Department of Finance and Economic Planning

COUNTY GOVERNMENT of nakuru

DEPARTMENT OF FINANCE AND ECONOMIC PLANNING

MEDIUM TERM

COUNTY FISCAL STRATEGY PAPER

Economic excellence

FEBRUARY 2014 ii Foreword This is the first County fiscal strategy paper (CFSP 2014) by Nakuru County Governmentsince March 4th 2013 general election,it sets out the County priority programs to be implemented in the Medium Term expenditure Framework (MTEF) under the new governance structures of devolved governments.Its is framed against a backdrop of the devolved functions as per legal notice 16 and 157 of 2013 in Kenya gazettein compliance with 4th schedule of the constitution.

Nakuru County economy like its populace is diverse which makes it strong and vibrant.On this account growth remained resilient in 2013, with the county witnessing increased economic activities including exploration and exploitation of geothermal energy, a robust construction industry, increased hospitality services supported by opening of more hotels, expansion in the horticultural sector, increase in sports tourism covering rugby,golf and football .Thisin recent timehas seen Nakuru town the County headquater christened the fastest growing town in Africa. There are however challanges that continue to hold our economy back from achieving its full potential. Through the County fiscal strategy paper which is mirrored to the Budget policy statement by the National government we are adressing these challanges and building on our strengh as a basis for creating economic excellence.

The strategy for economic excellence covers five broad areas (i) Creating an enabling environment for business in order to encourage investment growth and expansion of economic and employment opportunities (ii)Development of key infrastructure facilities including roads, water, energy, ICT countywide to stimulate growth, create employment and reduce poverty (iii) Promotion of health services (iv) Promotion of value addition for agricultural produce, environment management and food security (v) Promotion of equitable county and social development for stability (vi) Enhancing governance, transparency and accountability in the delivery of public goods and service.

The county fiscal strategy paper sets out the background and broad fiscal parameters for the 2014/15 budget and the medium-term, consistent with National governmentpriority programs,strategies and policies. The CFSP 2014 is prepared taking

iii into account resources decentralised by the national government for devolved functions, in addition to County potential of generating revenue from local sources as conteplated by article 207 of the constitution . The ensuing MTEF resource allocation therefore will be critical in laying the foundation and setting the stage for full operationalization of the devolved functions for Nakuru County.

iv Acknowledgement This is the first County fiscal strategy paper(CFSP) to be tabled in the county assembly under the Public finance management act 2012. It outlines the broad strategic and economic issues and framework together with county government spending plans as a basis of 2014/15 budget and medium term. We expect the document to enhance the understanding Of Nakuru county public finances and guide public debate on economic and development activities.

The preparation of the county fiscal strategy paper is a collaborative effort. Much of the input is borrowed from the national government budget policy statement, county department through the C.E.Cs and his excellency the Governorpolicy statements.We are grateful for comments from the macro working groups and public sector hearing in february 2014, in addition to comments from commsion for revenue allocation and other stakeholders.

A core team in the county treasury spent a significant amount of time putting tegether this paper. We are particulary greatful to the Chief officer Finance and economic planning Mr P.K Torome, head of budget supplies Mr charles lwanga, Mrs Beatrice Ndhiho budget supplies and controller of budget, Mr Philemon Ronoh for coordinating the execution of this task. Special thanks goes to Mr David Tambo from the Ministry of devolution and planning who through constant consultations and input guided the document preparatory stage.I would like to take this opportunity to thank the entire staff of the County treasury for their dedication and commitment.

FRANCIS MATHEA

C.E.C FINANCE AND ECONOMIC PLANNING

v Contents Foreword...... iii

Acknowledgement...... v

Legal Basis for the Publication of the County Fiscal Strategy Paper...... ix

Responsibility Principles in the Public Financial Management Law...... x

I. ECONOMIC EXCELLENCE...... 1

Background...... 1

Programs for achieving economic excellence...... 3

Strategic priority I: Creating an enabling environment for business...... 3

Strategic priority II: Development of key infrastructure facilities including feeder roads, water, energy, ICT countywide to stimulate growth...... 4

Strategic priority III:Promotion of health services through investing in quality and accessible health services...... 5

Strategic priority IV:Promotion of value addition for agricultural produce, food security and environment management...... 6

Strategic priority V: Promotion of equitable economical and social development for county stability...... 7

Strategic priority VI: Enhancing governance, transparency and accountability in the delivery of public goods and service by promoting public partication as enshrined in the constitution...... 8

II RECENT ECONOMIC DEVELOPMENT AND POLICY OUTLOOK IN 2013/14...... 11

REVIEW OF FISCAL PERFORMANCE IN 2013/14...... 11

County Revenue...... 11

Locally Collected Revenue...... 11

Exchequer Issues...... 13

County Budget Expenditure...... 13

Total County Expenditure...... 14

Economic Classification of County Expenditure...... 14

Update on Fiscal performance and Emerging challenges...... 15

Implementation of 2013/14 budget and Emerging fiscal challanges...... 16

vi 2013/14 Supplimentary estimates...... 17

National Growth Update...... 18

III FISCAL POLICY AND BUDGET FRAMEWORK...... 20

Overview...... 20

Observing Fiscal Responsibility Principles...... 21

Fiscal structural reforms...... 21

Deficit Financing Policy...... 22

2014/15 Budget framework...... 22

Revenue projections...... 22

Expenditure Forecasts...... 22

Development expenditure...... 23

Overall deficit financing...... 23

IV INTERGOVERNMENTAL FISCAL RELATIONS...... 24

County Budgets and the Transfer of Functions...... 24

Resource Available Equitable shares...... 24

Additional resources...... 24

V:MEDIUM-TERM EXPENDITURE FRAMEWORK...... 28

Spending Priorities...... 28

Baseline ceilings...... 33

Details of Sector Priorities...... 34

VI. CONCLUSION AND NEXT STEPS...... 42

ANNEX TABLE 1...... 43

ANNEX TABLE 2...... 45

ANNEX TABLE 3...... 47

ANNEX TABLE 4:...... 49

vii Abbreviations and Acronyms

BSP Budget Policy statement

CBROP County budget review outlook paper

CFSP County fiscal stategy paper

CPID County intergrated development plan

CSWGs County Sector Working Groups

DF Deficit financing

FIF Facility improvement funds

FY Financial Year

LR Local revenue

KISSIP Kenya informal settlement infrastructural programme

MDG Millennium Development Goals

MTEF Medium Term Expenditure Framework

PERs Public Expenditure Review

PFM Public Financial Management

PPP Public Private Partnership

viii Legal Basis for the Publication of the County Fiscal Strategy Paper

The County fiscal strategy paper is prepared in accordance with Section 117 of thePublic Financial Management Act, 2012. The law states that: (1) The County ,Treasury shall prepare and submit to the 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 the 28 th February of each year.

(2) The County Treasury shall align its County Fiscal Strategy Paper with the national objectives in the Budget Policy Statement.

(3) 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.

(4) The County Treasury shall include in its County Fiscal Strategy Paper the financial outlook with respect to county government revenues, expenditures and borrowing for the coming financial year and over the medium term.

(5) In preparing the County Fiscal Stfategy Paper, the County Treasury shall seek and take into account the views of

(a) the Commission on Revenue Allocation;

(b) the public;

(d) any other forum that is established by legislation.

(6) 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

ix Responsibility Principles in the Public Financial Management Law In line with the Constitution, the new Public Financial Management (PFM) Act, 2012,sets out the fiscal responsibility principles to ensure prudency and transparency inthe management of public resources. The PFM law (Section 107(b)) states that: The county government’s recurrent expenditure shall not exceed the county government’s total revenue Over the medium term, a minimum of 30% of the County budget shall be allocated to development expenditure The County government’s expenditure on wages and benefits for public officersshall not exceed a percentage of the County government revenue as prescribedby the regulations. Over the medium term, the County government’s borrowings shall be used onlyfor the purpose of financing development expenditure and not for recurrentexpenditure. Public debt and obligations shall be maintained at a sustainable level as approved by County Government (CG) Fiscal risks shall be managed prudently A reasonable degree of predictability with respect to the level of tax rates and taxbases shall be maintained, taking into account any tax reforms that may be madein the future

x I. ECONOMIC EXCELLENCE

Background This County fiscal strategy paper (CFSP)is the first to be prepared under the Public Financial Management Act, 2012 within the devolved units of County Governments. In line with the law, the CFSP sets outCounty priority programs to be implemented in 2014/15and the Medium Term expenditure Framework (MTEF).

The updated National economic outlook has been firmed up in the firstCFSP to reflect changes in Global andNationaleconomic and financial conditions. Due to the need to finalise the CFSPafter the release of the National Budget policy Statementin 15 February of 2014, the first CFSP will be submitted to County Assembly by 28 February 2014 in time for the deadline under the PFM law.

Since assuming office in,March2013, the County Government has been determined in steering our county forward through the turbulent seas of devolution uncertainty. In doing so, we have made bold and strong decisions, to request for devolution of majority of functions under the 4th schedule of the constititution. Nakuru county has audious task of improving the delivery of services for the devolved functions through maintaining a sustainable fiscal policy framework.

This stance has meant that over the 2013/14 financial year, County Government has been laying the foundation for the acheiving vibrant economic growth to adress the needs of its inhabitants and winning their confidence. These achievements will serve to boost the public confidence in County Government’s abilities to maintain and build upon stability that is clearly becoming evident amid the difficult environment encountered in the initial phase of devolution.

Recognising the enormous resources and potential that the county has in tourism,sports agriculture, energy, minerals,forestry protends a huge potential for investors which will be a key driver of the county economy. The County Government has continued to support the investment ininfrastructure to compliment this sectors. This is to ensure the economy and all those who participate in it reap the benefits from the enormous resources

1 The framework upon which to build an economic excellence agenda is now in place.However despite the progress made thus far contrasting challanges remain. The challenge of depressed local revenue outcome of the second half of 2013 and the inflational trend arising from the national government policies continue to be a concern for the county government.Expenditure pressures with respect to salary demand of devolved functions including health agriculture,trade and water sectors continue to persist, and so are operational demands for thse sectors hence impacting negatively on the county development agenda. Recent development in the flowers sector, in particular the placement of Karuturifarm previously the largest producer and exporter cut flower under receivership has caused jitters in the industry within the county. This may be agrievated by lack of Economic partinership agreement between kenya and the european union to ease entry for flower export. Insecurity , weak transport and logistics, high cost of energy as mirrored from national challenges will continue to strain the economy from achieving its optimal potential.

The broad strategic priorities for Budget 2014/15 build on the achievements of the County Government to dateby directing public spending to encourage growth and complement private sector investment. Takingthe County intergrated development Plan (CIDP) as a point of departure, the County Government is certain that the broad strategic priorities for 2014/15 will provide a framework which protects our fiscal position and supports inclusive sustainable growth. Our broad strategic priorities for attaining economic excellence include:

a) Creating an enabling environment for business in order to encourage investment growth and expansion of economic and employment opportunities b) Development of key infrastructure facilities including feeder roads, water, energy, ICT countywide to stimulate growth, create employment and reduce poverty c) Promotion of health services through investing in quality and accessible health services d) Promotion of value addition for agricultural produce, environment management and food security. Through revival industries including pyrethrum, potato processing plant, dairy product cooling plants, promotion of producer cooperative soceties and provision of agricultural extension services. e) Promotion of equitable economical and social development for stability 2 f) Enhancing governance, transparency and accountability in the delivery of public goods and service by promoting public partication as enshrined in the constitution

In deciding on these priorities, County Government acknowledges that there is hard work ahead inimplementing these policies and doing so is in everyone interest we all gain. Our objective is inclusivesustainable growth.

This county fiscal strategy paper therefore articulates priority economic policy as well as sectoral expenditure programs to be implemented under the Medium expenditure framework for 2014/15-2016/17 in order to a chieve the county Government developmental goal of economic excellence

Programs for achieving economic excellence

Strategic priority I: Creating an enabling environment for business

Tax and revenue reforms

Fundamentally the focus of county government will be underpinned by the ongoing reforms in tax policy and revenue administration.To help achieve this central objective a key proposal is to leverage on automation for key revenue collection points and items including parking fees, building plan approval, mutations and land rates collections.The county has since acheive a milestone in reforming revenue administration by going cashless in a strategic partnership with banks which has seen them dedicate special counters for payment county charges. The county strategy for strenghtening revenue efforts will be complimentated by the ease of obtaining licenses hence doing business through the intial consolidation of the numerous charges for business people.Harmonization of taxes is the hallmark of the reforms while retaining the taxes at the current level and creating a one shop stop for business licenses. New taxes are proposed in line with the devolved functions including tourism, betting and casino licensing, liquor licensing, county parks entry fees and mineral royalties. In the same vein the county government is putting in place a strong strategy for revenue administration. The first part of this strategy is to ensure minimal loss of revenue collected through corrupt practices by existing cartels. The second part is to improve the administration efficiency which in effect guarantees maximum collection and remittance of revenue to the county coffers.

3 Rationalization of inter- county taxation provision

In respect to the power of the county to impose taxes and other revenue raising measure Nakuru county will ease mobility of goods from other counties be accompanied by movement permits to augment Article 209(5) of the 2010 constitution

Complimenting National government security for sustained growth and employment A secure environment is the foundation of national development efforts.Security is also central to stability and encouraging investments, accelerating growth and in turn creating employment, especially for the youth. The county government will in this respect compliment the national government effort through estabishing the county policing authority with membership drawn from within the county. The effort of the county toward complimenting the national government over the medium term entails among others the following

a. Expansion of are of coverage of streetlighting to include market centres outside major urban centres

b. Complimenting national government effort by investing in security infrastructure such as police post.this initiative will be expanded in the medium term to include provision of vehicles

c. Developing regulation and guidelines for installation of intergrated closed circuit television(CCTV) system for building in urban areas.

d. enhance the development of strategic police and community partnerships and the implementationof smarter crime prevention initiatives to address crimes of concern; e. strengthen the investigative capacity of the Police to ensure that those who have committed crimes will be brought to justice

Strategic priority II: Development of key infrastructure facilities including feeder r oads, water, energy, ICT countywide to stimulate growth

The County Government has made significant investments in infrastructure and has laid the foundation forcontinuation and actual rollout of development in 2014. To ensure resilience, our investments ininfrastructure will take into take into consideration disaster risk mitigation and climate changeimplications. Therefore focus in infrastructure development will be to: 4 Continue investing extensively in infrastructure that will contribute to not onlyeconomic growth but also to improving the livelihoods of our people. In this financial year, the feeder roads, installation of streetlights in towns and major centres and water upgrade within the county is currently being implemented. lay ground work for improvements to water for Nakuru county which is well underway with actual delivery commencing in 2014. This will address not only reticulation around the county, but alsoupgrade intakes and improve the quality of water to our people. In addition, the sinking of the water borehole will bring relief to many households in different parts of the county. Laying the necessary foundations for delivery has been the focus in 2013 for fullimplementation in 2014. This will not only improve water supply and quality but also build theresilience of our communities to the adverse impacts of climate change.Furthermore, we have started phase one of the storm water drainage and sanitation upgrade for selected towns in the county.

In renewable energy, exploration and exploitaion of geothermal power is under way in nakuru and naivasha sub counties.To enhance information flow and connectiviity the county is in the process of rolling out a 10km radius connecivity through WIFI for internet users as part of jubilee manifesto of going digital

To suppliment our efforts world bank funded project dubbed KISSIP is due to take off in 2014 this will help solve the perenial storm water drainage and will target nakuru west subcounty in kaptembwaand naivasha sub countya total of kshs will be injected in the project. we have successfully hosted a numberof key stakeholders meetingthrough the support of the world bank.

The County Government acknowledges that its agencies must be better coordinated to deliver on infrastructuredevelopment. In this regard, the County Government will complete the formulation of the Infrastructure MasterPlan to be launched in 2014 and launch the Infrastructure Investment Plan which will outline the roll out ofpublic infrastructure for the medium to long term. Furthermore, we will support the up skilling and capacity building of our people in the infrastructure sector and will foster the training of local counterparts in the development and management of our public asset

Strategic priority III:Promotion of health services through investing in quality and accessible health services

The strategy for human capital development entails getting more value out of current 5 spending,improving equitable access to quality healthcare throughout the county Building a heathier County A healthy population is essential for higher productivity and sustained longterm development of a nation.We have achieved notable progress, especially in controlling communicable diseases (tuberculosis,HIV/AIDSandmalaria) and attaining marked decrease in childmortality, but other health challenges associated with affluence and accidents are emerging–putting pressure on our healthcare system.The aim of County Government policy reforms is to enable all Kenyans access to modern and well- equipped health facilities and welltrained and motivated healthcare workers.

The County government working with the National Government and other partners, will implement a second generation healthcare reform strategy involving; recruitment of more healthworkers, expansion of training facilities, development of systems to support and expand healthcare services and sanitation at the community level. A program for health care in frastructure upgrade and equipment modernization, especially through leasing, will be implemented. The County government will also finalize the development of a health policy and institutional and legal framework for enforcement of healthcare standards. Inadditional efficient, effective and accountable framework for the management of public resources and medical supplies at the facility levels will be put in place.

The county will undertake the decentralisation of health facilities to lowest level including decetralisation of health worker to those falities

Strategic priority IV:Promotion of value addition for agricultural produce, food sec urity and environment management.

Value addtion in agriculture and food security Prioritizing investments in agriculture is central to the County and Kenya‘s economic excellence and transformation. Investing in agricultural reforms and transformation will spur an inclusive economic growth with knock-on effects on related sectors of agro- processing; storage and transport; wholesale and retail; construction; financial services as well as export diversification and growth. In addition, expanded agricultural output will increase foodsupply, reduce food related prices and bring down the cost of living, create employment and promote overall rural development and improve the economic welfare of county residents and Kenyans. The strategy focuses o n necessary inputs, machinery, technical know-how and 6 supervision on standards, as measures to increase agricultural productivity and crop yield, anchored on access to market and adequate financial and technical resources- the central pillars of a functional agriculture value chain, which is necessary to transform agriculture into a business venture. The county government on assuming office embarked on strategizing on how to revive the pyrethrum sector which will see farmer embarks on growing of the crop which was the main stay of the county economy in the past in addition to other crops including revival of potato cooling plant. Agricultural resources will be prioritized for investment in key infrastructure, including training facilities, curriculum development, produce handing, storage, agro- processing and value addition facilities, access roads .

Environment management The fundamental question of ‘how do we best manage and maximise our natural resources to benefitour people and economy in the long run’ must always be considered in the development process. In thisregard, the 2014/15 financial year will be one of taking stock of the value of our natural resources andtailoring our development to reflect present and future values with the objective of integratedsustainable development. This will ensure that there is a balance between the economic, social andenvironment pillars of our progress. Therefore in 2014/15, we will: a) determine the value of our natural resources through strengthening information and datacollection, analysis and dissemination; b) complete our state of the environment assessment; c) continue on the work required to operationalise solid waste management; d) explore options to incentivise the growth of eco-friendly and green initiatives, industries andbusinesses; and e) explore options of sustainable financing for conservation and environment management.

7 Strategic priority V: Promotion of equitable economical and social development for county stability

Improve the wellbeing of our people Our people are central to ensuring inclusive sustainable growth and must be active participants in ourdevelopment. In addition to our bold implementation of tax reform to encourage enterprise at thehousehold level, in 2014/15 we will: a) continue our investment in education with the implementation bursary programme at ward level b) continue to invest in health with the primary focus on prevention and promoting its linkages tonutrition, sports and physical activity; c) explore further options and mechanisms to ensure that those who need help the most will receivedappropriate support; and d) support initiatives that promote equity of opportunities for participation in the economy and societythrough our various grant instruments youth, and disabled.

Revitalise growth in the Nakuru county In the past the development of Nakuru county has been mainstreamed with national development. Whilstthe County Government recognises that this is important from a national development planning perspective,the unique needs of Nakuru county require a more targetted approach, with the respective County Government’s determining their development priorities and the Government and its agencies providingadequate support. This will be our focus in 2014/15. Areas of particular attention for support will be: a) growing Nakuru county economies; b) improving infrastructure to support the three pillars of sustainable development; c) building resilience in our county; d) improving social development outcomes; and e) to improve governance.

Strategic priority VI: Enhancing governance, transparency and accountability in t he delivery of public goods and service by promoting public partication as e nshrined in the constitution

Improve public service productivity County Government will continue to improve the performance of the public service with an emphasis on increased productivity, better use of existing resources and shifts in the composition of spending ratherthan raising overall expenditure. In 2014/15, Government will: 8 a) establish better human resource development and management frameworks across the County publicsector b) implement the recommendations of the controller of budget and salary and remuneration commision ; c) continue to consolidate administrative functions where appropriate; d) implement a more effective performance management system pursuant to section 47 of County government Act; e) reduce the cost of public administration; and f) improve information management, sharing and dissemination

Delivery of public goods and pulbic participation. The Government has a duty to broaden opportunities for our people to participate in the economy andbenefit from it. We are mindful that we have to take measures to distribute some of the benefits thatarise from growth so that all our people regardless of whether they are actors in the formal or informalsectors can say that, ‘this economy works for me’. The County Government wishes to accelerate its efforts in creating an environment conducive to economicgrowth, creation of wealth and diversifying the economy. Therefore the focus for implementation in2014/15 will be to: a) evaluate the role the public sector plays in enabling enterprise and facilitating growth with thepurpose of removing obstacles that hinder innovation and entrepreneurship; b) harness our rich cultural heritage, vibrant arts and untapped creative potential by organising trade fairs c) encourage public private partnerships where appropriate; d) concentrate efforts on supporting our people who are starting and growing businesses; e) continue to modify regulatory frameworks that stifle business and growth; f) implement a holistic tourism growth and marketing strategy that includes all subcounnties in Nakuru county; g) continue to support initiatives that will diversify our economic base by increasing productivity andencouraging innovation in cooperative societies, agriculture and the knowledge economy; h) continue to engage with telecommunications sector which will accelerate economic and social development and connectivity;

9 i) review our land tenure arrangements to find opportunities and enabling mechanisms that willsupport investors in adding economic, social and environmental value to theuse of land. j) Adoption of County Public participation policy and law.

10 II RECENT ECONOMIC DEVELOPMENT AND POLICY OUTLOO K IN 2013/14

REVIEW OF FISCAL PERFORMANCE IN 2013/14

During the period July to December 2012/2013, the main spending units of the County Government were the County Assembly, County Executive and Ministries. The main sources of revenue during the period under review were national government allocation (exchequer issues) consisting National grant and Local revenue.

County Revenue The total revenue that the County received was Kshs. 2,704,862,258.00 which was received from various sources

Figure 1: County Revenue Sources

Source: Central Bank of Kenya

Locally Collected Revenue Ministerial departments were the main revenue collectors of local revenue. Local Authority Integrated Financial Operations Management System (LAIFOM) was the main platform for recording the collected revenue. Eight (8) County Revenue Collection Accounts were opened across the Eleven (11) Sub Counties in the Nakuru County. All the revenues collected from these collections accounts are regularly swept to the County Revenue Account domiciled at Central bank. Table 1 shows the revenue analysis by department from July to December 2013.

11 Table 1: Revenue Analysis by Unit Revenue Source Total Collection (Kshs.) % of Collection FINANCE 37,349,191.00 10.7 TRADE 60,189,071.00 17.3 HEALTH 17,972,583.00 5. 2 EDUCATION 603,700.0 0. 0 2 LAND 106,924,895.00 30.7 AGRICULTURE 10,743,016.00 3. 1 ROADS 93,190,286.00 26.7 ENVIROMENT 21,624,485.00 6. 2 TOTAL 348,597,227.00 100.00

Source: County Treasury

Total revenue collection for the period was Kshs. 348,597,227.00. Ministry of land and Housing contributed 31 % of the total revenue collected during this period. Included in the fees and charges of this unit are, land rates which contributed 53 million, advertisement fee 11 million, inspection fee 4 million, among others. Ministries of Education, Youth, Culture and Social services contributed 0.2% of the total revenue, the lowest out of the 8 departments. The major sources of revenue for the Education department are Group registration, Social hire and School registration. It is expected that the County revenue would increase as from January 2104 since the finance Act has been passed accented to by the Governor to become a law. January through April is said to be boom period to the County as it is the period of licences and fees renewal.

Table 2: County Revenue Analysis by Month

Months Amount % of Collections MONTH TOTAL JULY 68,057,757.00 20 AUG 54,187,342.00 16 SEPT 58,916,954.00 17 OCT 61,823,670.00 18 NOV 59,487,340.00 17 DEC 46,124,164.00 13 TOTAL 348,597,227.00 100 Source: County Treasury

12 Table 2 shows the collection by various departments for the quarter. Figure 3 shows locally collected revenue per month. It can be observed that revenue collection has a downward trend with low collection during the month of August.

Figure 2: Trend of Revenue Collection

Source: County Treasury 2014

Exchequer Issues The exchequer issues to the County Government totalled to Kshs. 2,049,977,143 billion out of the total budget for the financial year 2013/2014, which is 58.7% of the total net estimates. The sum was released to the County in three batches as shown below:

Table 3: Exchequer Issues to Nakuru County Month Amount

July 97,483,673.00 August 75,500,000.00 September 504,586,076.00 October 672,406,000.00 November 700,000,000.00 December - Total 2,049,977,143.00

Source: Office of the Controller of Budget

During the period under review, all exchequer requisitions were funded. The challenges faced during exchequer issues include late disbursement of funds by the National government to the County, poor financial reporting framework by the County entities, slow IFMIS roll-out to the sub counties among others.

13 County Budget Expenditure The total expenditure by the County Government was Kshs 1,476,063,596.00. The spending units included County Assembly, County Executive and Ministries.

Total County Expenditure

Expenditure from County Revenue The total recurrent and development budget for FY 2013/2014 for all departments is Kshs. 10.04 billion. The total recurrent expenditure for the period under review cumulatively stood at Kshs. 1.76 billion which represents 14.3 per cent of the revised gross estimates.

Table 4: Comparison of Budget Estimates and Actual Expenditure DEPARTMENT Budget estimates Total Budget Balance % of (Kshs. 000 expenditure (Kshs.) budget absorption County 1,239,684,874.58 202,081,220.00 1,037,603,654.58 16.30 Assembly County 547,655,485.00 225,019,119.00 322,636,366.00 41.09 Executive Finance 1,251,716,311.00 306,776,448.00 944,939,863.00 24.51 Agriculture 408,227,065.00 34,382,360.00 373,844,705.00 8.42 Health Services 2,542,684,821.00 64,124,322.00 2,478,560,499.00 2.52 Education 727,384,677.00 55,231,019.00 672,153,658.00 7.59 Roads & Public 1,304,884,493.00 74,070,517.00 1,230,813,976.0 5.68 Works 0 Lands 247,476,901.00 21,414,582.00 226,062,319.00 8.65 County Public 974,354,816.00 453,699,485.00 520,655,331.00 46.56 service Trade 541,779,966.00 24,950,347.00 516,829,619.00 4.61 ICT 196,065,844.00 4,784,516.00 191,281,328.00 2.44 Environment 337,940,817.00 9,529,661.00 328,411,156.00 2.82 TOTAL 10,319,856,070.58 1,476,063,596.00 8,843,792,474.58 14.30

Source: County Treasury Table 4 compares the actual expenditure to the revised gross estimates for the FY 2013/2014. From Table 4, County Public Management Services and County Executives had the highest absorption rate at 46.56 % and 41.09 % respectively. Ministry of Health Services and Ministry of Information and E-Government recorded the lowest absorption during the period with a rate of 2.25% and 2.82 % respectively.

Economic Classification of County Expenditure Table 5: Economic Classification of Expenditure Description Total Total Expenditure Expenditure % (Kshs. 000) Personnel Emoluments 858,482,070.00 58.2 Operational & Maintenance 605,078,483.00 41.0 Development Expenditure 12,113,543.00 0.8 Total 1,475,674,096.00 100.0 14 Source: County Treasury

The Table 5 groups the total county expenditures for the quarter into three categories; i. Compensation of Employees; includes basic salaries paid to permanent and temporary employees and personal allowances paid as part of salary among other related costs.

ii. Operations/Use of goods and services; includes utilities, supply and services, domestic travel and subsistence, and other transportation costs, training expenses, hospitality supplies and services, routine Maintenance among other related cost. iii. Development expenditures

From Table 5, Compensation of Employees consumed 58.2 % of the total expenditure. Operations and Maintenance consumed 41.0 % while Capital Assets/ development consumed 0.8% of the total expenditure.

Figure 3: Expenditure Trend

Source: County Treasury Figure 3 shows that expenditures are tilted heavy towards payment of personnel emoluments was stands at over Kshs 854 million. There was a decline in expenditure on other economic variables. Expenditure on capital assets received the lowest amounts of 18 million. This also portrays the huge differences in expenditure patterns. A good budget and budget implementation framework that is backed up with procurement plans and cash-flow forecast minimizes the huge variances in expenditure patterns.

15 Update on Fiscal performance and Emerging challenges The fiscal and economic assumption underlying the 2013/14 budget entailed improved collection of revenue from local sources and timely disbursements of funds by the national treasury. The updated Economic framework is cautious given the weaker- thanexpectedrevenue performance in the first Half of 2013/2014 and delayed disbursement of funds Against this backdrop the County Government will continue with its policy of expenditure rationalization with a view to funding only core services and reducing costs through the elimination of duplication and inefficiencies.

County assembly approved initially approved the financial year 2013/ 2014 with a deficit balance. Included also was an expenditure of Kshs 371 million for Car grant and Mortgages to members of the County Assembly. This was revised following advice from the OCoB through members appropriation bill by virtue of section 131(4) (b) of the Public Finance Management Act 2012. The County budget for the fiscal year 2013/2014 is now balanced at a figure of Kshs 10.038 billion. This comprises kshs 7.7 billion of County government recurrent expenditure (including 3.3 Billion for personnel emoluments) development of kshs 2.7 billion and debt repayment of kshs 300 million. The expenditure are expected to be finance by total local revenue kshs 2.5 billion facility improvement fund of kshs 522 million, Equitable allocation from CRA kshs 5.9 billion, CRA conditional transfers to level 5 hospital of kshs 600million, and donor element of CRA allocation of kshs 424 million

the 2013/14 budget

Implementation of 2013/14 budget and Emerging fiscal challanges

Challenges in the movement to new IFMIS platform coupled will drawn out disbursement of C.R.A delayed implementation of the FY 2013/14 budget by almost ten weeks to october 2013. Initial transitional issues on the part of the national government delayed the enactment of the county allocation of revenue act majorly affecting timely disbursements to the counties .This has now been addressed and Countygovernment operations are continuing in earnest. However, expenditure pressures have emerged with salary and operational demands from the health and Agricultural sectors which were further devolved on 9th of August vide legal notice 157 of 2013.These poses risk to the stability of the budget for 2013/14 in the face of reduced revenue collection in the 1st half.

16 Revenue collection was was Kshs 348 Million in the first six month of the fiscal year 2013/2014 year against a target opf 900 million a shortfall of kshs 552 million. The underperformance was due to the delay in enactment of the finance bill and reluctance of the citizens inpaying the existing levies.for the remainder of the year we expect the shortfall to persit.

Due to the transitional challenges experienced in first half of the financial year 2013/14 and changes in disbursement in government funding to the county governments, budget implementation fell short of the approved budget estimates on account of development expenditure. Development Expenditure execution has lagged behind in the first six months of the financial year .on account of delayed disbursement of development vote by the national treasury.

2013/14 Supplimentary estimates

In the course of the budget implementation during the first half of the financial year several challanges emerged they include local revunue underperformance and expenditure pressures.The former arising from the delay in enactment of finance act while the former was as a result of delay in gazettement of functions trasfered in county government after the approved of county budgets.

In view of the financing constrains from revenue and emerging expenditure presssures a supplimentary budget for FY year 2013/14 reflecting these changes will be submitted to the county assembly for approval. The additional spending in respect of devolved function salary for workers in health, agriculture, water ,trade amounting to kshs 1.3 billion, this together will underperformance of revenue to the tune of kshs 1 billion call for reallocation and rationalization of funds to the tune of kshs 2 .3 billion.

Adjustments to the 2013/14 budget will take into account actual performance of expenditure so far and absorption capacity in the remainder of the financial year because of the resource constrains, the County Government will rationalize expenditures bycutting those that are non-priority. These may include slowing down or reprioritizing development and operational expenditures in order for the Government to live withinits means. Utilization of emergency funds will be within the criteria specified in the 2012 PFM law. 17 National Growth Update

The economy grew by 4.6 percent in 2012 compared with 4.4 percent in 2011 (Chart 2.1). This growth was broad-based and was driven mainly by expansion in agriculture, transport and communication, wholesale and retail trade, and manufacturing which contributed the most to GDP in 2012.

the first three quarters of 2013 the economy expanded by 4.6 percent on average compared with 4.4 percent in the same period in 2012. The broad- based growth was mainly attributed to continued expansion in building and construction, mining and quarrying, wholesale and retail, manufacturing, transport and communication financial intermediation as well as agriculture and forestry.

County growth prospects Growth remained resilient, Nakuru county has seen increased economic activities including a robust construction industry, increased hospitality services supported by opening of more hotels, expansion in the horticultural sector, increase in sports tourism covering rugby,golf and football .

Foreign investors indicators Against the backdrop of finite funding from the national treasury and the County local sources the implementation of the 2013/2014 County infrastructural programme recently received a boost from foreign donors. In this respect the County will benefit from 18 improvement in infrastructure in various sectors including education, roads and the health sectors. A project funded by the world bank solve the perenial storm water drainage is set to begin in the next four weeks and will target nakuru west subcounty in kaptembwa a total of kshs 240 will be injected in the project.

Risks to the outlook Given the fact that the devolved system of government is a relatively new phenomena in kenya there are still many unknowns that may pose serious challenges to organs of governance at the county level as the learning curve stepeens.

Expenditure pressures have emerged with salary and operational demands from the health and Agricultural sectors which were further devolved on 9th of August vide legal notice 157 of 2013.Hamornization of salaries disparities for staff devolved from the National government and those inherited from the defunct local authorities within the county has implications on the wage bill. These poses risk to the stability of the budget for 2013/14 and the medium term by limiting funding to the development expenditure.

The risk to the outlook for 2014/15 and medium-term include further weakening in National economic growth prospects in tourism sector. Tourism being one of the major main stay in the County economy the inherent risk is bound to impact adversely on County revenue propspects. Reversal in the current easing of flower import tariff by the european union and recent placement of karituri flower farm under receivership will impact on county revenue as it is a major component. Failure to observe budgetary timelines by the legislative arm as stipulated by the constitution and the PFM Act 2012 may undermine the budgetary process and operations of the county.

Finally, the emerging conflict betweenthe senate and county government and threat of delaying the county revenue allocation and division bill will delay the implementation of budget .Should these risks materialize the county government will face bottlenecks in service delivery

19 III FISCAL POLICY AND BUDGET FRAMEWORK.

Overview

We will continue to pursue prudent fiscal policy to assure economicstability. In addition, our fiscal policy objective will provide an avenue to support economic activity while allowing for implementation of the programmes within sustainable public finances.

In respect to Revenue the Coutny treasury isexpected to institute corrective measures to reverse the loss of revenue from local sources. Options could include enhanced compliance audit of large Outstanding Property tax payers, targeted automation of highly potential but leaking revenue sources, and speedy implementation of collection of other sources of taxes such as liquor licenses,park fees ,flower cess, royalties, advertisement and rental chrages.

Following the devolution of the tourism sector,the Government will continue to engage with stakeholders to develop a comprehensive policy and legislative framework covering licensing, revenue sharing, taxation and sustainable use of the resources. This will ensure that we derived maximum benefit from county parks and its heritage sites including lake Nakuru, Mt longonot, Hells gate among others. In addition the countyis counting on a draft bill to be introduced in the senate which will stipulate royalties to be paid to counties from natural resources found within its locality with high prospects expected in the power generation sector in form of geothermal power.Devolved ministries colecting revenue will be expected to surrender them to the County revenue fund account as soon as possible.

Any review of salaries and benefits for the public sector workers will beconducted by the Salaries and Remunerations Commission (SRC) in accordance withArticle 230 of the Constitution and Regulations on Pay Review and Determination,In addition to the County public service board harmonizing the salaries of employees of former defunct local authorities and central government for the devolved government.

In addition, the County Government will consider making decision to put on holdapproval of any policy and proposed legislation, which establishes a new County sector agency with personnel and wage implications. All such establishments should

20 await comprehensive restructuring of the county Government in accordance with the Constitution.

Observing Fiscal Responsibility Principles

The County Government recognizes that the fiscal stance it takes today will have implications into the future. As County Government we shall ensure adherence to the ratio of development to recurrent of at least 30:70 over the medium term, as set out in the law. Once the PFM regulations are finalized the county governments will respect ratios guiding the wage levels in general and expenditure management on items such as office goods and their pricing that should as much as possible reflect actual marketprices. Timelines on paying goods should be minimized to enable county government get competitive prices in the market.

The respect and observance of these fiscal rules set out in the PFM law and its regulations is important and necessary to entrench fiscal discipline. In this regard,the Government will observe the fiscal rules set out in the PFM law so as to entrench fiscal discipline.

Fiscal responsibility has become even more important since the Constitution requires the Government to progressively provide for a minimum basic standard of economic and social rights to its citizens within available resources. In order for spending to increase on a sustainable basis to meet these basic needs, we should be prepared to match the increased expenditure demands with a corresponding increase in tax revenue yield through efficient collection and widening of taxbases. It is therefore imperative to reform and modernize the taxregimes to ensure stability of revenue effort, while at the sametime continuing to restructure expenditure systems to ensure efficiency and create fiscal space required to fund these basic needs expenditures on sustainable

Fiscal structural reforms The County Government will continue harmonizing existing tax regimes offer tax reliefs incentives, widen the tax base In line with 2013 finance Act that was enacted by the County Assembly, the county Government is reviewing all other tax legislations in order to simplify and modernize them as indicated in the FY 2013/14 Budget Speech. This is expected to increase revenue collection in the medium term 2016/17 to Kshs 3 billion 21 On the expenditure side, the County Government will continue with rationalization of expenditure to improve efficiency and reduce wastage. Expenditure management will be strengthened with full adoption of the Integrated Financial Management Information System (IFMIS) across the county level. Above all, the new PFM Act, 2012 is expected to accelerate reforms in expenditure management system

Deficit Financing Policy The fiscal stance envisages borrowing from Domestic Sources. Borrowing will be undertaken in a cautious manner and limited to bankable projects and the stated ceiling in the Medium-Term Debt Strategy Paper.

2014/15 Budget framework

The 2014/15 budget framework is set against the backgroundCounty intergrated development plan and themedium-term fiscal framework . In addition to the national budget policy statement as mirrored in strategic objectives as outlined in the vision 2030, MTP II and the broad development policies of the new administration

Revenue projections The 2014/15 budget will target revenue collection including Facility improvement funds (F.I.F) of Kshs 2.6 billion which translates to 26 percent of total expenditure. As noted above, this performance will beunderpinned by on-going reforms in tax policy and revenue administration. As such, total revenues including Local revenue, CRA alocations and FIFs are expected to be Ksh 9.8 billion.

Expenditure Forecasts In 2014/15, overall expenditures are projected to increase by 8 percent (or kshs 900 million) up from the estimated Ksh10 billion inthe FY 2012/13 budget owing to more functions being devolved. Recurrent expendituresare expected to stabilize slightly at 70 percent of total expenditure in the FY 2014/15 from 69.9 percent of total expenditurein the FY 2014/15, on account of growth in nominal total expenditure.

22  Debt repayments is expected to increase relative to total expenditure to 4 percent in 2014/15 from 3 percent in 2013/14,  The wage bill is expected to stabilize at 50 percent of total expenditure in the FY2014/15.  Transfers to County assemblyand level five hopitals will remain at the 2012/13 nominal value.  Expenditure ceilings on goods and services for sectors/ministries are based on funding allocation in the FY 2013/14 budget as the starting point. The ceilings are then reduced to take into account one-off expenditures in FY 2013/14 and then an adjustment factor(inflation tendancies) is applied to take into account the general increase in prices.

Development expenditure

The ceiling for development expenditures excluding donor funded projects will stabilize in nominal terms to Ksh 2.9 billion (30 percent oftotal expenditure) in the FY 2014/15 from Ksh 2.7 billion (27 percent of total expenditure) in 2013/14. Most of the outlays are expected to support critical infrastructure that will crowd in private sector investment. Emegency provision of Ksh 50 million and Ksh 22 million for renewal of assets will be provided in the budget for 2014/15.

Overall deficit financing

Overall fiscal balance on a accrual basis (including debts inherited by defunct local authority) is projected at Ksh 149 billion(deficit financing) FY 2013/14 against the budget targeted of Ksh 10 billion.This translates to 0.2 percent of the targeted total expenditure.This stance mean that the county will be force to borrow to undertake development projects.

23 IV INTERGOVERNMENTAL FISCAL RELATIONS

County Budgets and the Transfer of Functions A key challenge in developing the 2013/14 MTEF budget was the allocation of funds for transfered functions to theCounty. The County Governments come into operation after elections in March 4th 2013 and there wasnot enough information for Counties to develop their plans and budgets for 2013/14.the confusion was further compound by lack of clear information on C.R.A Allocation to counties. The release of two legal notices on devolved governments legal notice 16 and 157 of february and august 2013 forced the revision of the budget

As such, it will be critical to have the amount allocated by CRA known to Counties early enough. The national government through the Transition Authority should ensure service delivery to the County Governments is not disrupted in line with provisions in the Constitution.. County Government on the other hand should ensure that institutions are constituted and their capacities strengthened in order to enable them perform their assigned functions effectively and efficiently.

Although asymmetric transfer of functions is provided for in the Constitution,the national government shouldtrasfer equivalent funding. This will avoid a situation whereby counties have more functions transferred to them without consumurate funding.

Resource Available Equitable shares Pursuant to article 202 of the constitution the national government through the budget policy statement allocated nakuru county kshs 7.2 billion.In this regard the equitable share of revenue allocated to Nakuru County is kshs 6.9 billion The equitable share of revenue is unconditional allocation to county governments and therefore county governments are expected to plan, budget,spend and account onthe funds allocated independently

Additional resources In addition to equitable share of revenue Nakuru county is also expected to get addtional fund from the following sources a) Additional conditional allocation of kshs 228 million for rural electrification 138 million on loans and grants 24 b) Own revenue from specific county revunue raising measures through implementation of the finance act c) Borrowing provided national government guarantee is obtained as well as the approval of nakuru county assembly d) Grants and donations from development partners in accordance with section 138 and 139 of the public finance management act 2012 The current allocation in the national treasury budget policy statement is not indicative of conditional allocation to level 5 hospital i.e the Provincial genaration hospital ascompared to the financial year 2013/14. The budget policy statement release by the national treasury on 15th february 2014 indicates a conditional allocation of kshs 228 million for rural electrification to the county government of nakuru. The transfer of this function is however not backed by any legal gazettee notice as required by law.

25 Table :-Revenue Allocation for Each County Government for FY 2014/15

FY 2013/14 FY 2014/15 Per capita Allocation Total County Rural Allocations - Total County Allocation County Ratio Allocations (Ksh.) Equitable Share Electrification loans and grants Allocations s (Ksh.) Column A Column B 1 Baringo 1.71 3,630,408,716 3,780,757,552 125,025,255 182,876,218 4,088,659,024 7,360 2 Bomet 1%.81 3,715,221,350 4,007,503,143 132,523,468 150,769,518 4,290,796,129 5,925 3 Bungoma 3%.25 6,515,262,210 7,194,783,986 237,923,138 711,417,035 8,144,124,159 4,994 4 Busia 1%.80 3,678,773,577 3,972,308,049 131,359,607 661,134,231 4,764,801,887 9,762 5 Elgeyo/Marakwet 1%.26 3,136,513,405 2,784,490,888 92,079,875 139,362,418 3,015,933,181 8,151 6 Embu 1%.48 3,364,281,093 3,267,666,165 108,057,919 426,494,990 3,802,219,074 7,366 7 Garissa 2%.22 4,696,466,675 4,914,082,809 162,503,003 91,802,418 5,168,388,230 8,295 8 Homa Bay 2%.17 5,726,215,438 4,797,669,847 158,653,362 215,462,418 5,171,785,626 5,366 9 Isiolo 1%.18 2,423,476,882 2,602,395,085 86,058,179 91,802,418 2,780,255,682 19,402 10 Kajiado 1%.70 3,511,792,058 3,756,960,407 124,238,311 214,154,418 4,095,353,136 5,959 11 Kakamega 3%.43 7,356,212,775 7,584,569,170 250,812,881 955,696,758 8,791,078,809 5,294 12 Kericho 1%.73 3,612,812,629 3,835,663,387 126,840,927 120,827,418 4,083,331,732 5,385 13 Kiambu 2%.87 6,264,435,668 6,354,545,405 210,137,426 148,204,518 6,712,887,348 4,135 14 Kilifi 2%.86 5,820,419,123 6,335,537,520 209,508,857 142,602,418 6,687,648,794 6,026 15 Kirinyanga 1%.36 2,829,920,840 3,012,479,221 99,619,184 277,576,292 3,389,674,697 6,419 16 Kisii 2%.73 5,824,258,288 6,039,596,132 199,722,419 155,899,518 6,395,218,070 5,550 17 Kisumu 2%.19 4,866,678,745 4,837,094,912 159,957,103 210,529,518 5,207,581,533 5,375 18 Kitui 2%.80 5,834,395,951 6,187,439,952 204,611,443 299,716,518 6,691,767,912 6,608 19 Kwale 1%.97 4,029,400,667 4,364,077,915 144,314,981 168,482,418 4,676,875,314 7,196 20 Laikipia 1%.33 2,757,834,934 2,936,985,641 97,122,699 155,224,518 3,189,332,858 7,989 21 Lamu 0%.79 1,599,992,106 1,746,997,444 57,771,174 91,802,418 1,896,571,036 18,678 22 Machakos 2%.61 5,473,697,909 5,762,909,487 190,572,714 302,987,289 6,256,469,490 5,695 23 Makueni 2%.30 4,721,151,803 5,082,646,941 168,077,223 309,133,344 5,559,857,508 6,286 24 Mandera 3%.45 6,780,543,337 7,624,989,327 252,149,528 91,802,418 7,968,941,273 7,769 25 Marsabit 2%.00 4,068,447,609 4,418,367,634 146,110,279 91,802,418 4,656,280,331 15,992 26 Meru 2%.50 5,507,866,275 5,528,728,169 182,828,610 1,584,004,384 7,295,561,163 5,379 27 Migori 2%.25 4,760,063,083 4,969,563,098 164,337,672 216,486,618 5,350,387,388 5,834 28 Mombasa 2%.00 4,347,575,931 4,425,546,774 146,347,684 131,729,518 4,703,623,977 5,007 29 Muranga 2%.06 4,321,826,974 4,560,157,771 150,799,114 334,012,785 5,044,969,669 5,352 30 Nairobi 5%.00 9,896,236,826 11,065,462,493 365,921,974 1,605,339,854 13,036,724,321 4,154 31 Nakuru 3%.12 6,961,312,530 6,910,337,606 228,516,827 138,214,518 7,277,068,951 4,539 32 Nandi 1%.83 3,886,848,586 4,048,551,880 133,880,902 120,799,518 4,303,232,300 5,715 33 Narok 2%.04 4,146,381,942 4,502,179,906 148,881,853 205,416,618 4,856,478,377 5,707 34 Nyamira 1%.60 3,317,084,521 3,537,221,499 116,971,801 153,902,418 3,808,095,718 6,365 35 Nyandarua 1%.66 3,435,119,044 3,667,089,692 121,266,391 145,774,518 3,934,130,601 6,598 36 Nyeri 1%.71 4,071,322,926 3,788,116,830 125,268,618 316,867,785 4,230,253,233 6,099 37 Samburu 1%.37 2,805,092,097 3,024,453,738 100,015,167 91,802,418 3,216,271,324 14,362 38 Siaya 1%.92 3,971,592,206 4,253,054,841 140,643,577 653,606,711 5,047,305,129 5,992 39 Taita 1%.27 2,626,482,215 2,817,804,460 93,181,516 91,802,418 3,002,788,394 10,549 40 Tana River 1%.53 3,118,807,124 3,392,508,746 112,186,318 123,797,418 3,628,492,483 15,114 41 Tharaka Nithi 1%.21 2,434,590,071 2,671,360,382 88,338,781 698,823,239 3,458,522,401 9,467 42 Tranzoia 1%.96 3,923,008,857 4,341,868,964 143,580,557 91,802,418 4,577,251,938 5,590 43 Turkana 4%.03 7,894,398,068 8,921,969,701 295,039,161 91,802,418 9,308,811,280 10,882 44 Uasin Gishu 2%.00 4,066,889,893 4,419,574,966 146,150,204 96,432,418 4,662,157,588 5,214 45 Vihiga 1%.49 3,028,538,740 3,296,164,713 109,000,333 410,456,808 3,815,621,854 6,880 46 Wajir 2%.78 5,647,521,552 6,158,038,375 203,639,167 91,802,418 6,453,479,959 9,749 47 West Pokot 1%.66 3,592,826,769 3,672,727,375 121,452,823 96,432,418 3,890,612,615 7,589 GRAND TOTAL 100%.00% 210,000,000,000 221,175,000,000 7,314,000,000 13,898,673,499 242,387,673,499 6,278

Capacity Building of County Governments Counties are still experiencing challenges in fully implementing the PFM Act 2012 and the IFMIS system. The national government has continued providing the 26 necessary support. In this regard, the national government rolled out training at Kenya school of government facilities and provided standby teams to respond to requests for support from the county governments. A county public finance management and IFMIS training curriculum has been prepared and preparation of Trainers and User’s Manual for each of the training module identified in the curriculum is underway.

27 V:MEDIUM-TERM EXPENDITURE FRAMEWORK

The resource envelope available for allocation among the county department is based on the medium term fiscal framework County own mobilized budget resources finance about 25 percent of the budget. Of this,taxrevenue (Propertytax,single business permit,parking fees and market fees) accounts for over 65 percent of total budget resources. Local Revenues are expected to be 30 percent of funding in 2014/15;

County revenue and FIFs is projected to broadly cover 25% of funding required for total expenditure. This approach does not bodes well for long-term sustainability of our public finances.

Spending Priorities

Going forward, and in view of the recent devolved functionsand limited resources, MTEF budgeting will entail adjusting non-priority expenditures to cater for the priority sectors. The County intergrated development plan (2014-2017) is currently under preparation and will guide resource allocation, going forward. In the Meantime, the resource allocation will be based on the updated First County government budget approved in june 2013 With the County Government’s commitment in improving infrastructure countywide, the share of resources going to priority physical infrastructure sector, such as roads, streetlighing and waterwill continue to rise over the medium term. This will help the sector provide reliable security and boost the 24 hour economy and as well as increased access to water and development ofirrigation projects countrywide.Other priority sectors including health, internal security,education and youth which will continue to receive adequate resources. Both sectors (education and health) are already receiving a significant share of resources in the budget and require them to utilize the allocated

28 resources more efficiently to generate fiscal space to accommodate other strategic interventions in their sectors. The economic sectors including agriculture and livestock will receive increasing share of resources to boost agricultural productivity with a view to deal with value addition and threats in food security in the country

29 MEDIUM TERM EXPENDITURE ESTIMATES The table provides the projected baseline ceilings for the 2014MTEF classified by sector MEDIUM TERM SECTOR APPROVED CBROP CBROP CEILINGS 2013/14 2014/15 CFSP 2014/15 2015/16 CFSP 2015/16 CFSP2016/17 CFSP2016/17 COUNTY SECTORS 1. Agriculture and Urban Development TOTAL 655,135,740 879,883,430 859,883,430 967,871,773 927,171,773 1,064,658,950 1,019,888,950 Agriculture livestock and Rec. fisheries Gross 311,958,839 411,958,839 368,958,839 453,154,723 453,154,723 498,470,195 498,470,195

Dev 95,700,000 195,700,000 200,700,000 215,270,000 182,270,000 236,797,000 200,497,000

- - Land Physical Planning and Rec. Housing Gross 145,233,901 159,757,291 144,757,291 175,733,020 175,733,020 193,306,322 193,306,322

Dev 102,243,000 112,467,300 145,467,300 123,714,030 116,014,030 136,085,433 127,615,433

2. Energy Infrastructure & ICT TOTAL 1,500,950,339 1,571,845,373 1,165,845,373 1,729,029,910 1,544,229,910 1,901,932,901 1,698,652,901 Min. of Roads Public works and Rec. Transport Gross 685,634,495 674,997,945 366,997,945 742,497,739 742,497,740 816,747,513 816,747,513

Dev 619,250,000 681,175,000 730,175,000 749,292,500 638,192,500 824,221,750 702,011,750

- - Min. of ICT and Rec. E-government Gross 25,962,054 28,558,259 23,558,259 31,414,085 31,414,085 34,555,494 34,555,493

Dev 170,103,790 187,114,169 45,114,169 205,825,586 132,125,586 226,408,144 145,338,144

3. General Economic and Commercial Affairs TOTAL 526,779,966 579,457,963 472,457,963 637,403,759 519,703,759 701,144,135 571,674,135 Min. of Trade Tourism and Rec. industarialization Gross 156,779,966 172,457,963 145,457,963 189,703,759 189,703,759 208,674,135 208,674,135

Dev 370,000,000 407,000,000 230,000,000 447,700,000 330,000,000 492,470,000 363,000,000

4. Health TOTAL 2,542,684,821 3,542,684,821 3,507,684,821 3,896,953,303 3,632,953,303 4,286,648,633 3,996,248,633 Rec. Health Gross 2,147,577,621 2,997,577,621 3,034,577,621 3,297,335,383 3,088,335,383 3,627,068,921 3,397,168,921

Dev 395,107,200 545,107,200 473,107,200 599,617,920 544,617,920 659,579,712 599,079,712

5.Education TOTAL 726,284,677 798,913,145 601,913,145 878,804,459 826,004,460 966,684,905 908,604,905 Min. of Education Youth Rec. Sport & Gender Gross 416,564,677 458,221,145 361,221,145 504,043,259 495,243,260 554,447,585 544,767,585

Dev 309,720,000 340,692,000 240,692,000 374,761,200 330,761,200 412,237,320 363,837,320

6.Administration & International Relation TOTAL 3,748,774,443 4,113,651,888 3,176,835,180 4,508,717,077 4,157,818,698 4,946,588,785 4,573,600,568 Baseline ceilings The sector ceilings on the onset will form the indicative baseline sector ceilings for the next budget of 2014/15. However, following the gazettement of more devolved functions by legal notice 16 and the updated legal notice 157 of 2013 these sector ceilings have been modified. The baseline estimates reflects the current ministerial spending levels in sector programmes.In the recurrent expenditure category,non – discretionary expenditures takes first charge. Compensation of employees for county line minstries account for 41% of projected revenue while compensation for county assembly members and staff account for 3%. The total projected expenditure for existing employee compensation amount to 44% of revenue.

Development expenditures are undertaken on the basis of county intergrated development plan as well as strategic priorities in the budget policy statement to foster economic growth. The Proposed capital projects will have to be evaluated in the context of the following elements: (a) Priority for financing projects should be given to those projects that are in full compliance with the County Government regulations and priorities as outlined in the County intergrated development plan and which are fully justified for financing. (b) Community need identified through citizens fora (c) Department/Agencies should indicate how their proposed projects will contribute to economic growth, job creation and increased citizen’s welfare

Details of Sector Priorities

The medium term expenditure framework for 2014/15–2016/17 ensures continuity in resource allocation based on prioritized programmes aligned to the County integrated development plan and strategic policy initiatives of the county Administration to accelerate growth, employment creation and poverty reduction.The recent achievements and key priority targets foreach sector are based on the reports from the County Sector Working Groups(CSWG). 31 Agriculture,Rural &Urban Development Sector(ARUD)

This Sector comprises of two sub-sectors, namely; Agriculture, Livestock and Fisheries; Land, physical planning and Housing.

The Sector goal in line with the Vision 2030 is to attain food security, sustainable land management, and development of affordable housing and urban infrastructure. The Constitution, under Article 43 on the Bills of Rights, has provided for accessibility of adequate food of acceptable quality and accessible and adequate housing. In terms of its contribution to GDP, ARUD sector directly contributes 24.5 percent of the GDP valued at KShs 741billion. The sectoral so contributes approximately 27 percent to GDP through linkages with manufacturing, distribution and other service related sectors. It further accounts for about 65 percent of Kenya’s total exports, 18 percent and 60 percent of the formal and total employment respectively. ARUD sector has been identified as one of the six sectors aimed at delivering the 10 percent economic growth rate under the Vision 2030.

The key challenges facing the sector include unfavourable climatic changes, poor planning and inadequate warning systems, low production and productivity, poor marketing and marketing infrastructure, low value addition and competitiveness, inadequate physical infrastructure, unfavourable legal and policy frameworks, and low access to financial services as well as affordable credit. Over the 2014 MTEF, the sector aims to address the above challenges by raising agricultural productivity through value addition and adoption of new technologies; creating and enabling policy and legal framework, improving efficiency and effectiveness of sector institutions; effective administration and management of landresource; enhancing Infrastructure connectivity and accessibility through rehabilitating and upgrading strategic rural roads; rehabilitation of existing housing estates,and sustainable management of resources in the sector.

During the 2014/15-2016/17 MTEF period, revival of agricultural industries including pyrethrum, potato cooling plant, value addition and product diversification of farm, livestock and fisheries products, fisheries development and management through expansion of fisheries , land reforms establishment of Countys patial data infrastructure, development of affordable and quality houses for lower income

32 Kenyans, installation of physical and social infrastructure in slums and informal settlements in urban areas and development of social and physical urban infrastructural facilities.

To under take these programmes, the 2014/15–2016/17MTEF estimates for the sector are estimated to be KSh.2.5 billion.For the FY2014/15,KSh 877 million has been set aside for the sector.This is projected to increase toKSh.927 million and KSh1 billion respectively, for the FY2015/16 and FY 2016/17.

Energy,Infrastructure & ICT Sector (EII)

The Energy, Infrastructure and Information Communications Technology Sector consists of the subsectors of Roads, public works and Transport and Information and Communications Technology and E-government. The Sector aspires to be a provider of cost-effective public utility infrastructure facilities and services’ in the areas of transport and ICT that meet National standards. Key achievements during 2013/14 period include improved infrastructure and in particular construction of bridges across the entire country; periodic road maintenance.

The strategies and measures to be pursued in the medium term include; strengthening the institutional framework for infrastructure development, raising the efficiency and quality of infrastructure as well as increasing the pace of infrastructure projects so that they are completed as envisaged. Other measures include encouraging Private Sector participation in the provision of infrastructure services through the Public- Private-Partnerships (PPPs) framework.

Funding over the 2014/15MTEF period will facilitate the implementation and fasttracking of programmes under the Information and Communication Services; Road Transport; Rural Electrification; ICT Infrastructure Development; Renewable Energy Resources i.e solar driven streetlighting.

Total MTEF estimates for the sector is KSh.4.6 billion of which KSh.1.1 Billion has been set aside for the FY2014/15. This represents a 5 % decrease from KSh.1.5billion allocated in the FY2013/14. KSh. 1.56 billion and KSh. 1.7 billion

33 have been allocated to the FY2015/16 and FY2016/17 respectively. Functions such as feeder roads maintenance, streetlighting, traffic and parking, public road transport, and housing have been devolved to the county government.

General Economic and Commercial Affairs (GECA)

177.The General Economic and Commercial Affairs (GECA) Sector comprises one SubSector namely: Trade , Tourism; and Industrialization. The Sector plays a significant role towards achievement of the Vision 2030 and Millennium Development Goals (MDGs) through trade, tourism and investments to enhance economic growth.

The sector contributes significantly to the overall national development agenda accounting for about 33 percent of the overall GDP. It is a major source of county government revenue in form of, license fees, entry fees,among others.

The sector also undertakes reviving dormant cooperatives and registration of new cooperatives. Tourism earnings increased from Ksh.73.7billion in 2010 to Kshs.96billion in 2012; and visit or arrivals grew from 1.6 million in 2010 to 1.7 million in 2012.

Despite impressive performance over the recent past, the sector still faces a number of challenges ranging from in adequate trading space for informal traders and hawkers, limited access to credit by businesses, high cost of production, influx of sub-standard, counterfeits and contra-band goods, and low technology, innovation, research and development.

Over the medium term, the sector will implement programmes aimed at promoting growth and development of commerce; tourism promotion and development; savings and investment mobilization; employment creation; and industrial and entrepreneurship development. The key outcomes expected from the sector are: increased contribution of industry to GDP; increased contribution of cooperatives to the economy; increased contribution of domestic trade and tourism to GDP; increase in export earnings; and effective and 34 efficient service delivery. The total MTEF estimate for the sector is KSh 1.4 billion. For the FY2014/15, KSh 375 million has been set aside. This is projected to increase to KSh 519 million and KSh 571 million in 2015/16 and 2016/17 respectively.

Health Sector

The Health Sector comprises of the Ministry of Health including the PGH, All subcounty health facilities, dispensaries and health centres. The Medium Term Expenditure Framework (MTEF) for the period 2014/15-2016/17 for the Sector is guided by the Second Medium Term Plan of Vision 2030, the Kenya Health Policy 2012-2030, the health Sector Strategic Plan and the Constitution of Kenya.

The sector mandate is to promote and participate in the provision of integrated and high quality curative, preventive and rehabilitative services that is equitable, responsive, accessible and accountable to Kenyans. The key achievements for the sector include reduction of under-5 year old mortality from 115 per 1,000 livebirths in 2003 to 74 per 1,000 livebirths in 2008/9 and infant mortality from 77 per 1000 livebirths to 52 per 1000 livebirths over the same horizon. The sector has also seen increased immunization coverage for under -1year old from 71% in 2008 to 77% in 2011.

The sector faces numerous challenges, which include inadequate infrastructure for service delivery, shortage of qualified health personnel, and ontime delivery of medicines and medicalsupplies. Maternal mortality ratio has deteriorated from 414 in 2003 to 488 deaths per 100,000 livebirths in 2008-09 and births attended by skilled healthpersonnel declined from 51percent in 2007 to 43 percent in 2010/11, despite considerable funding flowing to the programmes.

In the medium term, the sector will seek to address these challenges through continued investment in training of health professionals, medicalservices, health, and sanitation infrastructure and improvement in the working conditions of medical practitioners. The resources required under the Health Sector are captured under four programmes and guided by the sector policy commitments and the core mandates of the sub-sectors.

The resources being requested will be used to implement projects aimed at achieving

35 accessibility, affordability of health services, reduction of health inequalities and optimal utilization of healthservices. These resources will, therefore, target to improve access, quality and equity in the provision of health services. The 2014/15– 2016/17MTEF estimates for the sector is KSh.10.9 billion, of which KSh3.5 billion has been set aside for the FY2014/15, representing a 4.7% increase from the FY2013/14. This is projected to increase to KSh 3.6 billion and KSh.3.9 billion in 2015/16 and 2016/17 respectively.

County Health Services will focus on County Health Facilities and Pharmacies, Ambulance Services; Promotion of Primary Health Care; licensing and control of selling of food in public places; veterinary services, cemeteries, funeral parlours and crematorium; referral removal; refuse dumps and solid waste. This scenario will need concerted efforts in restructuring human resource management, infrastructure development and maintenance, health financing, donor funding and partnerships, among others. Consequently relevant health sector laws, legislations, policies and regulation will be formulated to guide the devolved health services and programme implementation.

Public Administration and National Relations

The sector plays a key role in enhancing public service delivery, organization and coordination of County Government business through planning, mobilization of financial and human resources in the public sector. In addition, the sector links all other sectors with the rest of the country on matters of cooperation and resource mobilization. The Office of the governor and deputy governor , public service management, County public service board, county treasury are some of the offices and independent departments within the sector.

Funding over the 2014MTEF period will enable the sector to oversee the implementation of the County government act and the Constitution; provide leadership and policy direction in the governance of the county; coordinate and supervise county government affairs; promote sound public financial and economic management for socioeconomic development; articulate and implement County policy fornational development; promote macro economic stability, mainstream MDGs into the County policy, planning and budgetary process, implementation, monitoring and evaluation; promote efficient and effective human resource 36 management and development for improved county public service delivery; and promote county public service integrity.

The total MTEF estimates for the sector is Ksh. 8 billion. For the FY2014/15, KSh.3.1 billion has been set aside to fund the programmes of this sector. This is projected to increase to Ksh. 3 billion and Ksh. 3.1 billion in the FY2015/16 and FY2016/17 respectively.

County assembly This sector proposal includes the MTEF expenditure limits for the county legislative arm that is expected to be submitted directly to the County Assembly in line with the Constitution. County assembly plays a crucial role in strengthening the democratic space and good governance in the County. Under the Constitution, legislative arm consists of the County assembly The expected increase in allocation is to cater for the increased emoluments for members of County assembly and additional physical facilities / infrastructure.For the FY2014/15, KSh.1.25 billion has been set aside, Ksh 1.1 billion and Ksh 1.3 billion in FY 2015/16 AND FY 2016/17 respectively

Education social protection youth culture and recreation

Education Assigned functions to the counties under this sector are limited, mainly to cater for pre- primaryeducation, village polytechnics, homecraft centres and children facilities

Social Protection,Culture and Recreation

The Social Protection, Culture and Recreation Sector comprise of two Sub-Sectors namely; the Social Security and Services; and the Sports, Culture and the Arts. The sector is mandated to address issues on promotion of harmonious, safety and health at workplaces, employment promotion, social security and children welfare and social development. The sector is also mandated to address issues relating to promotion and exploitation of County’s diverse culture for peaceful co-existence, enhancing Kenya’s reading culture through expansion of library network for increased information access, development and promotion of sports for a vibrant sporting industry, promotion and preservation of county’s heritage for national pride and harmony;

37 promotion of cultural and sports tourism; and development, regulation and promotion of the creative arts industry.

The sector achievements in the -2013/14 period include: Community mobilization, social development and welfare; Social infrastructure development; early childhood development infrastructure and community support services;rehabilitation of public amenties including Afraha stadium which hosted the Council for east and central Africa(CECAFA) senior challange cup; maintenance of county parks and Public library services..

Funding for the 2014/15-2016/17MTEF period will continue to focus on the delivery of the sector priorities and in particular those aimed at improving livelihood of vulnerable groups specifically the orphans and vulnerable children, the elderly,and persons with disability through County Programmes that will integrate the various cash donations.The county in the medium term intend to build more stadia with main focus being putting and rehabilitating facilties in Nakuru, Naivasha,Gilgil and Molo Towns

Total funding level for the MTEF period is KSh.2.3 billion .For FY 2014/15, KSh 601 million has been set aside,This is projected to increase to KSh.826 million and KShs.908 million for the FY2014/15 and FY2016/17 respectively.

Environmental Protection, Water, and Natural Resources

The sector is composed of one sub-sectors, namely; Environment, Water and Natural Resources . The mandate of the Sector includes; Environmental policy management, forest resources management, water resources management and sewerage services policy. It also includes conservation and protection of water ells and springs . The sub-sector is also mandated with management of health conditions and health and safety in mines, resources surveys, and policy formulation on extractive industry.

The sector plays a key role in ensuring that every county resident has access to portable water in a clean and secure environment. Over the MTEF period the sector aims to achieve expansion of water coverage and sewerage facilities; scaling up water storage to improve water security; conservation and management of catchment 38 areas; mitigation and adaptation measures on climate change; enforcement of sector laws and regulations; restoration of rivers and water springs;

The 2014/15 MTEF estimates of KSh 1.08 billion has been allocated to the sector. For the FY 2014/15, KSh.284 million has been set aside. KSh.408 million and KSh. 449 million in the FY2015/16 and 2016/17 respectively.

VI. CONCLUSION AND NEXT STEPS The set of policies outlined in this CFSP reflect the changed circumstances and are broadly in line with the County intergrated development planand the fiscal responsibility principles outlined in the PFM law. They are also consistent with the national strategic objectives pursued by the County Government as a basis of allocation of public resources. Details of the strategic objectives are provided in the first County intergrated development plan. . The policies and sector ceilings annexed herewith will guide the County sector working groups and line ministries in preparation of the 2014/15 budget.

39 As budgetary resources are finite,it is critical that CSWGs and Ministries prioritize their programmes within the available ceilings to ensure that use of public funds are in line with county government priorities. There is also need to ensure that currents resources are being utilised efficiently and effectively before funding is considered for programmes. CSWGs needs to carefully consider detailed costing of projects, strategic significance, deliverables(output and outcomes), alternative interventions, and administration and implementation plans in allocation resorces.

Implementing these policies with Budget 2014/15 are critical steps towards more inclusive sustainablegrowth. Inclusive sustainable growth calls for greater cooperation and alignment between labour,business, County government, civil society, communities and our development partners to get things done. Thi smeans hearing each other out, finding solutions, encouraging innovation, building a sustainable County.

Reflecting the above medium-term expenditure framework, the table below provides the tentative projected baseline ceilings for the 2013 MTEF, classified by sector. The sector ceilings include sub county fund.

40 ANNEX TABLE 3: RECURRENT SECTOR CEILINGS 2014/2015-2016/2017

RECURRENT APPROVED CBROP CFSP CBROP CFSP CBROP2016/ CFSP2016/1 EXPENDITURE 2013/14 2014/15 2014/15 2015/16 2015/16 17 7 COUNTY SECTORS 1. Agriculture and Urban Development Rec. Agriculture livestock Gros and fisheries s 311,958,839 411,958,839 368,958,839 453,154,723 453,154,723 498,470,195 498,470,195

CRA 273,014,818 343,014,818 175,016,872 377,316,300 377,316,300 415,047,930 415,047,930

LR 38,944,021 68,944,021 193,941,967 75,838,423 75,838,423 83,422,265 83,422,265 Rec. Land Physical Planning Gros and Housing s 145,233,901 159,757,291 144,757,292 175,733,020 175,733,020 193,306,322 193,306,322 CRA

LR 65,920,212 72,512,233 144,757,292 79,763,457 175,733,020 87,739,802 193,306,322 2. Energy Infrastructure & ICT - - Rec. Min. of Roads Public Gros works and Transport s 685,634,495 674,997,945 336,997,945 742,497,739 742,497,740 816,747,513 816,747,513

CRA 369,314,668 406,246,135 472,497,739 445,497,740 519,747,513 490,047,513

LR 244,319,827 268,751,810 336,997,945 270,000,000 297,000,000 297,000,000 326,700,000 Rec. Min. of ICT and E- Gros government s 25,962,054 28,558,259 23,558,259 31,414,085 31,414,085 34,555,494 34,555,493

CRA 25,962,054 28,558,259 23,558,259 31,414,085 31,414,085 34,555,495 34,555,493 3. General Economic and Commercial Affairs ------Rec. Min. of Trade Tourism Gros and industarialization s 156,779,966 172,457,963 145,457,963 189,703,759 189,703,759 208,674,135 208,674,135

CRA 8,418,534 9,260,387 - 10,186,426 - 11,205,069 -

LR 148,361,432 163,197,575 145,457,963 179,517,333 189,703,759 197,469,066 208,674,135 Rec. Gros 3,034,577,62 3,297,335,38 3,088,335,38 3,627,068,92 3,397,168,92 4. Health s 2,147,577,621 2,997,577,621 1 3 3 1 1

2,044,573,51 1,618,221,74 1,256,715,38 1,780,043,92 1,402,386,92 CRA 871,110,678 1,471,110,678 3 6 3 0 1

1,049,883,93 1,200,000,00 1,154,872,33 1,300,000,00 LR 754,439,943 954,439,943 450,004,108 7 0 1 0

FIF 522,000,000 572,000,000 540,000,000 629,200,000 631,620,000 692,120,000 694,782,000

5.Education - - Rec. Min. of Education Gros Youth Sport & Gender s 416,564,677 458,221,145 361,221,145 504,043,259 495,243,260 554,447,585 544,767,585

CRA 324,964,677 357,461,145 151,221,145 393,207,259 365,243,260 432,527,985 404,767,585

LR 91,600,000 100,760,000 210,000,000 110,836,000 130,000,000 121,919,600 140,000,000 6.Administration & International Relation - Office of The Rec. Governor & Deputy Gros Governor s 473,155,485 520,471,034 214,909,155 572,518,137 455,300,071 629,769,951 500,830,078

CRA 473,155,485 520,471,034 214,909,155 572,518,137 268,300,071 629,769,952 295,130,078

Rec. Gros 1,074,624,20 1,182,086,62 1,064,944,20 County Treasury s 888,119,174 979,931,091 666,119,174 1 968,131,091 1 1

CRA 688,151,408 756,966,549 252,265,410 660,770,437 554,277,327 768,232,857 651,090,437

LR 199,967,766 219,964,543 413,853,764 413,853,764 413,853,764 413,853,764 413,853,764

Rec. County Public Service Gros Board s 73,500,000 187,000,000 205,700,000

CRA 73,500,000 187,000,000 205,700,000 Rec. County Assembly Gros 1,027,952,87 1,130,748,16 1,089,000,00 Service Board s 849,547,831 934,502,614 950,000,000 6 990,000,000 3 0

1,027,952,87 1,130,748,16 1,089,000,00 CRA 849,547,831 934,502,614 950,000,000 6 990,000,000 4 0 Rec. Min. of Public Service Gros 1,049,680,82 1,154,648,91 1,089,000,00 Management s 867,504,816 954,255,298 562,000,000 7 990,000,000 0 0

1,016,836,55 CRA 763,964,355 840,360,791 448,105,493 924,396,870 864,716,042 7 951,187,647

LR 103,540,461 113,894,507 113,894,507 125,283,958 125,283,958 137,812,354 137,812,353 7. Env. Protection Water & Natural Resources - - Rec. Min. of Env. water and Gros natural resources s 112,240,817 123,464,899 133,464,899 135,811,389 135,811,389 149,392,527 149,392,528

CRA 69,801,685 76,781,854 86,781,854 84,460,039 84,460,039 93,906,043 93,906,043

LR 5,439,132 5,983,045 46,683,045 51,351,350 51,351,350 55,486,484 55,486,485

Rec. Gros 7,015,522,29 9,254,469,39 8,715,324,52 10,179,916,3 9,586,856,97 s 7,080,279,676 8,416,153,999 1 8 0 37 2

4,419,931,70 6,172,941,91 5,424,940,24 6,832,621,48 6,032,819,64 CRA 4,717,406,193 5,744,734,264 0 4 6 5 7

2,055,590,59 2,356,328,22 2,658,764,27 2,549,575,66 2,859,255,32 LR 1,652,532,794 1,968,447,677 1 2 4 6 5

FIF 522,000,000 572,000,000 540,000,000 629,200,000 631,620,000 692,120,000 694,782,000

43 ANNEX TABLE 4: DEVELOPMENT SECTOR CEILINGS 2014/2015-2016/2017

APPROVED DEVELOPMENT EXPENDITURE 2013/14 CBROP 2014/15 CFSP 2014/15 CBROP 2015/16 CFSP 2015/16 CFSP2016/17 CFSP2016/17 COUNTY SECTORS 1. Agriculture and Urban Development

Agriculture livestock and fisheries Dev 95,700,000 195,700,000 200,700,000 215,270,000 182,270,000 236,797,000 200,497,000

CRA 68,000,000 118,000,000 200,700,000 129,800,000 118,422,571 142,780,000 130,264,828

LR 27,700,000 77,700,000 - 85,470,000 - 94,017,000 -

D.F 63,847,429 70,232,172

Land Physical Planning and Housing Dev 102,243,000 112,467,300 145,467,300 123,714,030 116,014,030 136,085,433 127,615,433 145 CRA 50,000,000 55,000,000 ,467,300 60,500,000 75,375,431 66,550,000 82,912,974

LR 52,234,000 57,467,300 - 63,214,030 - 69,535,433 -

DF 40,638,599 44,702,459

2. Energy Infrastructure & ICT - -

Min. of Roads Public works and Transport Dev 619,250,000 681,175,000 730,175,000 749,292,500 638,192,500 824,221,750 702,011,750

CRA 436,233,651 479,857,016 359,029,731 527,842,718 414,639,803 580,626,989 456,103,783

CCRA 255,016,349 280,517,984 228,000,000 308,569,782 - 339,426,760 -

DF 149,145,269 223,552,698 245,907,967

Min. of ICT and E-government Dev 170,103,790 187,114,169 45,114,169 205,825,586 132,125,586 226,408,144 145,338,144

CRA 150,000,000 165,000,000 45,114,169 181,500,000 85,843,263 199,650,000 94,427,589

LR 20,103,790 22,114,169 - 24,325,586 - 26,758,144 -

DF 46,282,323 50,910,555

3. General Economic and Commercial Affairs - -

Min. of Trade Tourism and industarialization Dev 370,000,000 407,000,000 230,000,000 447,700,000 330,000,000 492,470,000 363,000,000

CRA 180,000,000 198,000,000 230,000,000 217,800,000 214,404,172 239,580,000 235,844,590

LR 190,000,000 209,000,000 - 229,900,000 - 252,890,000 -

DF 115,595,828 127,155,410

4. Health Dev 395,107,200 545,107,200 473,107,200 599,617,920 544,617,920 659,579,712 599,079,712

CRA 346,656,037 446,656,037 473,107,200 491,321,641 320,843,499 540,453,804 352,927,849

LR 48,451,163 98,451,163 - 108,296,279 - 119,125,907 -

DF 223,774,421 246,151,863

5.Education - -

Min. of Education Youth Sport & Gender Dev 309,720,000 340,692,000 240,692,000 374,761,200 330,761,200 412,237,320 363,837,320

CRA 94,307,800 103,738,580 240,692,000 114,112,438 214,898,731 125,523,681 236,388,604

LR 215,412,200 236,953,420 - 260,648,762 - 286,713,638 -

DF 115,862,469 127,448,716

6.Administration & International Relation - -

Office of The Governor & Deputy Governor Dev 70,000,000 77,000,000 50,000,000 84,700,000 77,000,000 93,170,000 84,700,000

CRA 70,000,000 77,000,000 84,700,000 39,027,640 93,170,000 42,930,404

LR - - -

DF 26,972,360 29,669,596

County Treasury Dev 363,597,137 399,956,851 349,956,851 439,952,536 439,952,536 483,947,789 483,947,790

CRA 20,000,000 22,000,000 349,956,851 24,200,000 223,390,064 26,620,000 245,729,070

LR 343,597,137 377,956,851 - 415,752,536 - 457,327,789 -

DF 216,562,473 238,218,720

County Public Service Board Dev 6,500,000 11,000,000 12,100,000

CRA 10,000,000 11,000,000 12,100,000

County Assembly Service Board Dev 130,000,000 130,000,000 300,000,000 130,000,000 132,000,000 130,000,000 145,200,000 300,000,0 CRA 130,000,000 130,000,000 00 130,000,000 85,761,669 130,000,000 94,337,836

LR - - -

DF 46,238,331 50,862,164

Min. of Public Service Management Dev 106,850,000 117,535,000 83,850,000 129,288,500 105,435,000 142,217,350 115,978,500

CRA 24,000,000 26,400,000 83,850,000 29,040,000 68,502,133 31,944,000 75,352,346

LR 82,850,000 91,135,000 - 100,248,500 - 110,273,350 -

DF 36,932,867 40,626,154 7. Env. Protection Water & Natural Resources - -

Min. of Env. water and natural resources Dev 225,200,000 247,720,000 150,720,000 272,492,000 272,492,000 299,741,200 299,741,200

CRA 125,200,000 137,720,000 150,720,000 151,492,000 272,492,000 166,641,200 299,741,200

LR 100,000,000 110,000,000 121,000,000 133,100,000 -

TOTAL TOTAL 2,957,771,127 3,441,467,520 3,006,282,520 3,772,614,272 3,300,860,772 4,136,875,698 3,630,946,849

CRA 1,694,397,488 1,959,371,633 2,857,137,251 2,142,308,797 2,144,600,976 2,343,539,674 2,359,061,074 LR

DF 1,669,197,488 1,931,651,633 149,145,269 2,111,816,797 1,156,259,796 2,309,998,474 1,271,885,775

DF -Deficit financing CRA- Commision on revenue allocation