis for the Preparation of the Fiscal Strategy Paper
The Fiscal Strategy Paper is published in accordance with section 117 of the Public Finance
Management Act, 2012 which states that:
a) The County Treasury shall prepare and submit to County Executive Committee the County
Fiscal Strategy Paper for approval and the County Treasury shall submit the approved Fiscal
Strategy Paper to the County Assembly, by 28th February of each year.
b) The County Treasury shall align its County Fiscal Strategy Paper with the National objectives in
the Budget Policy Statement
c) In preparing the County Fiscal Strategy Paper, the County Treasury shall specify the broad
strategic priorities and policy goals that will guide the County Government in preparing its
budget for the coming financial year and over the Medium Term.
d) The County Treasury shall include in its Fiscal Strategy Paper, the Financial Borrowing for the
Financial year and over the Medium Term.
e) In preparing the Fiscal Strategy Paper , the County Treasury shall seek and take into account
views of :
i.
ii.
iii.
iv.
The Commission On Revenue Allocation (CRA)
The Public
Any interested persons or groups: and
Any other forum that is established by legislation
f) Not later than fourteen days after submitting the County Fiscal Strategy Paper to the County
assembly, the County assembly shall consider and may adopt it with or without amendments
g) The County Treasury shall consider any recommendations made by the County Assembly in
finalizing the budget proposal for the financial year concerned.
h) The County Treasury shall publish and publicize the County Fiscal Strategy Paper within seven
days after it has been submitted to the County Assembly .
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Fiscal Responsibility Principles in the Public Finance Management Law
The Public Finance Management (PFM) Act, 2012 sets out the following fiscal responsibility principles
to ensure prudence and transparency in the management of public resources;
i.
The County Government’s recurrent expenditure shall not exceed the County
government’s Total Revenue.
ii.
Over the Medium Term, a minimum of thirty percent of the county government’s budget
shall be allocated to the Development expenditure.
iii.
The County Governments' expenditure on wages and benefits for its public officers shall
not exceed a percentage of the County government's total revenue as prescribed by the
Executive Committee Member for Finance in regulations and approved by County
Assembly.
iv.
Over the Medium Term, the government's borrowing shall be used only for the purpose
of financing development expenditure and not for recurrent expenditure
v.
The county debt shall be maintained at sustainable level as approved by County
Assembly
vi.
The fiscal risks shall be maintained prudently; and
vii.
A reasonable degree of predictability with respect to the level of tax rates and tax bases
shall be maintained taking into account any tax reforms that may be made in the future.
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Overview
This Budget Policy Statement (BPS 2015) is the second to be prepared under the County government of
Nandi. It sets out the priority programs of the Nandi County government to be implemented in the
Medium Term Expenditure Framework (MTEF) under a devolved system of Government and proposing
a review on the current budget with a view to improving efficiency and service delivery.
This CFSP is framed against a backdrop of the new financial governance framework in the country under
the Constitution of Kenya and the Public Finance Management Act, 2012. Its also prepared in view of
improving global `economic prospects though the world economy is showing signs of uneven and
sluggish recovery this year. Global growth is now projected to strengthen gradually from 3.3% in 2014
to 3.8% in 2015 driven by advanced economies as per the World Economic Outlook (WEO). Although
the Euro area has exited recession, growth remains anaemic, hampered by high unemployment, large
debt stocks and tight private sector borrowing conditions. Despite declaration in 2014, growth in
emerging markets and developing economies is projected to increase modestly in 2015 at 5 %, supported
by stronger demand and some recovery in global demand.
Given the economic challenges, growth is expected to remain robust at 5% in 2014 and 5.75% in 2015,
in Sub-sahara Africa, while economies of East African Countries are expected to grow at an average of
5.5% in 2015 driven by sustained infrastructure investment, buoyant service sector and strong
agricultural production. In a few countries, economic activities are facing headwinds from the recent
Ebola outbreak in West Africa and more recently the general macro-economic imbalances.
Kenya has maintained economic stability and fiscal discipline even in face of fiscal pressure where the
growth prospects remain strong given that inflation has been contained at single digit, interest rates are
trending downwards, exchange rates broadly stable despite the downward risks associated with sluggish
global recovery. These together with renewed investor confidence in the country following the
prevailing peaceful environment accelerate economic growth and creation of more jobs. The recent
reduction in fuel prices is expected to improve productivity in general and reduce cost of living given
that the resilience built over the years on account of sound macroeconomic management has helped
sustain Kenya’s economic growth which grew by 5.1% in 2013 and now expected to expand to 5.3% in
2014, rising to 6.9% in 2015 and 7.0% over medium term. The global and country events have a direct
impact in the economic front in our county.
In line with the Constitution 2010 and PFM Act 2012, Nandi County has developed Integrated
Development Plan with clearly set priorities to be implemented within 2013-2017 plan period to foster
county’s development agenda. The fiscal policy strategy recognizes that available resources are scarce
and hence the need to focus only on the County Government’s priority programs that have the highest
impact on the stated objectives, but within a framework of a sustainable and a stable macroeconomic
environment. This will be achieved by maintaining a strong revenue effort and containing the growth of
total expenditure, while shifting composition of expenditure from recurrent to capital expenditure and
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eliminating unproductive expenditures. It will also be achieved by containing the growth in the public
spending to a sustainable level in order to channel resources towards development programmes.
Expenditure Management: As part of economic transformation, the public expenditure reforms will be
deepened to improve efficiency and effectiveness in utilization and execution of the budget. This will
entail rationalizing public expenditures to remove overlaps and wastages, in all County Departments and
public agencies, developing and enforcing cost benchmarks for projects and consumables, entrenching
performance benchmark of at least 80% of the development budget, and strengthening the program
based budget. Expenditure tracking and value for money audits will be undertaken regularly to ensure
efficiency in use of resources of the government. The Monitoring and Evaluation Framework which has
been put in place shall play a crucial role in this process
The Fiscal Strategy Paper identifies the broad strategic priorities and policy goals that will guide the
County Government in preparing its budget for Financial Year 2015/2016 and the Medium Term
Strategic Objectives as set out in the Integrated Development Plan.
The paper discusses the performance of the Financial Year 2014/15 budget which forms the basis for
projecting the financial outlook with respect to the County Government revenues and expenditures for
financial year 2015/2016 and over the medium term.
The County priorities outlined in the paper shall form the basis for formulation FY 2015/16 budget and
the Medium Term goals and priorities. The fiscal framework ensures adherence to principles of public
finance and fiscal responsibility principles as set out in the Constitution and the Public Finance
Management Act 2012 respectively. Specifically, the development to recurrent expenditures has been
maintained within the required ratios of 30:70. Further the expenditures are fully funded from the
allocation from the National Government and county own revenue. In achieving county goals, prudency
in use of public resources will be exercised.
The paper covers the following broad areas; review of the fiscal performance of financial year
2014/2015; highlights of the recent economic developments and the economic outlook; broad strategic
priorities and policies for the Medium Term and the Medium Term Fiscal Strategy Framework.
The priorities outlined in the Paper are in line with the priorities set out in the Budget Policy Statement,
namely:
i.
ii.
iii.
iv.
Scaling up investment in key infrastructure areas e.g. roads networks and water supplies
Making piped water available to all citizens of Nandi County.
Investing in improved and quality health care and education, including the inception of a medical
training centre.
Getting involved in the improvement of quality support and quality audit of sporting activities
and the development of sporting facilities.
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The broad key strategic priorities identified for implementation in the medium term are in line with the
focus areas of the Medium Term Plan which include: employment creation, expansion and improvement
in quality education, health and sports, increased investment and modernization of Infrastructure.
In order to achieve the set objectives, the county will employ greater transparency, effectiveness,
efficiency and economy in management of public resources in order to ensure fiscal discipline as
stipulated in the constitution of Kenya 2010 and the PFM Act 2012.
Performance of FY 2014/15Budget
This section covers the performance of the FY 2014/15 budget for the period July 2014 to January 2015.
The County revenue for the said period was mainly from the National Government allocation as
provided in the County Allocation of Revenue Act, 2014 and the County own revenue which consists of
property rates, entertainment taxes and fees and charges as provided in the County Finance Act, 2014.
The expenditure units during the year were the County Assembly and the County Executive consisting
of the Governor's office, the Deputy Governor’s office, the Public Service Board, and Public Finance
Management staff in the following areas;
i.
Department of Transport and Infrastructure.
ii.
Department of Land, Environment and Natural Resources
iii.
Department of Health and sanitation
iv.
Department of Trade, Investment and Industrialization Development
v.
Department of Youth, Sports and Social Services
vi.
Department of Tourism, Culture and Co-operative Development
vii.
Department of Agriculture, Livestock and Fisheries
viii.
Department of Finance, Economic Planning and ICT
ix.
Department of Devolved Units and special programmes
x.
Department of Education, Research and Vocational training
Page 7
The table below summarizes the performance of FY 2014/15 Budget as at end January 2015.
Table 1: Performance of FY 2014/15 Budget as at end January 2015.
BUDGET PERFORMANCE for FY 2014/2015 as at 31-Jan-2015
FY 2014/2015
1
ACTUAL
EXPENDITURE
As at
31/01/2015
BALANCE
As at
31/01/2015
4585,232,340
2,832,445,868
1,752,786,472
4,313,232,340
2,718,400,835
1,594,831,505
63
4,058,551,882
2,718,400,835
1,340,151,047
67
TOTAL REVENUE
1.1 National Government Allocation
1.1.1
Equitable share
%
utilization
PRINTED
ESTIMATES
59.2
1.1.2 Loans and Grants -CRA
120,799,558
120,799,558
0
1.1.3 Rural Electrification - CRA
133,880,900
133,880,900
0
1.1.4 Level 5 hospital
-
-
1.1.5
-
-
Donor Financed
1.2 Own revenue
2
TOTAL EXPENDITURE
2.2 RECURRENT
114,045,033
157,954,967
24.2
5,190,313,940
2,667,337,235
2,522,976,705
51.4
2,782,150,941
1,317,107,524
1,465,043,417
47.3
472,000,000
2.2.1 COUNTY EXECUTIVE
263,357,000
112,238,938
151,118,062
42.6
2.2.2 Devolved units and Special Programs
79,415,000
31,278,943
48,136,057
39.4
2.2.3 Finance and Economic Planning and ICT
638,674,202
290,080,286
348,593,916
45.4
2.2.4 Agriculture,Livestock and Fisheries
Education Research and Vocational
2.2.5 Training
243,439,052
108,094,293
135,344,759
44.4
91,214,400
32,820,226
58,394,174
36.0
2.2.6 Health and Sanitation
Trade ,Industrial Development and
2.2.7 Investments
693,782,000
392,836,758
300,945,242
56.6
52,940,017
15,074,983
37,865,034
28.5
Page 8
Roads,Transport ,Infrastructure and
2.2.8 Public Works
159,482,952
66,696,233
92,786,719
41.8
Youth,Gender and Social Services
Tourism ,Culture and Co-Operative
Development
Land,Housing ,Environment and
Natural Resources
73,674,000
34,778,237
38,895,763
47.2
27,149,000
5,832,708
21,316,292
21.5
50,266,372
15,538,312
34,728,060
30.9
Public Service and Labour
44,996,000
13,650,870
31,345,130
30.3
County Assembly
363,760,946
198,186,737
165,574,209
54.5
2,408,162,999
1,350,229,711
1,057,933,288
2.3.1 County Executive
206,080,000
109,113,596
96,966,404
52.9
2.3.2 Devolved units and Special Programs
114,400,000
23,281,861
91,118,139
20.4
2.3.3 Finance and Economic Planning and ICT
Agriculture and Livestock ,Vetinary
2.3.4 Services and Fisheries
2.3.5 Training
49,020,000
10,431,662
38,588,338
21.3
138,330,000
29,408,613
108,921,387
21.3
168,400,000
68,282,246
100,117,754
40.5
2.3.7 Investments
Roads,Transport ,Infrastructure and
2.3.8 Public Works
364,250,000
204,896,745
159,353,255
56.3
89,020,000
44,889,751
44,130,249
50.4
541,000,000
469,513,239
71,486,761
86.8
2.3.9
2.3.1
0
2.3.1
1
2.3.1
2
Youth,Gender and Social Services
Development
Land,Housing ,Environment and
Natural Resources
174,080,000
69,616,031
104,463,969
40.0
69,020,000
27,948,522
41,071,478
40.5
295,000,000
277,883,415
17,116,585
94.2
County Assembly
199,562,999
14,964,030
184,598,969
7.5
3
Budget Surplus=1-2
324,918,400
165,108,633
2.2.9
2.2.1
0
2.2.1
1
2.2.1
2
2.2.1
3
2.3 DEVELOPMENT
56
Page 9
The revised budget approved by the County Assembly for the financial year 2014/15 was for Kshs
5,190,313,940. The recurrent and development expenditures were 54% and 46% of the total budget
respectively. Total expenditures for personnel emoluments amounted to Kshs.1, 467,745,232 translating
to 52.76 percent of the total recurrent expenditures and 28.27 percent of the total budget.
Revenues
The approved expenditures were to be financed from two main sources: the allocation from the National
Government and County own revenue. These were projected at Kshs. 4,058,551,882 and Kshs. 472
million respectively.
Performance of Revenue
As at the end of January 2015, cumulative revenue (both national and local) receipts amount to Kshs.
2.8 billion against a target of Kshs. 5.1 billion translating to 54 percent of the set target.
The fair performance has been mainly supported by timely disbursement of revenue from National
Government. To date, no donor financing has been released but it is expected that the rest of the
allocation from National Government will be disbursed on time.
Low collection of revenue was due to delay in enactment of the Finance Act 2014, delayed deployment,
reorganization and placement of staff, effects of change in administration and limited resources for
supervision. All these challenges are being addressed and the revenue performance is expected to
improve for the rest of the financial year. To this end, performance targets and reward schemes have
been developed to reward good performance.
Expenditure Performance
The County recorded a performance (excluding commitments) of 47 percent of the approved
expenditures on Recurrent and 56% on Development for the first seven months of the financial year.
The recurrent expenditures were within the set targets.
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Fiscal outlook to end June 2015
Expenditures
As per the PFM Act 2012, the budgetary ceilings set by the CRA in conjunction with the OCOB; the
county complied with the requirements set out for the preparation of Programme Based Budget of
2014/2015 and has been able to work within the set programmes. We anticipate saving on recurrent
expenditure which will be rolled to the next financial year to fund development.
Revenues
Despite the low performance of revenues, the county remains optimistic that the revenue target for
financial year 2014/2015 will be met. This is based on the trend on collection of revenue for the first half
as illustrated in Diagram 1 below. The allocation from National Government is expected as per the
County Allocation of Revenue Act, 2013.
Diagram 1:Performance of revenue July – Jan 2015: (Kshs Millions).
In July the County never received any funding from the exchequer due to delayed budget preparation
and hence its execution.
To overcome the challenges of revenue shortfall against expenditure pressures, the county will step up
efforts on collection of revenue. Some of the measures put in place include enhancing collections arrears
particularly in the areas of cess collections in form of unremitted cess, improvement of parking sites and
enhancement of property rates collection. In addition, automation of revenue collection is on an
advanced stage.
The County shall further rationalize some expenditure so as to create savings for the additional
expenditures. Specifically, most recurrent expenditure shall not be increased except of the annual
increment in wage bill and to cater for new recruitments where there is need. The additional funding
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requirement on development expenditures will be met through reallocations from programs with low
absorption capacity which shall not adversely affect the priorities intended to be achieved by the budget.
Budgetary challenges encountered in the current year (2014/2015).
The implementation of this budget was not without challenges. During the period under review, the
following challenges were encountered;
-
Delays in the disbursement from National government.
-
Shortfall in collection of local revenue more specifically on cess where the rates are pending
approval upon receipt of stakeholders’ input.
-
Budget implementation started at slow pace in the early months of the year as the staff in the
various ministries and departments were learning on the programme based budgeting
-
Unclear devolved functions due to lack of specific guidelines on devolved functions.
-
Public expenditure pressures especially on recurrent expenditure thus limiting the continued
funding for development expenditure.
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Strategic Priorities over the Medium Term
Budget estimates for the FY 2014/2015 and over the Medium Term, shall be based on the priorities
outlined herein which are guided by the County Integrated Development Plan (CIDP) and aimed at
accelerating growth, employment creation, poverty reduction and security.
The County fiscal policies will remain supportive of growth while at the same time continuing with the
fiscal discipline to ensure mobilization of adequate revenue to support the county expenditures.
Main areas of intervention over the medium term will include:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
Agriculture and rural development – Agriculture, Livestock, and Fisheries Development.
Roads, transport and public works – Infrastructure, mainly on roads and water
Supporting Investment and Trade
Security
Provision of Health and Sanitation Services
Provision of Water and Spring/water catchment protection.
Lands and Environment – Energy, Lands, forestry and Wildlife, Research and Development.
Public Service
Tourism development – identifying and developing existing tourist attraction sites.
Promotion of Education, Research and Vocational Training
Boost Agricultural Productivity
Investing in Agricultural sector not only promotes economic growth but also ensures food security, job
creation, income generation and overall poverty reduction. The sector is the mainstay of the County
economy with linkages in manufacturing, distribution and other service related sectors. The County
therefore aims at raising agricultural productivity and increase commercialization of agriculture. This
will be achieved through improvement of land use and crop development, enhanced accessibility to
affordable farm inputs, adding value to agricultural produce and link the farmers to markets for their
produce, extension services, use of environmentally friendly products, promotion of agro based
industries and development of post - harvest farm management systems.
Continuing Investment in Infrastructure
Infrastructure is key in achieving investment, increased production, access to essential services and
overall economic growth.
The County will address infrastructure challenges by accelerating ongoing infrastructure development in
maintaining and rehabilitating infrastructural facilities so as to improve efficiency and effectiveness of
the infrastructure development process at all levels of planning, contracting and construction.
This will be achieved through continued provision of resources to support provision of energy, roads,
Information Communication and Technology etc. This will ensure increased Private sector participation
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in the relevant sectors with the Public Private Partnerships Legislation further improving investment
climate, productivity and competitiveness.
Priority programmes in this sector include: Rehabilitating rural access roads, Road Network expansion
and upgrading programme, maintenance of existing road network, developing new and renewable
energy technologies, and Develop ICT infrastructure.
Supporting Investment and Trade
Trade is a key productive sector due to its immense potential for wealth and employment creation as
well as poverty reduction. Given its catalytic effect to sustained inclusive growth and huge potential for
job creation and poverty reduction, the County Government will deepen business regulatory reforms,
facilitating capacity building, simplifying and modernizing regime for small and medium businesses in
order to amplify their multiplier effect on employment opportunities and accelerating growth.
Further, the county will focus on industries that are labour intensive, with the potential to expand and
increase market opportunities for small and medium industries.
Strategic efforts will be made to diversify markets by providing an environment conducive for business
and ensuring that there is investor confidence. This will be achieved through development of policy,
legal and institutional reforms for the development of the sector, support entrepreneurship and industrial
development and promote exports. In addition specific measures will be undertaken to provide
incentives to both local and international investors in order to position Nandi County as the premier
investment hub in the country. Other measures will include maintaining law and order and providing
security.
Local businesses will be promoted through promotion of agro-based industries, training of entrepreneurs
and enhanced licensing of businesses. To this end, the upcoming investment shall play a crucial role in
showcasing Nandi County as a preferred investment hub and destination.
Security Programme
Security is a foundation for stability, individual social welfare and economic development by creating
investor and business confidence. The county will coordinate with the national government with a view
to improving this area. The programme is expected to enhance the provision of efficient and effective
services to the people of Nandi and facilitate an enabling environment for other sectors to thrive in.
Provision of Health and Sanitation Services
In line with Vision 2030, the county shall ensure provision of equitable and affordable healthcare at the
highest affordable standards. In the medium term, the County government will seek to address health
related challenges through continued investment in training of health professionals, providing high
quality preventive, curative and rehabilitative healthcare services to all, sanitation infrastructure and
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improvement in the working conditions of medical practitioners. Emphasis will be laid to preventive
health which is crucial for the control of diseases.
Achievement of this will involve construction and upgrading of health facilities, and procurement of
medical inputs, management of childhood illnesses through sensitization and provision of immunization
services and create awareness through campaigns.
Provision of water and Sanitation
The County Government will ensure increased access to water through expansion of the existing water
schemes, construction of dams along permanent rivers and seasonal rivers, purification and desalination
of water and development of water storage capacity in form of construction and supply of tanks and
finally ensure sanitation improvement.
Maximizing the use of the County's Natural Resources
Efficient use of natural resources is central to economic social and cultural development. Due to the
finite nature of these resources they should be conserved and utilized in a sustainable manner. The
County shall undertake strategies aimed at conserving the environment and natural resources and also
ensure provision of reliable and affordable energy through exploration of environmentally friendly and
renewable energy sources; and rehabilitation and protection of water resources.
Public Service
The County will promote best labour practices in recruitment, allocating, motivating and effectively
utilizing human resources for improved public service delivery and promote public service integrity.
Promotion of Tourism and Culture
The county Government put in place strategies to develop tourism infrastructure that can serve both
local and international visitors. This will include improving the quality of tourism facilities and
developing areas with greatest potential to attract tourists. Such programs include rehabilitation of
existing sites, construction of monuments of our heroes and heroines, marketing the existing tourism
attractions and promoting our cultural heritage including sports. Some of the initiatives already put in
place like the Kamatargui conservancy, the Kapsabet stadium etc shall be fast- tracked.
Promotion of Education, Research and Vocational Training
Over the medium term the county shall endeavor to increase access to quality early childhood education
through subsidized cost of education, and training of the staff. The county will also direct resources
towards renovations of ECD centers in rural areas and village polytechnics, ensuring improved and
effective youth participation in all structures of decision making and establishing project management
committees. The County Government shall move with speed to complete the already started ECDE
classrooms constructions.
Page 15
Medium Term Fiscal Framework
Improvements recorded by the National Government inform of easing of inflation, lower interest rates
and stable exchange rates are expected to spill over to the county inform of improved economic growth
with the national growth projected at 5.8%, 6.4% and 7% in 2014, 2015 and 2016 respectively. The
recent trends noted on the reduction of fuel prices is expected to result into multiple benefits especially
reduction in farm inputs and thus improved food security and income.
Revenue Projections
The County’s sources of revenue include:

Equitable share
The equitable share is an unconditional allocation to the County Governments from the revenue
generated by the National Government as provided for by the constitution. The County is fully
responsible for these funds and is directly accountable to the County Assembly on how the resources
under her control are spent.
Equitable share from the National Government is estimated at Kshs. 4,640,399,187
during the FY 2015/16. This is derived from the draft Budget Policy Statement and will
be firmed up when the BPS is finally approved by the National Assembly.

Conditional and Unconditional grants:
These may be given as additional allocations from the National Government's share to
which the National Government may or may not attach conditions in the FY 2015/16.

Own revenues
The county shall impose property rates, entertainment taxes, as well as other tax and user
fees and charges as they shall be approved by the County Assembly.
The County own revenue is projected at Kshs. 350.2 million. This is based on the current
trend of revenue collection and other revenue measures to be instituted. Total revenue
available to fund the expenditure is therefore projected at Kshs. 5.296 billion in FY
2015/16 increasing to Kshs. 5.825 billion and Kshs. 6.408 billion in FY 2016/2017 and
FY 2017/2018 respectively.
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Expenditures
Recurrent expenditures
Kshs. 2.914 billion is projected to be spent on Recurrent Expenditures in the FY 2015/2016 and Kshs.
2.380 billion on development translating to 55% and 45% respectively.
Recurrent expenditures are projected to increase to Kshs. 3.166billion and Kshs. 3.487billion in FY
2016/17 and FY 2017/18 respectively. This translates to 51 percent of the total budget, reducing by
2percent in FY 2016/17.
Development expenditures
Total development expenditures shall account for 45 percent in FY 2015/16 increasing to 49 percent in
FY 2016/17. These expenditures will go towards implementation of the county development programs
as indicated earlier. The outturn below provides the projected County Resource Envelope for FY
2015/2016 and subsequent years:-
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MEDIUM TERM FISCAL FRAMEWORK FY 2015/16, 2016/17 to 2017/18
Printed
Estimates
2014-2015
1
TOTAL REVENUE
1.1 National Government Allocation
Medium Term Projections
2015/2016
2016/2017
2017/2018
4,785,232,340 5,296,215,737 5,825,837,310 6,408,421,041
4,313,232,340
4,946,015,737
5,440,617,310
5,984,679,041
4,058,551,882
4,640,399,187
5,104,439,106
5,614,883,016
1.1.2 Loans and Grants -CRA
120,799,558
144,959,470
159,455,417
175,400,958
1.1.3 Rural Electrification - CRA
133,880,900
160,657,080
176,722,788
194,395,067
1.1.4 Level 5 hospital
-
-
-
-
1.1.5
-
-
-
-
472,000,000
350,200,000
385,220,000
1.1.1
Equitable share
Donor Financed
1.2 Own revenue
2
TOTAL EXPENDITURE
2.2 RECURRENT
423,742,000
5,190,313,940 5,294,339,498 5,784,548,581 6,367,862,015
2,782,150,941 2,914,136,998 3,166,325,831 3,487,816,990
2.2.1 COUNTY EXECUTIVE
Devolved units and Special
2.2.2 Programs
Finance and Economic Planning and
2.2.3 ICT
263,357,000
385,601,256
389,457,269
79,415,000
50,230,600
50,732,906
55,806,197
638,674,202
515,060,145
566,566,160
623,222,775
2.2.4 Agriculture, Livestock and Fisheries
2.2.5 Training
243,439,052
160,500,420
176,550,462
194,205,508
91,214,400
160,145,230
176,159,753
193,775,728
2.2.7 Investments
Roads, Transport ,Infrastructure and
2.2.8 Public Works
693,782,000
845,608,430
930,169,273
1,023,186,200
52,940,017
30,469,526
33,516,479
36,868,126
159,482,952
100,400,256
110,440,282
121,484,310
433,261,571
Page 18
2.2.9 Youth, Gender and Social Services
2.2.10 Development
Land, Housing ,Environment and
2.2.11 Natural Resources
73,674,000
45,600,200
50,160,220
55,176,242
27,149,000
27,420,490
30,162,539
33,178,793
50,266,372
45,600,245
50,160,270
55,176,296
2.2.12 Public Service and Labour
44,996,000
36,500,200
40,150,220
44,165,242
2.2.13 County Assembly
363,760,946
511,000,000
562,100,000
618,310,000
2,380,202,500
2,618,222,750
2.3 DEVELOPMENT
2,408,162,999
2,880,045,025
2.3.1 County Executive
Devolved units and Special
2.3.2 Programs
Finance and Economic Planning and
2.3.3 ICT
Agriculture and Livestock ,Vetinary
2.3.4 Services and Fisheries
2.3.5 Training
206,080,000
190,140,800
209,154,880
230,070,368
114,400,000
81,500,000
89,650,000
98,615,000
49,020,000
189,510,200
208,461,220
229,307,342
138,330,000
80,600,000
88,660,000
97,526,000
168,400,000
100,500,000
110,550,000
121,605,000
2.3.7 Investments
Roads, Transport ,Infrastructure and
2.3.8 Public Works
364,250,000
417,892,500
459,681,750
505,649,925
89,020,000
89,910,200
98,901,220
108,791,342
541,000,000
546,410,000
601,051,000
661,156,100
2.3.9 Youth, Gender and Social Services
2.3.10 Development
Land, Housing ,Environment and
2.3.11 Natural Resources
174,080,000
175,820,800
193,402,880
212,743,168
69,020,000
49,710,000
54,681,000
60,149,100
295,000,000
347,650,000
382,415,000
420,656,500
2.3.12 County Assembly
199,562,999
110,558,000
121,613,800
133,775,180
3
1,876,239
362,021,628
40,559,027
Page 19
In 2015/2016 we anticipate spending highly on Health and Sanitation with an allocation of 24% of the
total expenditure followed by Roads and infrastructure with 12.2% the least being the department of
Public service and labour whose allocation is approximately 1%.
Note;
The ceilings for the County Assembly and County Executive on Recurrent expenditures are
varying subject to Commission on Revenue Allocation Ceiling in consultation with the Office of
the Controller of Budget recommendations in respect to the FY 2015/2016 and its subsequent
years in the Medium Term Expenditure Framework.
Criteria for Resource Allocation
Overall, the expenditure projections are based on the following principles:

Mandatory obligations: this takes first consideration and includes salaries for County
officers. The expenditures are based on the current wage bill with a growth of 5% to take
care of any pending recruitment that may be deemed necessary in the course of the
financial year.

Operations and maintenance: Departments are allocated funds for basic operations and
maintenance calculated at 30% of the total personnel emoluments.

Development expenditure: Development expenditure will be funded from the equitable
share of the national revenues and locally obtained revenues. Development expenditures
are shared out on the basis of the County Integrated Development Plan, the Governors
manifesto and other intervention to deal with unemployment and remove constraints to
faster growth. In determining the departmental ceilings on development expenditure, the
following guidelines shall apply:
 Completion of on - going Programs and projects: emphasis will be given to the
completion of the on-going projects and in particular projects with high impact on key
priority areas, poverty reduction, employment and wealth creation.
 Strategic policy interventions: Priority will also be given to policy interventions to
achieve social equity, environmental conservation and other priority areas.
Page 20
Assumptions
1.
That the National Assembly and Senate shall approve the equitable allocations as
proposed by CRA
2.
There shall be political stability in the Medium Term.
3.
The Economic trend both locally and internationally shall be sustained.
4.
The County shall experience/enjoy stakeholder support through the period of projection.
5.
Costs to services shall be maintained at reasonable levels.
CONCLUSION
The fiscal framework presented in this paper ensures a sustainable financing while allowing continued
spending on priority programmes. Achievement of the set objectives calls for greater transparency,
effectiveness, efficiency and economy in public financial management in order to ensure fiscal
discipline. In future, while addressing the development needs of the people of Nandi, emphasis shall be
on the priorities as laid out in the C.I.D.P for both short term and Medium Term expenditure/planning
framework.
Further, emphasis shall be accorded to areas considered as priority by the residents of Nandi as fronted
through public forums, recommendations and memoranda.
The County Treasury, in all these, shall continue to discharge his responsibility as spelt out in the
constitution and the PFM Act and any other laws on Public Financial Management that may come into
play from time to time.
Page 21

Nandi County Fiscal strategy paper 2015

Transcription

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