Republic of Kenya
KENYA THE MEDIUM-TERM BUDGET STRATEGY PAPER 2006/07 – 2008/09 MINISTRY OF FINANCE
MAY 2006
TABLE OF CONTENTS List of Figures ................................................................................................................................. ii I. INTRODUCTION ......................................................................................................................1 A:
Overview ............................................................................................................................ 1
B:
Organization of the Report ................................................................................................. 1
II. RECENT ECONOMIC DEVELOPMENTS AND PROSPECTS THROUGH END JUNE 2006 ......................................................................................................................................2 A:
Macroeconomic Developments .......................................................................................... 2
B:
Structural Reforms ............................................................................................................. 9
C:
Equity and Poverty Reduction .......................................................................................... 12
III. MEDIUM TERM STRATEGY, 2006/07 - 2008/09 ............................................................14 A:
Introduction ...................................................................................................................... 14
B:
The Medium-Term Macroeconomic Framework ............................................................. 15
C:
The Medium-Term Fiscal Framework ............................................................................. 18
D:
Medium-Term Structural Reforms ................................................................................... 21
IV. MEDIUM-TERM SECTORAL RESOURCE ALLOCATION ........................................24 A:
Criteria for Resource Allocation ...................................................................................... 24
B:
Reorienting Expenditures ................................................................................................. 24
C:
Additional Budgetary Support.......................................................................................... 26
V. 2006/07 BUDGET FRAMEWORK .......................................................................................27 A:
Macroeconomic Outlook .................................................................................................. 27
B:
Fiscal Framework ............................................................................................................. 28
C:
Deficit and Financing Strategy ......................................................................................... 30
D:
External Financing Requirements .................................................................................... 30
E:
Key Risks to Macro –Fiscal Framework .......................................................................... 31
VI. DETAILS OF MINISTERIAL CEILINGS AND PRIORITIES, 2006/07 .......................32 A:
Introduction ...................................................................................................................... 32
B:
Education Sector............................................................................................................... 32
C:
Agriculture and Rural Development Sector ..................................................................... 33
D:
Information and Communication Sector (ICT) ................................................................ 34
E:
General Economic Services.............................................................................................. 35
F:
Health Sector .................................................................................................................... 36
G:
Physical Infrastructure Sector .......................................................................................... 38
H:
Public Safety, Law and Order Sector ............................................................................... 39
I:
Public Administration Sector ........................................................................................... 40 i
List of Figures Figure 1: Indicators of Monetary Policy, 2003/04-2005/06 ......................................................4 Figure 2: Interest Rates ..............................................................................................................4 Figure 3: Growth of Exports and Imports Value (Annual Percentage Change) ........................5 Figure 4: Fiscal Performance Indicators in Percent of GDP, 2002/03 - 2005/06 ......................7 Figure 5: Selected Government Expenditure, 2003/04 - 2005/06 .............................................8 Figure 6: GDP Growth, Inflation and Gross Reserves, 2004/5-2008 ......................................15 Figure 7: Investment and Savings (In Percent of GDP) [change-other-to external]................17 Figure 8: Medium-Term Fiscal Framework ............................................................................18 Figure 9: Expenditures on Social and Economic Sectors ........................................................26 Figure 10: Changes in the Composition of Social and Economic Expenditures after Additional Budgetary Support .................................................................................................27
List of Tables Attached Appendix 1: Selected Economic Indicators, 2005/06-2008/09 Appendix 2: Central Government Operations, 2004/05-2008/09 (in million of Shillings) Appendix 3: Central Government Operations, 2004/05-2008/09 (in percent of GDP) Appendix 4: Monetary Survey, June 2004 - July 2009 Appendix 5: Balance of Payments 2004/05-2008/09 Appendix 6: External Financing Requirements and Resources Appendix 7: Ministerial Ceilings (Recurrent Expenditure) Appendix 7b: Ministerial Ceilings (Development Expenditure) Appendix 8: Ministerial Ceilings on Total Expenditures Appendix 9: Ministerial Expenditure Ceilings for the 2006/07 Budget Appendix 10: Core Priority Expenditures (Recurrent ) (in million of Shillings) Appendix 10b: Core Priority Expenditures (Development) (in million of Shillings) Appendix 11: Transfers to State Corporations
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ABBREVIATIONS AND ACRONYMS M TEF
Medium Term Expenditure Framework
MDG
Millennium Development Goals
PER
Public Expenditure Review
GDP
Gross Domestic Product
CBK
Central Bank of Kenya
NFA
Net Foreign Assets
ERS
Economic Recovery for Wealth and Employment Creation
DFIs
Development Finance Institutions
EAC
East African Community
BOPA
Budget Outlook Paper
TF P
Total Factor Productivity
VER
Voluntary Early Retirement
ICT
Information Communication and Technology
PEMAP
Public Expenditure Management Action Plan
FPE
Free Primary Education
MPERS
Ministerial Public Expenditure Review
GIS
Geographical Information Systems
SME
Small and Medium Term Enterprises
ARV
Anti-Retro Viral
GoK
Government of Kenya
PETS
Public Expenditure Tracking Surveys
CDF
Constituency Development Fund
IPPD
Integrated Personnel Payroll Database
iii
Forward by Minister for Finance The 2006 BSP continues to advance the Government’s economic growth strategy elaborated in the Economic Recovery Strategy (ERS), while providing detailed plans to enhance and promote a dynamic and competitive private sector in 2006 and beyond. The three main pillars of the ERS are: (i) accelerating economic growth underpinned by macroeconomic stability; (ii) enhancing equity and poverty reduction; and (iii) improving governance. The expenditure policy framework in the medium term aims at ensuring efficiency and effectiveness in the implementation of our development policies. As part of efforts to link policy with budgeting, reforms in the expenditure and financial management will be deepened, and growth of non-priority expenditures will be contained in order to create fiscal space for financing priority policy areas such as the social sectors, agriculture and physical infrastructure, which are key to sustainable economic growth and development. While significant progress has been realized in implementing the Medium Term Expenditure Framework (MTEF) in terms of linking policies, planning and budgeting and shifting budgetary resources to priority areas, the process continues to face some challenges. The Government will continue to address these challenges, which include: (i) initiating an early comprehensive effort on costing all existing policies, programs, and projects; (ii) building links between recurrent and development budget; and (iii) developing a more programmatic approach to the budget, with a view to improving the linkage between expenditure and results. In line with the need to achieve the country’s national objectives, the Budget Strategy Paper (2006 BSP) draws priorities from the ERS and Millennium Development Goals (MDGs) related interventions. To this end, this Budget Strategy Paper focuses on: (i) pro-poor expenditures in support of ERS priorities and MDG goals, (ii) shifting resources toward capital expenditures, and (iii) deepening structural reforms in areas such as public expenditure management, financial sector, privatization and governance to provide a conducive framework that encourages and supports the private sector. The fiscal framework included in this 2006 BSP outlines an affordable and sustainable path of public spending aimed at achieving Government’s medium-term development priorities. The fiscal framework was completed prior to the release of the Economic Survey, which indicated stronger than expected economic growth. For example, the Economic Survey indicated that economy grew by 5.8 percent in 2005 compared with the 5.1 percent envisaged in the 2006 BSP. Economic growth is expected to slowdown to 5.4 percent in 2006 owing to adverse effects of the drought earlier in the year. Other objectives that guided preparation of the 2006 budget include the following: (i) producing a budget that is affordable and sustainable; (ii) not factoring in any external budgetary support from multilateral and bilateral sources as a continuation of the commitment to ensure budget predictability; and (iii) reducing domestic borrowing as a ratio of GDP to sustainable level in the medium term in order to provide enough room for private sector access to credit. Finally, I would like to express my gratitude to all those who participated in this year budget process including Parliamentarians, the private sector, civil society, NGOs and developments partners who at various stages provided valuable comments. AMOS KIMUNYA, EGH, MP MINISTER FOR FINANCE iv
Acknowledgement The 2006 Budget Strategy Paper is a continuation of Government’s effort to ensure effective linkage between policies, planning and budgeting. It provides an updated resource envelop and presents a fiscal framework for the next budget and the medium term. It also sets firm sectoral and ministerial ceilings in line with indicative ceilings outlined in the Budget Outlook Papers (BOPA) and Governments key strategic objectives as set out in the Economic Recovery Strategy for Wealth and Employment Creation. For the second year running, the 2006 BSP provides specific expenditure ceilings for line ministries and detailed guidelines that aim at restructuring the pattern of Government expenditures towards the priority areas in the social and economic sectors. The ministerial priorities have been derived from the sector reports, which have incorporated recommendations of the Ministerial Public Expenditure Reviews (MPERs). The sector and ministerial ceilings for the 2006/07 budget are consistent with the indicative ceilings provided in the previous BSP thus representing continuity in the allocation of resources in the medium term perspective. The preparation of the 2006 BSP was a cooperative effort. Much of the information in this report was obtained from the line ministries and various other government departments and agencies. We are grateful for their inputs. We are also grateful for the collaboration and comments we received from the Permanent Secretaries, Heads of Departments and other technical staff. The development partners also provided valuable comments. A core team in the Ministry of Finance spent a significant amount of time to put together the report. In this regard, we are grateful to: Dr. Kamau Thugge (Economic Secretary) who headed the team comprising of the entire staff of the Economic Affairs Department (EAD), and in particular Mr. Henry Rotich, Mr. Justus Nyamunga, Mr. Martin Masinde, Mr. John Njera, Mr. Robert Nyaga, Mrs. Mary Nguli, and Ms. Esther Kariuki. Valuable assistance in the preparation of the report was also received from various staff from other departments in the Ministry of Finance, especially from Mrs. Phyllis Makau of Budgetary Supplies Department; Mr. Jamshed Ali of Macro-Planning Department, Ministry of Planning and National Development; and staff from Central Bank of Kenya and Kenya Institute of Public Policy Research and Analysis (KIPPRA). Many thanks also go to the secretariat, Ms Elizabeth Bukhala and Mrs. Linda Omino of Economic Affairs Department, for their excellent logistical support.
JOSEPH K. KINYUA, CBS PERMANENT SECRETARY/TREASURY
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I. INTRODUCTION A:
Overview
1.1 This is the second Budget Strategy Paper (2006 BSP) prepared by the Government of Kenya as part of the efforts to ensure effective linkage between policies, planning and budgeting. It provides an updated resource envelop and presents a fiscal framework for the 2006/07 budget and the medium term1. It also sets firm ministerial ceilings in line with indicative ceilings outlined in the 2005 Budget Outlook Paper (2005 BOPA). 1.2 While significant progress has been realized in implementing the Medium Term Expenditure Framework (MTEF) in terms of linking policies, planning and budgeting and shifting budgetary resources to priority areas, the process continues to face some challenges. The Government will continue to address these challenges, which include:
Initiating an early comprehensive effort on costing all existing policies, programs, and projects;
Building links between recurrent and development budget; and
Developing a more programmatic approach to the budget, with a view to improving the linkage between expenditure and results.
1.3 In line with the MTEF process and to ensure credibility in the budget process, the ministerial ceilings presented in 2006 BSP are based on sectoral and ministerial ceilings highlighted in 2005 BOPA. For ownership at policy level, the 2006 BSP will be submitted to Cabinet for approval before preparation of detailed line item budget for 2006/07. 1.4 Consistent with the BSP for 2005, this year’s BSP continues to align Government spending priorities in the medium term to the National Development Objectives (as stipulated in ERS) and Millennium Development Goals (MDGs). It acts as the instrument for discussion/feedback on spending priorities and plans between the Government and stakeholders that will be reflected in the 2006/07 budget and the entire MTEF process. It also presents specific interventions to address some of the budget implementation challenges as highlighted by the recent Public Expenditure Review (PER 2005). B:
Organization of the Report
1.5 The rest of this report is organized as follows: Section Two and Three reviews recent economic developments and the medium term strategy, respectively. Section Four 1
The fiscal framework takes into account available domestic revenues, external assistance in form of projects grants and program support, and domestic borrowing.
1
presents the medium term sectoral resource allocation, including medium term expenditure allocations, while Section Five provides the details of the 2006/07 budget framework and Section Six discusses the details of ministerial ceilings and the priorities for 2006/07.
II. RECENT ECONOMIC DEVELOPMENTS AND PROSPECTS THROUGH END JUNE 2006 A:
Macroeconomic Developments
Growth 2.1 After registering a real GDP growth of 2.8 percent in 2003, the economy grew by 4.3 percent and 5.0 percent in 2004 and 2005 respectively (Table 1). The improved growth performance was driven mainly by notable growth in key sectors of the economy:
Agriculture: The sector grew by 2.5 percent in 2005 compared with 1.4 percent in 2004. The strong performance in maize, wheat, tea, horticulture, and sugar cane sub-sectors more than offset the poor performance in coffee, and livestock subsectors. Agricultural growth is expected to slow down in 2006 as the positive effects of the arrival of long rains are partially offset by the adverse effects of the drought experienced in late 2005 and early 2006;
Manufacturing: Output in the manufacturing sector expanded by 5.5 percent in 2005 compared to a 4.1 percent growth in 2004. Significant growth was recorded in the production of beer and cigarettes, soft drinks, dairy products, tyres, and cement. Despite the negative impact of drought on agro-based manufacturing, strong export demand is expected to result in continued growth of the manufacturing sector to about 6.8 percent in 2006;
Tourism: Tourism continued to record robust growth with arrivals increasing by 23 percent in 2005. The sector is expected to record further improvement in 2006 with visitor arrival growing by 16.5 percent in February 2006. This strong performance has had a positive effect on the growth of air transport and hotels and restaurants;
Building and Construction: The building and construction sector registered improved performance in 2005 underpinned by increased private sector construction as well as public spending on development projects, which resulted in cement consumption growth of 11 percent. The growth in construction is expected to continue in 2006 driven by private sector investment in response to growing economy and stable interest rates, continued remittances from abroad and further spending on development projects; and
Other sectors: The Electricity sub sector also grew by 9.6 percent in 2005 underpinned by increased generation of electrical power from 5,195 KW in 2004 to 5,547 KW. The growth in telecommunications sector continued to be
2
dominated by the mobile telephone with subscribers increasing by 30 percent to 5.6 million in 2005 from 4.3 million in 2004. Overall, the transport and telecommunications sector recorded 7.2 percent growth in 2005 and it is expected to register improved performance in 2006. 2.2 The overall performance of the economy would have been stronger were it not for some challenges, which include: (i) excessive focus on politicking, which has slowed the passage of critical Bills in parliament; (ii) continued high oil prices; (iv) the adverse effects of the drought on agriculture; and (iv) slow disbursement of donor funds, which has slowed progress in infrastructure development. Monetary, Inflation and Interest Rate 2.3 The 12-month growth of money supply (M32) decelerated from 11.3 percent in June 2005 to 11.8 percent in September and further to 10.2 percent by December 2005. Through end June 2006 M3 is expected to grow by 9.7 percent which would facilitate a non-inflationary increase in credit to private sector of at least 10.1 percent. The slowdown in money supply reflects a tighter monetary policy stance adopted by the Central Bank of Kenya (CBK). 2.4 As a result of the tight monetary policy stance, the improved weather conditions in the first half of 2005, and a strengthening of shilling exchange rate, overall inflation pressures eased from a peak of 19 percent in September 2004 to 3.7 percent in October 2005, before accelerating to 19.1 percent in March 2006 mainly on account of increases in food prices occasioned by the severe drought in most parts of the country. With the long rains coming on schedule (March-April) it is expected that the food inflation will ease in the months ahead, which should result in a significant reduction in inflationary pressures. By April 2006, overall inflation had eased to 14.9 percent. The core inflation rate, excluding food and energy, has been on a declining trend from 5.6 percent at endJune 2005 to 3.6 percent by end- April 2006, and is expected to remain below 5 percent through end of June 2006. 2.5 Reserve money of the Central Bank was broadly in line with target over the period July – October 2005, but was above the target in November and December 2005, mainly on account of the over-performance in NFA. The Bank has consistently exceeded the target for the NFA following purchases of foreign exchange from the inter-bank market. Reserve money is expected to grow by 7.6 percent by June 2006 (Figure 1).
2
Effective January 2006, CBK renamed M3X to M3 in line with harmonization of definition of monetary aggregates with East African Community partner states.
3
Figure 1: Indicators of Monetary Policy, 2003/04-2005/06 Net domestic credit to the Government
Credit to the rest of the economy
M3 (M2 plus foreign currency deposits)
Reserve money
35 30
In Percent
25 20 15 10 5 0 2002/03
2003/04
2004/05
2005/06 (Est.)
Fiscal Year
2.6 Interest rates on Treasury bills were stable throughout 2005, with the 91-day Treasury bill rate remaining within the range of 8 – 8.5 percent, while the 182-Day Treasury bill rate averaged around 9 percent (Chart 2). This stability was attributed to continued fiscal discipline and the confidence by the market participants that Government would contain its domestic borrowing requirements to the targeted amount. In early 2006, Treasury bill interest rates begun to trend downwards and by April 2006, the average 91days Treasury bill had declined to 6.8 percent, while that for the 182-days bill had declined to 7 percent. The lending rates also stabilized in the range of 12 and 13 percent, while deposit rates fluctuated between 3.8 and 4.5 percent during the period. Figure 2: Interest Rates (June – April 2006) Average lending rate
Average deposit rate
g03 Oc t-0 3 De c03 Fe b04 Ap r- 0 4 Ju n04 Au g04 Oc t-0 4 De c04 Fe b05 Ap r- 0 5 Ju n05 Au g05 Oc t-0 5 De c05 Fe b06
Au
n03
18 16 14 12 10 8 6 4 2 0
Ju
In Percent
91-day Treasury bill rate
Year
4
The Balance of Payments and International Reserves 2.7 The trade deficit widened in 2005 following an increase in imports by 33.7 percent which more than offset an increase in exports of 21.5 percent (Figure 3). The increase in imports is largely attributed to higher oil prices and imports of aircraft by Kenya Airways during the year. The trade deficit was partly financed by surpluses in the services account and capital and financial account. The overall balance of payment surplus was a smaller deficit of US$ 28 million. Following rescheduling of bilateral debt and accumulation of commercial arrears, the Central Bank was able to build foreign exchange reserves to a tune of US$ 1,766 million at the end of 2005 (equivalent to 3.1 months cover of imports of goods and non-factor services) up from US$ 1,514 million in December 2004. Figure 3: Growth of Exports and Imports Value (Annual Percentage Change) Export of goods and services
Imports of goods and services
8,000 7,000
In Million(US$)
6,000 5,000 4,000 3,000 2,000 1,000 0 2003/04
2004/05
2005/06
Fiscal Year
2.8 For 2006, the value of exports and imports in US-dollar terms is projected to increase by about 11.1 percent and 9.6 percent, respectively. It is expected that the surpluses in the services and the capital and financial accounts will cover the trade deficit, and together with the debt service rescheduling will permit a further build-up of international reserves to 3.5 months of import cover.
5
Table 1 :Selected Economic Indicators--2002/03-2005/06 2002/03
2003/04
Actual
Actual
2004/05 Prel. Act.
2005/06 Estimate
1,370
1,573
(Annual percentage change, unless otherwise indicated) National account and prices/1 Nominal GDP (Kshs. Bn)
1,090
1,208
Real GDP
1.6
2.6
4.7
Real GDP per capita
-0.5
1.5
2.7
3.0
GDP deflator
4.0
7.0
8.2
9.5
CPI Index (eop)
13.7
5.9
11.9
13.1
CPI Index excl. food, energy (eop)
3.7
3.1
5.6
5.0
Net domestic assets
12.0
12.2
7.0
6.0
Net domestic credit to the government
31.1
12.0
-17.8
11.0
4.9
Money and credit (end of period)
Credit to the rest of the economy
4.9
13.1
20.6
10.1
M3X (M3 plus FCD)
10.9
12.9
11.3
9.7
11.2
5.5
4.7
7.6
Reserve money
(In percentage of GDP, unless otherwise indicated) Investment and saving Investment
16.9
17.9
18.4
20.8
Central Government
1.9
1.9
3.3
5.5
Other
15.0
15.9
15.1
15.3
Gross National Saving
17.8
16.9
13.9
15.3
Central Government
-0.2
1.2
2.3
0.7
Other
18.0
15.7
11.5
14.6
Total revenue
19.8
21.1
21.2
20.7
Total expenditure and net lending
24.4
22.9
22.2
26.4
Overall balance (commitment basis) excl. grants
-5.1
-1.8
-1.0
-5.7
Overall balance (commitment basis) incl. grants
-3.7
0.0
0.1
-3.5
Net domestic borrowing
3.9
0.7
-0.5
2.0
Total donor support (grant & loans)
2.1
2.3
1.6
3.2
Exports value, goods and services
24.7
23.8
25.6
24.4
Imports value, goods and services
27.5
29.1
33.5
34.0
Current external balance, including official transfers
0.9
-1.0
-4.5
-5.4
Current external balance, excluding official transfers
1.1
-1.4
-4.5
-5.8
Gross international reserve coverage in months of next year (end of period)
3.3
2.8
2.7
3.3
41.4
Central government budget
Balance of payment
Public debt NPV of central government debt (end of period)
48.8
45.7
46.6
Domestic debt, net (end of period)
22.9
21.4
18.6
18.2
NPV of external debt (end of period)
25.9
24.3
28.0
23.1
6
Fiscal Outturn 2005/06 2.9 The overall Government revenue collections through end-December 2005 amounted to KShs.142.6 billion compared with the target of Ksh. 154.5 billion (Figure 4) the shortfall of Kshs.11.9 billion (or 7.7 percent) was largely explained in ordinary revenue collection amounting to KShs.5.5 billion mainly due to shortfalls in import duty occasioned by challenges experienced in implementing the customs automation system. Similarly, the Government expenditure during the same period totaled Ksh.164 billion, representing a shortfall of about 18 percent against a projected target of KShs.200 billion. The lower than expected expenditure reflected: (i) a lower wage bill following the intensified use of the Integrated Payroll and Personnel Data system and ; (ii) lower capital expenditures, both locally and foreign financed, owing to continuing difficulties in procurement. The overall fiscal position on a cash basis (after grants) by end of December 2005 amounted to a deficit of Ksh. 21.1 billion, which was funded by net foreign financing of Ksh.1.5 billion and domestic borrowing of Ksh. 19.6 billion. Figure 4: Fiscal Performance Indicators in Percent of GDP, 2002/03 - 2005/06 Total revenue
Total expenditure and net lending
Net domestic borrowing
Total donor support (grant & loans)
30
4.5 4
25
3.5 3 2.5 2
15
1.5
In Percent
In Percent
20
1
10
0.5 0
5
-0.5 0
-1 2002/03
2003/04
2004/05
2005/06 (Est.)
Fiscal Year
2.10 For the full fiscal year through end of June 2006, total revenue is expected to be lower than the program target of Ksh.327 billion by about Kshs.1.8 billion (or about 0.4 percent). At the same time, despite additional drought related expenditures amounting to KSh.13.8 billion, overall expenditure is expected to be about Ksh.5 billion lower than a program target of Ksh.420 billion. As a result, the overall fiscal deficit on a cash basis (after grants) is estimated at around KSh50 billion, compared with the programme target of KSh.60 billion. However, given the shortfall in external project and programme 7
assistance, domestic borrowing is estimated to increase to KSh.31 billion, including KSh.5.4 billion on-lent from the Central Bank, which was expected to be based on disbursements from the IMF for drought relief. With the on-going restructuring of expenditure, the share of wages as a percentage of GDP is expected to decline to 7.0 percent from 7.8 percent in the previous period (Figure 5).
Figure 5: Selected Government Expenditure, 2003/04 - 2005/06 Interest payments
W ages and benefits(civil service)
Capital Expenditure
Other
100% 90% 80% 70% Value
60% 50% 40% 30% 20% 10% 0% 2003/04
2004/05
2005/06 (Est.)
Fiscal Year
Debt Management 2.11
Kenya’s total debt stock amounted to 46.6 percent of GDP in June 2005 and is expected to decline to 41 percent by end June 2006, reflecting continued improvement in fiscal discipline and lower net external disbursements. These debt levels are consistent with Government’s debt policy objectives of achieving debt sustainability
2.12
In line with the Government policy to lengthen the maturity structure of its debt as well as deepen the domestic debt market, the ratio of Treasury bills to bonds is expected to move towards 30:70 by end - June 2006. The stock of net domestic debt as a percentage of GDP is expected to decrease from 18.6 percent in 2004/05 to 18.2 percent by end 2005/06.
2.13
In 2005/06 a policy decision was made not to pay arrears on security related contracts under investigation by the Kenya Anti-Corruption Commission (KACC)
8
and the Controller and Auditor General. In the medium term and after clearance by KACC, the arrears, including scheduled debt service on the payable contracts, will be paid. Further, in accordance with the recommendations of Controller and Auditor General, all security related projects will henceforth be budgeted under the relevant ministries/departments. 2.14
Currently, debt management process is weak and Debt Management Department (DMD) has no functional “Middle Office” to carry debt analysis to inform policy. In order to build this capacity, the Ministry of Finance with the assistance of the World Bank is in the process of establishing a Debt Management Office (DMO) which will: (i) acquire expertise to assist in drafting debt policy consistent with Kenya External Aid Policy (KEAP), (ii) design annual debt management strategies, (iii) draft periodic analytical debt management reports, (iv) undertake risk management analysis and (v) carry out debt portfolio analysis and review.
B:
Structural Reforms
2. 15 Improving governance remains a central pillar in ERS. To this end, various governance related reforms have been implemented over the last three years to improve efficiency and effectiveness in public service delivery and to facilitate private sector development in line with Government development objectives. These include: Governance and Rule of Law 2.16 Since 2004, the Government has made progress in implementing measures aimed at strengthening governance and building anti-corruption institutions in order to ensure an effective public sector and to facilitate a medium-term broad-based economic growth and poverty reduction in Kenya. These measures include:
Enacting and legislations;3
Implementing sector-wide reforms under Governance, Justice, Law and Order Sectors (GJLOS) aimed at scaling up the fight against corruption, improving transparency and accountability in public sector, improving access to justice and empowering the poor and marginalized;
Introducing administrative actions such as the ministerial Code of Conduct to improve accountability in public affairs management;
Releasing to the public reports on: (i) Goldenberg Commission of Inquiry; (ii) Presidential Commission on Illegal and Irregular Allocation of Public Land; and (iii) Investigations and Audit of security related projects and other suspect
operationalizing
governance
3
and
anti-corruption
related
Among these legislations are: (i) Public Officer Ethics Act 2003; (ii) The Anti-Corruption and Economic Crimes Act 2003 establishing the Kenya Anti-Corruption Commission; (iii) Financial Management Act 2004; (iv) Public Procurement and Disposal Act 2005; and (v) Privatization Act 2005
9
projects. Government has initiated the implementation of the recommendations in these reports; and ,
Implementing various governance and anti-corruption measures under the anticorruption strategy action plan to: (i) strengthen investigative and prosecutoral capacity; (ii) improve public financial management; (iii) scale down the role of public sector and bureaucracy; and (iv) conduct public education to stigmatize corruption.
2.17 Government is also in the process of developing a medium term National Anti-Corruption Plan involving all stakeholders, including the private sector, civil society, Parliamentary and Development partners. The plan should be launched before end of June 2006. Public Expenditure and Financial Management Reforms 2. 18 Under public expenditure management, the Government has implemented various reforms aimed at ensuring efficiency and deepening transparency and accountability. These include:
The enactment of the Public Procurement and Disposal Act to enhance transparency by ensuring that the procurement process of all Government services including security related contracts is in accordance with the Act;
Shifting resources to priority areas to align budgeting process with policy and development objectives;
Rolling out the Integrated Financial Management and Information System (IFMIS) to line ministries;
Enforcing expenditure commitment control system and adoption of international standard of classification of the budget based on 2001 Government Finance Statistics (GFS) framework;
Undertaking expenditure-tracking surveys to improve budget effectiveness;
Strengthening decentralization systems for efficient use of Local Authority Transfer Fund and Constituency Development Fund;
Enforcing clear guidelines for the exchequer issues to line ministries, including maintaining an up-to-date bank reconciliation; and
Initiating cost containment measures which have led to reduction in the cost of utilities in particular telephone services (introducing pre-paid services in all ministries).
Tax Reforms 2. 19 As part of efforts to facilitate trade, reduce compliance costs and ensure efficiency in the tax system, the Government has implemented a number of tax reforms, which include:
10
Implementing appropriate tax policies aimed at promoting efficiency, investment and economic growth;
Modernization of customs administration, including deployment of an automated customs services to reduce corrupt practices and facilitate trade;
Deepening the integration process of domestic taxes in order to improve taxpayer service delivery; and
Implementing various excise and transit cargo control measures to create a level playing for business growth and development.
Financial Sector Reforms 2. 20 Recent reforms under the financial sector aimed at ensuring efficiency and facilitating private sector development include:
Developing a legal and regulatory framework for microfinance institutions by drafting the Deposit Taking Microfinance Bill 2006 that is awaiting publication and debate by parliament;
Undertaking a review of the insurance industry and finalizing the Draft Bill on an independent regulatory authority for the insurance sector,
Developing a strategy for the overall financial sector, including that for the Development Finance Institutions (DFIs). The strategy, which also include restructuring and privatization of state-influenced banks, is intended to: (i) increase access of financial services to abroad section of Kenyans; (ii) enhance efficiency and competition; and (iii) improve the stability of the overall financial sector;
Deepening the supervisory capacity of the financial sector regulators, including Central Bank of Kenya over the financial institutions, by inter-alia, introducing risk based supervision guidelines; and
Developing an anti-money laundering legal framework, including drafting the Proceeds of Crime and Money Laundering (Prevention) Bill 2006 for presentation to Parliament.
Private Sector Competitiveness 2. 21 Improving the environment for private sector led growth remains one of the key pillars of the ERS. The Government has implemented various reform initiatives to improve private sector competitiveness and facilitate its development. These include, among others:
Finalizing the Private Sector Development Strategy (PSDS) to provide a framework for deepening the public-private sector partnership and to mainstream Government reforms aimed at facilitating private sector growth and competitiveness;
11
Continued implementation of the agreed EAC Customs Union tariff reduction process;
Deepening reforms aimed at removing administrative barrier to small traders, business and investment, including eliminating unnecessary licenses and streamlining others. In this latter context, the Working Committee on Regulatory Reforms for Business Activity in Kenya has completed reviewing more than 1,300 business licences and made recommendations on which ones should be retained, amalgamated or eliminated. The recommendations are expected to be implemented in coming financial year; and
Continued implementation of the national export strategy action plan which is expected to improve Kenya’s export performance.
Privatization and Public Sector Reforms 2. 22 In line with its stated policy objective of private led growth, the Government has made notable progress towards facilitating private sector participation in economic development process. Among the reform initiatives implemented include:
Introducing results based management through enforcement of performance contract for all heads of state corporations, including attracting private sector entrepreneurial and managerial expertise into previously state run companies;
Enactment of the Privatization Act 2005, which provides for the Privatization Commission to implement the privatization strategy. The establishment of the privatization Commission is expected shortly;
The concessioning of Kenya Railways to enhance efficiency in transportation sector and lower the cost of doing business;
The sale of 30 percent of Kenya Electricity Generating Company (KENGEN) to the public through an Initial Public Offer to strengthen transparency and accountability and enhance corporate governance; and
And Governments on-going plans to privitize Kenya Telekom and restructure of the Mombasa port facility, especially the container facility to improve efficiency and reduce cost of doing business thereby enhancing Kenya’s external competitiveness.
C:
Equity and Poverty Reduction
In line with policy commitment regarding social sector development to enhance equity and reduce poverty as stipulated in ERS, the Government has implemented various reforms and interventions covering education, health, agriculture and rural development. These reforms include:
12
Education The Government has continued to provide for free primary education as part of its efforts to improve universal access to education and ensure quality. To this end, the Government has implemented measures to improve financial management and accountability in schools, rationalize the deployment of teachers, effectively target bursary to poor and orphaned children, expand and improve educational facilities countrywide, and provide adequate teaching and learning materials in all school. Health Recent reforms in the health sector have focused on reorienting policy towards preventive healthcare provision, while ensuring efficiency and effectiveness in healthcare service delivery countrywide. To this end, various reforms have been implemented over the last three years to: (i) strengthen Kenya Medical Supplies Agency capacity, including its procurement procedures and accountability systems; (ii) reduce extent of waste in supply chain; and (iii) strengthen supervision capacity of medical supplies in rural health facilities. These measures have resulted in measurable improvement in accessing drugs and medical supplies in health facilities countrywide. Reforms under Agriculture and Rural Development Under agriculture and rural development, the government has implemented various structural reforms aimed at improving efficiency and productivity as part of its efforts to achieve growth and poverty reduction objectives. These reforms include: (i) amending the Coffee Act 2001 to enhance regulatory capacity of the Coffee Board and allow for private sector participation in the coffee industry; (ii) publishing a bill to amend the Pyrethrum Act in order to separate regulatory and commercial functions of the Board. The bill has been submitted to parliament for debate and enactment; (iii) improving governance in the co-operative sector, including building managerial and technical capacity among key players; (iv) reviewing the national livestock policy, dairy policy and formulation of the fisheries policy; and (iv) improving extension service delivery countrywide. The Millennium Development Declaration commits member countries to promote equality and promote their effective participation in poverty alleviation, hunger and disease. It is estimated that women constitute over 70 per cent of all employees in the agricultural sector, largely in the form of casual or seasonal employees. However, they have little security around these jobs, wages are low and there are no employment benefits such as a pension scheme. In line with the IP-ERS priorities of alleviating gender disparities in education, health, agriculture, and employment, the Government has embarked on implementing the policy on Gender and Development. The policy will facilitate mainstreaming the needs and concerns of women in areas of development process especially agriculture.
13
III. MEDIUM TERM STRATEGY, 2006/07 - 2008/09 A:
Introduction
3.1 The proposed medium term macro-economic framework largely reflects the Government’s plan to sustain and accelerate the recent economic recovery. The strategy essentially involves continued macro-economic stability underpinned by a deepening of various structural reforms covering areas of governance and anti-corruption, financial sector reforms, restructuring and privatizing state-influenced enterprises, and expenditure management, including reorienting expenditures towards priority areas in support of economic growth and poverty reduction. 3.2 The main focus of the medium term strategy is to move decisively towards the Millennium Development Goals (MDGs). In this context, the strategy involves achieving: rapid and sustainable economic growth in order to reduce poverty on a sustainable basis; and reallocate resources towards the health and education sectors. 3.3 Budgetary support from both bilateral and multilateral sources has become increasingly politicized and unpredictable. Therefore, reflecting Government’s continued commitment to ensure sustainability and predictability in fiscal policy, the 2006 BSP excludes both bilateral and multilateral budgetary support from the fiscal framework. As highlighted in the 2005 BSP, tightening fiscal policy stance in response to expected shortfall in external resources involves difficult choices that may include cutting expenditure in key development and social sectors or increasing domestic financing. Cutting expenditures creates a high degree of uncertainty to line ministries and as a result adversely affects budget implementation, while increasing domestic financing on an unpredictable manner injects uncertainty in the financial markets and could put upward pressure on interest rates and crowds out private sector investments and growth. Moreover, it also increases government’s interest expenditure, which in the long run may threaten fiscal sustainability. The cautious approach adopted in this BSP is therefore aimed at ensuring fiscal sustainability and predictability. 3.4 Notwithstanding the conservative fiscal stance taken in the medium term, the Government remains strongly committed to implementing key reforms in the areas of public expenditure management, governance, privatization and financial sector as part of efforts to ensure efficiency and effectiveness in public service delivery. However, should, in the course of implementing these programmes, bilateral and multilateral budgetary support materialize, the additional resources will be used to scale-up expenditures on social sector (health and education) and productive sector programs (especially infrastructure and agriculture), and in the reduction of domestic debt. The additional resources would, therefore, be used toward accelerating Kenya’s progress towards the MDGs.
14
B:
The Medium-Term Macroeconomic Framework
3.5 The proposed medium term macroeconomic framework builds on the recent economic developments and various structural reforms implemented in the recent past. It is based on continued economic growth recovery driven mainly by continued sectoral growth in tourism, transport and communication, manufacturing and building and construction. Specifically, the medium term objectives include: (i) increasing real GDP growth from 4.7 percent in 2004/05 to 6 percent by 2008/09; (ii) reducing the overall rate of inflation to below 5 percent throughout the medium-term; and (iii) strengthening the balance of payments to facilitate a build-up of gross international reserves to the equivalent of 3.7 months of imports of goods and non-factor services. Table 2 and Figure 6 provide the highlights of expected performance in key economic variables in the medium term:
Table 2: Medium Term Macroeconomic Framework (In percent) Real GDP growth Overall Inflation (e.o.p ) International Reserves (Months of Imports cover)
2004/05 4.7 11.9
2005/06 4.9 13.1
2006/07 5.5 4.1
2007/08 5.9 4.1
2008/09 6.0 3.5
2.7
3.3
3.5
3.7
3.8
Figure 6: GDP Growth, Inflation and Gross Reserves, 2004/05 -2008/09 Real GDP
CPI Index (eop)
2004/05
2005/06
International reserves (months imports cover)
14 12
In Percent
10 8 6 4 2 0 2006/07
2007/08
2008/09
Fiscal Ye ar
3.6 In order to achieve these objectives, the government is committed to the following: (i) sustaining an appropriate environment for private sector investments and savings; (ii) prudent monetary and fiscal policies; (iii) deepening structural reforms to 15
enhance efficiency of resource allocations; and (iv) continuing to improve and strengthen the governance infrastructure in order to reduce corruption. 3.7 Because of the impact of drought, inflation for 2005/06 is expected to be about 13.1 percent. In the medium term, with no further exogenous shocks, such as continued drought or higher oil prices, both the overall and underlying rates of inflation are expected to be below 5 percent in the medium term. Investments and Savings 3.8 The higher growth in real GDP in the medium term is predicated on increased savings and investments, and on increasing total factor productivity (TFP)4. Gross domestic investments are projected to increase from about 20.8 percent of GDP in 2005/06 to 24.1 percent in 2008/09 reflecting an increase in both public and private sector investment. Gross national savings are projected to increase from 15.3 percent of GDP to 19.1 percent over the same period. Therefore, in order to achieve the projected growth targets, external savings, of at least 5.0 percent of GDP per year will be required. Table 3: Investment and saving (as a percentage of GDP) 2004/05
2005/06
2006/07
2007/08
2008/09
18.4 3.3 15.1 13.9 2.3 11.5
20.8 5.5 15.3 15.3 0.71 14.6
21.9 6.6 15.3 15.3 1.0 15.5
23.4 7.0 16.4 16.4 2.3 15.8
24.1 7.1 17.1 19.1 2.9 16.2
Investment and saving Investment Central Government Other Gross National Saving Central Government Other
4
To have an informed position on productivity issues, the Government will fully operationalise the Productivity Centre of Kenya. The centre will among other things initiate the development of a productivity policy, undertake a diagnostic survey, review institutional structures and carry out advocacy activities for laws and standards that promote best practices.
16
Figure 7: Investment and Savings (In Percent of GDP) Investment Central Government
Gross National Saving
External
25
In Percent
20 15 10 5 0
2004/05
2005/06
2006/07
2007/08
2008/09
Fiscal Year
3.9 The projected real GDP growth and the level of gross investments required to achieve these growth rates implies only a modest reduction in the capital-output ratio, or alternatively, a slight improvement in total factor productivity (TFP). However, given the government’s commitment to adhere to macro-economic stability and to implement a wide range of structural reforms, including the restructuring and privatization of stateinfluenced enterprises and banks, and to improve governance, the improvement in TFP should be significant. It is therefore expected that the projected growth is achievable provided the reforms measures are put in place. Monetary and Exchange Rate Policies 3.10 Achieving the growth objective will require maintaining appropriate monetary and exchange rate policies, continued fiscal discipline, and a deepening of structural reforms. The Government’s monetary policy will continue to aim at maintaining a low rate of inflation, strengthening international reserves, and providing space for a substantial increase in credit to the private sector to support productive activities. Over the period 2006/07 – 2008/09, monetary policy will aim at keeping underlying inflation below 5 percent. The monetary policy framework will also be refined to improve policy signaling so as to effectively deal with inflationary pressures. Broad money growth is targeted at between 10 – 11 percent in 2006/07 – 2008/09, consistent with the forecast increase in economic activity and the inflation target. 3.11 By maintaining low inflation and stable positive real interest rates during the medium term, bank credit to the private sector is expected to grow by 12 – 14 percent to support increased economic activities. While the interest rates are expected to trend downwards and to boost private sector investments as a result of the projected decline in domestic debt and the low rate of inflation, the improvement in efficiency of the financial
17
sector following the restructuring of state-owned banks is expected to provide further impetus for increased savings and access of financial services by the poor. 3.12 In regard to exchange rate policy, the Government will continue maintaining a flexible exchange rate system. Nonetheless, it will monitor closely developments in real effective exchange rate and other indicators of external competitiveness to ensure that Kenya’s exports of goods and services remain competitive. C:
The Medium-Term Fiscal Framework
3.13 The medium term fiscal framework focuses on: (i) maintaining a strong revenue effort; (ii) containing growth of total expenditures while ensuring a shift in the composition of expenditure from recurrent to capital expenditures; (iii) ensuring a significant shift in resource allocation towards ERS priority social and economic sectors; and (iv) containing the growth of domestic debt to a sustainable level to facilitate private sector credit expansion for investment and growth. Table 4: Medium-Term Fiscal Framework Total Revenue Expenditure and Net Lending Deficit (incl. grants) o/w External Financing o/w Domestic Financing
2004/05 21.3
2005/06 20.7
2006/07 20.7
2007/08 20.9
2008/09 21.0
22.3 0.1 0.6 -0.5
26.4 -3.5 1.5 2.0
25.9 -3.1 1.5 1.6
25.5 -2.5 1.2 1.3
25.2 -2.2 1.4 0.8
Figure 8: Medium-Term Fiscal Framework Total Revenue
Expenditure and Net Lending
Deficit (incl. grants )
2004/05
2005/06
2007/08
30.0 25.0
In Percent
20.0 15.0 10.0 5.0 0.0 -5.0 2006/07 Fis cal Year
18
2008/09
Revenue Policy 3.14 Despite the negative effects of the drought experienced in the last quarter of 2005 and first quarter of 2006, revenue performance in the medium term remains optimistic. Domestic revenues are expected to average about 21 percent of GDP in the medium term underpinned by continued implementation of tax administration and customs reforms and modernization programmes. Efforts will be made to ensure that all remaining customs related tax disparities within East African Community are harmonized in order to create a level playing ground for business and consumers in the region. In addition, reforms under exemptions will be implemented to protect revenue base and boost revenue collection. These reforms are expected to improve efficiency in tax processing, facilitate trade and result in increased revenue yield thereby making it possible to use tax policy for supporting policy priorities or reducing the tax burden. Expenditure Policies 3.15 The expenditure policy framework in the medium terms aims at ensuring efficiency and effectiveness in the implementation of development policy. As part of efforts to link policy with budgeting, reforms in the expenditure and financial management will be deepened, and growth of non-priority expenditures will be contained in order to create fiscal space for financing priority policy areas such as the social sectors, agriculture and physical infrastructure, which are key to sustainable economic growth and development. 3.16 Total expenditures are projected to remain broadly unchanged at around 25.8 percent of GDP over the medium-term, as a decline in recurrent expenditures are offset by higher development spending. Reflecting the ERS's objective of restructuring expenditures in favor of infrastructure, the share of capital spending in total expenditures is projected to rise from 15 percent in 2004/05 to 27.8 percent in 2008/09--in terms of GDP, capital expenditures are projected to rise from 3.4 percent of GDP in 2004/05 to 7.1 percent in 2008/09. 3.17
The following are the Government’s expenditure priorities for 2006/07-2008/09:
Interest payments: Domestic interest payments are expected to rise from 1.7 percent of GDP in 2004/05 to 1.9 percent in 2006/07 and thereafter decline to 1.6 percent by 2008/09. The rise in domestic interest payments in 2006/07 is due to issuance of recapitalization bonds amounting to KSh. 22 billion for the restructuring of the National bank of Kenya and Consolidated Bank;
Reducing the wage bill: Government’s wage policy will aim to reduce the ratio of the wage bill-to-GDP from 7.8 percent in 2004/05 to 6.6 percent by 2008/09 -this trend takes into account the civil service and teachers’ salary awards. To ensure the targeted wage reduction is achieved, the Government has put in place a pay policy document that outlines the key principles that guide increases in pay and the measures to ensure overall adherence to the wage targets. The Government will also continue to implement the Voluntary Early Retirement 19
scheme (VER) with the objective of downsizing the civil service. The wage projections in the medium term may need to be revised to allow for recruitment of medical personnel in order to aim at reaching the optimum level of personnel for the health sector and to move toward achieving the MDGs;
Reducing the stock of pending bills: Government policy is to eliminate pending bills and establish a commitment control system that ensures that commitments are captured accurately and decisions made to clear them in good time so as to safeguard against a re-emergence of arrears. The stock of pending bills has started to fall due to strict adherence to financial discipline in line Ministries. The government appointed a Pending Bills Closing Committee, which is about to finalize the exercise shortly. The budget for 2005/06 includes an estimated Kshs.2 billion for securitization of some of domestic arrears that may be identified by the Committee and another estimate of Kshs. 3 billion in 2006/07;
Reducing transfers and subsidies: In FY 2005/06 transfers to most parastatals were reduced by 15 percent. Over the medium-term, transfers to these parastatals will be held at the same nominal level as in 2005/06. As a result, total transfers to parastatals and institutions of higher learning, which account for 1.5 percent of GDP in 2005/06, will be reduced to 1.1 percent by 2008/09, which should free up resources for core poverty expenditures. During the medium term, the Government will deepen the parastatal reform process, by continuing with privatization process and the use of performance contracts for Chief Executives of parastatals, with a view to further reduce the amount of transfers to these institutions;
Resolving stalled projects: Stalled projects have been generating pending bills as idle equipment and contractors continue to submit claims. The government has managed to terminate at least 50 of these projects and completed at least 40 projects. In the financial year 2005/06, Kshs 2 billion has been provided for completion of stalled project. This annual provision will be made through out the medium-term in order to complete the stalled projects by the year 2008/09. Priority will be given to health related projects and those related to provision of housing, particularly to the disciplined forces; and
Increasing core poverty expenditures: The Government has updated the criteria for core poverty programmes in order to make it more comprehensive. The ministries are expected to ensure that the allocations to the core poverty programmes reflect the outcome of the Ministerial Public Expenditure Review and that allocations to core poverty programs should be increased by at least 15 percent.
Development expenditures: The government is concerned with the low absorptive capacity of development resources in the last few years. This has been due to delays caused by the lengthy procurement procedures and shortfalls in foreign financing. The Minister of Finance is undertaking a review of the factors hindering utilization of donor funds and will provide recommendations on how to raise the rate of utilization of both local and external resources for development expenditure. With the recent passage of the Public Procurement and Disposal of
20
Assets Act and the implementation of the cash management system, the government will increase the utilization of development resources so as to ensure goods and services are delivered on time.
Cost containment measures: The Government has developed a transport policy which will reduce the cost of transport and eliminate inequality and wastage in use of official transport. In addition, through development of efficient IT and promotion of e-government, the Government will in medium term seek to reduce administrative cost in purchase of stationary and advertising.
Enhancing participation of the youth: The youth is expected to play a central role in the implementation of medium term development programmes. To this end, various initiatives aimed at tapping on the resourcefulness of the youth will be implemented. These include: (i) rehabilitate and develop youth polytechnics with the aim of enhancing vocational training and acquisition of technical skills to enable young people to secure employment or become self-employed; (ii) establishing a Youth Enterprise Fund to help young people access capital to start or expand business; (iii) creating business incubators to encourage entrepreneurial development among the youth; (iv) using labor intensive methods in the construction of physical infrastructure; (v) deepening reforms in the ICT sector to accelerate its growth and create more business opportunities; and (vi) speed up reforms in the agriculture sector to improve the sector’s productivity and create more jobs in the rural areas.
Overall Fiscal Deficit 3.18 Arising from these revenues and expenditure measures, the overall fiscal deficit (on a cash basis) is projected to narrow gradually from 3.2 percent of GDP in 2005/06 to 2.1 percent in 2008/09. As a result, despite the exclusion of any external budgetary support, the net domestic borrowing requirements are expected to decline from 2.0 percent of GDP in 2005/06 to 0.8 percent by 2008/09. Consequently, the domestic debtto-GDP ratio should decline gradually from around 22.7 percent in 2005/06 to about 21 percent in 2008/09. This is consistent with the Government’s stated objectives domestic debt sustainability aimed at facilitating expansion of private sector credit for investment and economic growth. D:
Medium-Term Structural Reforms
3.19 As part of efforts to ensure efficiency and effectiveness in budget implementation and public service delivery, Government will continue to implement priority structural reform measures in the medium term. The implementation of these measures is expected to improve the business environment, facilitate private sector growth and contribute towards economic growth and development. Some of the key reforms will include: Governance and Rule of Law 3.20 In the medium term, the government will continue to strengthen governance and build anti-corruption institutional capacity by:
21
Strengthening prosecutorial capacity. To this end, various measures will be implemented including: (i) hiring lawyers/special prosecutors from the private sector, both locally and regionally; (ii) set up a Special Prosecution Unit; (iii) review terms and working conditions of legal staff in the Attorney general Chamber; (iv) increase number of judges from 50 to 70; and (v) publish and enact a Witness Protection Act.
Implementing fully various governance and anti-corruption strategies, including the National Anti-Corruption Plan;
Deepening the implementation of sector-wide governance reforms aimed at scaling up the fight against corruption, improving transparency and accountability in public sector, improving access to justice and empowering the poor and marginalized;
Concluding investigation and prosecution of (i) Goldenberg cases; (ii) Illegal and Irregular Allocation of Public Land cases; and (iii) Anglo Leasing cases.
Public Expenditure and Financial Management Reforms 3.21 Various expenditure and financial management reforms will be implemented in the medium term to improve efficiency in use of public resources. These reforms include:
Implementing expenditure management reforms underpinning realization of PEMAP benchmarks;
Conducting expenditure-tracking surveys to inform budget implementation and improve its effectiveness in achieving development goals;
Strengthening procurement, including making operational the Public Procurement Oversight Authority;
Strengthening capacity for efficient and effective use of devolved funds under Local Authority Transfer Fund and Constituency Development Fund;
Deepening enforcement of guidelines for the exchequer issues to line ministries, including maintaining an up-to-date bank reconciliation;
Implementing fully the integrated financial management and information system (IFMIS) to all line ministries; and
Above all the Government has developed a Public Financial Management Reform Strategy whose component will be implemented starting in the Financial Year 2006/07.
Tax Reforms 3.22 To ensure continued strong revenue performance underpinned by improved taxpayer service delivery, and a level ground for facilitating trade and business growth, various tax reforms will be implemented in the medium term. Some of these reforms include:
22
Implementing appropriate tax system to promote technology adoption, efficiency, investment and economic growth,
Deepening the customs reforms and modernization safeguard tax base and facilitate trade,
Implementing an integrated information management system for all domestic taxes in order to improve taxpayer service delivery and improve compliance, and
Implementing various excise and transit cargo control measures to create a level playing ground for business growth and development.
Financial Sector Reforms 3.23 Under the financial sector, the Government will implement a number of measures to ensure efficiency, deepen financial market and to facilitate private sector development. The reforms include:
Enacting the Deposit Taking Microfinance Act to provide legal and regulatory framework for the development of microfinance institutions,
Enacting and making operational the legal and regulatory framework for the insurance industry,
Implementing the Development Finance Institutions (DFIs) restructuring strategy, and
Enacting and making operational the Proceeds of Crime and Money Laundering (Prevention) Act.
Private Sector Competitiveness 3.24 In order to improve the environment for private sector development, the Government wills, in the medium term implement the Private Sector Development Strategy (PSDS) to provide a framework for deepening the public-private sector partnership and to mainstream Government reforms to the sector. In addition, reforms aimed at reducing administrative barriers to trade will be implemented. In light of the expected streamlining of the licensing regime, it will be important to establish an overview of remaining licenses and to prevent the re-introduction of licenses, which have been repealed. Accordingly, a Regulatory Registry will be established to provide easy access to all valid business licenses, and a Quality Control Unit will be established to ensure that appropriate laws and regulations are complied with before new licenses are approved and admitted to the Regulatory Registry. Privatization and Public Sector Reforms 3.25 In line with the ERS objective of private sector-led growth, privatization and public sector reforms will be deepened in the medium term to expand private sector participation in the economic development process. To this end, the Privatization Commission will be established and made operational to implement the privatization
23
strategy. In addition, the public sector reforms including result-based management will be deepened.
IV. MEDIUM-TERM SECTORAL RESOURCE ALLOCATION
A:
Criteria for Resource Allocation
4.1 The key features of sectoral allocation are anchored on the need to finance investment and to directly support economic growth and reduce poverty. The key resource allocation mechanism will therefore focus on measures to: (i) increase incomes for the poor, (ii) improve the quality of life, and (iii) improve security and governance. 4.2 As noted in BOPA 2006, the key features of sectoral resource allocation for 2006/07 will involve: (i) identifying ministerial strategic priorities from the ERS and interventions required to achieve the MDGs; (ii) giving priority to core poverty programmes (MDG interventions)5; (iii) using the Monitoring and Evaluation (M&E) framework of the ERS to generate the performance indicators targets; (iv) ranking of the priorities by individual SWGs in terms of their contribution to achieving the overall ERS objectives; (v) ensuring transfers to Semi-Autonomous Government Agencies(SAGAs) are maintained at the same level as in 2005/06, a level which already reflects the 15 percent reduction from the previous year; and (vi) adjustment of non-core expenditures to cater for the above indicated priorities. B:
Reorienting Expenditures
4.3 Given that the current resource allocation criteria are the same as in the 2005 BSP, the medium term distribution of sectoral resources will, therefore, remain in line with the levels indicated in 2005 BSP (see the table below and Figure 10 for details). Specifically, it is expected that:
Health: The share of total resources going to the health sector will increase from 8.6 percent in 2005/06 to 9.4 percent in 2008/09. The increased availability of resources should help fund HIV/AIDS interventions, and healthcare infrastructure, affordable drugs, and training of staff as part of the initial implementation phase of the National Social Health Insurance Scheme.
Education: The share of resources going to education, including the teacher’s salary increase through 2008/09, is expected to remain broadly unchanged (at around 27-28 percent of total resources), since the sector is already receiving a large share of resources.
Agriculture: Given the need to implement the Strategy for the Revitalization of Agriculture (SRA) to address low agriculture productivity, poverty and
5
MDG interventions go beyond what has been defined as core poverty programmes.
24
unemployment in rural areas, the share of resources allocated to the agriculture sector is projected to increase sharply from 2.4 percent in 2005/06 to 3.5 percent in 2008/09. For agriculture and rural development sector as a whole, the share of resources is projected to increase from 5.3 percent to 7.3 percent over the same period. Spending on the Social and Economic Sectors (In percent of total expenditure) 2005/06 2006/07 2007/08 Social Sectors Health Education Economic Sectors Agriculture and Rural Development o/w Agriculture Infrastructure Other
36.2
Total
36.7
2008/09
36.8
8.6
9.0
9.1
9.4
27.6
27.7
27.7
28.2
24.5
26.0
27.4
28.9
5.3
6.2
6.9
7.3
2.4
3.0
3.3
3.5
19.2
19.8
20.5
21.6
39.3
37.3
35.9
33.5
100
100
100
100
Infrastructure: The share of resources going to physical infrastructure will rise from 19.2 percent in 2005/06 to 21.6 percent in 2008/09 with priority given to expanding and improving maintenance of the road network and other public works. Other areas that will benefit from increased infrastructure resources include access to water resources, and provision of affordable energy.
Priority Sectors: Taken together, the combined share of resources to health, education, agriculture and rural development and infrastructure is expected to raise from 60.7 percent in 2005/06 to 66.5 percent in 2008/09 in line with the ERS objectives. In order to improve preparedness for future droughts and food security, the Government will continue ring fencing spending for water programmes in the arid and semi-arid areas.
25
37.6
Figure 9: Expenditures on Social and Economic Sectors
Social Sectors
Economic Sectors
Other
40 35
In Percent
30 25 20 15 10 5 0
2005/06
2006/07
2007/08
2008/09
Fis cal Year
C:
Additional Budgetary Support
4.4 As mentioned earlier in light of uncertainties surrounding the disbursement of budgetary support, the Government has excluded not only bilateral budgetary support from the fiscal framework, but also that of multilateral institutions. Therefore, just like in the 2005/06 Fiscal Year, the BSP2006 will not have any financing gaps to be covered by funding from either of these sources. For this reason, the Government will continue to intensify its revenue collection efforts while at the same time rationalising and cutting back expenditure on non-priority expenditure areas such as transfers. 4.5 The Government remains fully committed to implementing various structural reforms including those under governance. It is possible that the implementation of these reforms could trigger project or budgetary funding amounting to about USD450 million (or KShs.33.75 billion) per year. Such additional resources would be used to scale up the non-wage core priority poverty programs with a view to increasing their ratio to GDP from about 1.5 percent in 2004/05 to 3 percent in 2008/09. This is in line with the priorities identified in the ERS (see Tables 10a and 10b for the list of core priority programs that would be scaled up). Overall, additional external support will primarily go towards reducing domestic debt and scaling up programs in the social (MDG interventions) and economic sectors. 4.6 As a result of these resources, the shares of health, education, agriculture and infrastructure would be boosted accordingly (Figure 10). In particular, it is estimated that by FY 2008/09 the share of resources destined for the health sector would rise to reach 10.3 percent of total expenditures compared with 9.4 percent in the baseline. Similarly, resources earmarked for agriculture and rural development would increase to 8.3 percent from 7.3 percent in the baseline while physical infrastructure will increase to reach 21.8 percent compared with 21.6 percent in the baseline (see table below).
26
Spending on the Social and Economic Sectors After Additional Budget Support [check table] (In percent of Total Government Expenditure) BASELINE SCENARIO 1/ 2005/06 Social Sectors
2006/07
ALTERNATIVE SCENARIO 2/
2007/08
2008/09
2005/06
2006/07
2007/08
2008/09
36.
36.7
36.8
37.6
36.2
37.5
37.6
38.3
Health
8.6
9.0
9.0
9.4
8.6
10.0
10.0
10.3
Education
27.6
27.7
27.7
28.2
27.6
27.5
27.6
28.0
Economic Sectors Agriculture and Rural Development
24.5
26.0
27.3
28.9
24.5
27.6
28.7
30.1
5.3
6.2
6.9
7.3
5.3
7.5
8.0
8.3
o/w Agriculture
2.3
2.9
3.3
3.5
2.3
2.8
3.1
3.3
3.0
3.3
3.6
3.8
3.0
3.1
3.4
3.6
Infrastructure
Other
19.2
19.8
20.5
21.6
19.2
20.1
20.7
21.8
Other
39.3
37.3
35.9
33.5
39.3
34.9
33.7
31.6
Total
100
100
100
100
100
100
100
100
0
1.7
1.5
1.5
Domestic Debt Reduction 1/ Includes budgetary support included in the PRGF
2/ Includes potential additional donor support from bilaterals averaging about US$450 million per year.
Figure 10: Changes in the Composition of Social and Economic Expenditures after Additional Budgetary Support Social Sectors
Economic Sectors
Other
Domestic Debt Reduction
40 35
In Percent
30 25 20 15 10 5 0
2005/06
2006/07
2007/08
2008/09
Fiscal Year
V. 2006/07 BUDGET FRAMEWORK
A:
Macroeconomic Outlook
5.1 The 2006/07 budget framework will be set against the background of the mediumterm framework and the Government’s strategic objectives stated in the ERS. Specifically, the framework aims to promote economic growth and macro economic stability, strengthen governance, improve infrastructure and invest in the human capital development especially of the poor. 27
5.2 Assuming the current long-rains continue and that the short-rains later in the year come in time, real GDP is expected to grow by about 5.5 percent in 2006/07. The 2006/07 FY will see a sustained growth in mining and quarrying, construction, tourism, horticulture, transport and communication, and in the financial sector. Both agriculture and manufacturing are expected to rebound from the drought-induced weak performance in 2005/06. 5.3 The overall annual average inflation rate is expected to decline to 4.1 percent in 2006/07 from 13.1 percent in 2005/06, mainly on account of a return to more normal weather conditions, which should result in significant slow down in food price inflation. The underlying inflation will remain below 5 percent reflecting continued prudent monetary policy. Money supply, M3, is expected to grow by about 10.5 percent through June 2007, and to 11.4 percent in the medium term while, private sector credit is expected to grow by about 12 to 14 percent to support the projected economic activity. Gross international reserves of the Central Bank are targeted to increase gradually to 3.8 months of import cover in 2008/09 reflecting the slow disbursement of budgetary support assumed in the framework.
B:
Fiscal Framework
5.4 The Government remains committed to containing expenditures and re-orienting outlays toward growth and poverty-reducing programs. The Government further aims to maintain a stable and predictable level of domestic borrowing in order to sustain the relatively stable interest rates witnessed in 2005/06. This will, in addition, contain expenditures on interest payments and leave enough credit in the financial system for non-inflationary expansion of credit to the private sector. In light of the exclusion of external budgetary support in the 2006/07 budget, maintaining strong efforts in revenue collection will be critical so as to fund expected additional spending in infrastructure, health, education and other priority sectors. Revenue Projections 5.5 Against the backdrop of this macroeconomic outlook, the 2006/07 budget will target revenue collection of about 21 percent of GDP. As alluded to earlier, this performance will be supported by on-going reforms in tax and customs administration. The streamlining of tax exemptions in line with other East African Community partner states should help to protect the revenue base. Expenditure Forecasts 5.6 Overall expenditures are projected to decline slightly from 26.4 percent of GDP in 2005/06 to 25.9 percent in 2006/07, largely as a result of the absence in 2006/07 of the large outlays for drought relief, which amounted to about 1 percent of GDP in 2005/06. Excluding drought related expenditures, overall government spending in 2006/07 is expected to remain broadly unchanged from the previous year at around 25.5 percent.
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However, in line with the government strategy to shift resources toward capital expenditures, outlays for recurrent expenditures is expected to decline by 1 percent of GDP, while development expenditures increase by 1.2 percent of GDP.
Recurrent expenditures: Recurrent expenditures are expected to fall from 20 percent of GDP (Ksh. 314 billion) in 2005/06 to 19 percent of GDP (Kshs. 336 billion) in 2006/07, on account of a moderately lower spending on foreign interest payments, the wage bill, and pensions and other expenditures. Recurrent expenditures are forecast to grow at a slower rate than overall expenditures, thereby providing room for development expenditures to grow at a faster rate;
Consolidated fund services: These ‘first call’ expenditures are dominated by interest payments and pensions. Total interest payments are expected to range between 2.2-2.4 percent of GDP in 2005/06-2006/07 as a decline in the external component is offset by higher domestic payments related to bank restructuring and the securitization of domestic arrears. In nominal terms, interest expenditure is projected to rise from Ksh. 38.2 billion in 2005/06 to Ksh. 39.5 billion in 2006/07;
Wages and salaries: Government policy is to restrain growth in wage payments to free resources for development purposes. The Government, however, has commitments relating to the teachers’ and civil service salary awards. The wage bill is projected to decline from 7.3 percent of GDP in 2005/06 to 7.0 percent in 2006/07, equivalent to about Kshs.124 billion;
Transfers: Government will continue to lower the share of resources devoted to transfers to parastatals and institutions of higher learning to provide fiscal space for expenditures on core-poverty programs. Following the 15 percent reduction in resource allocations to these institutions in 2005/06, most allocations during 2006/07 will be maintained at the same nominal level as in 2005/06;
Development and net lending: A core requirement of the ERS is that development expenditures should raise as a percent of both the budget and GDP. Development expenditures are expected to rise from 5.5 percent of GDP in 2005/06 to 6.7 percent of GDP in 2006/07 (equivalent to Ksh. 119 billion), and to increase by 36.6 percent over 2005/06 compared with a growth of 10.5 percent for overall expenditures. Expenditures are therefore forecast to be more development oriented, and with focus on improving the road network, urban transport, access to water, reliable and affordable energy, and efficient telecommunications system;
Core poverty programmes: Government policy is to maintain the non-wage component of core poverty programmes at 4% percent of GDP. Expenditures on these programs will, therefore, be expected to rise from Ksh. 79 billion in 2005/06 to Ksh. 88 billion in 2006/07, a 10.6 percent increase;
Water programs in arid and semi-arid areas: Provision of portable water within reasonable walking distance will reduce the time spent by women and girls on water collection, allowing for increased school attendance. It will also reduce water related illness thereby lowering the burden on women as care-givers and
29
also on health services. The Government will continue to provide Ksh.1.5 billion towards water programs in the arid and semi-arid areas;
Drought: In the event a recurrent of drought conditions in the next financial year, the government has allocated a total of Ksh. 2 billion for drought expenditures and another KSh. 2 billion for contingencies;
Enhancing participation of the youth: The youth constitutes about 75 percent of the Kenyan population. To this end, the Government will endeavor to channel substantial resources to youth related programmes to provide opportunities for the youth to be meaningfully engaged in economic development process. Resource allocation in this area will be guided by the National Youth Policy, which seeks to address, among other things: issues of unemployment; health related problems; crime; abuse; housing; as well as limited participation in economic and political spheres.
The role of women: The 2001 Human Development Report for Kenya indicated that in Kenya, women are more likely to be unemployed than men and even when they are employed they earn less than men on average for similar jobs. To address this development challenge, the government will put emphasis on funding those programmes likely to have impact on women. In particular, special attention will be paid on those measures aimed at increasing opportunity for employment or access to productive resources for women, including accessible health care, safe water and education.
C:
Deficit and Financing Strategy
5.7 The overall fiscal deficit (including grants) is projected to narrow from 3.2 percent of GDP in 2005/06 to 3.1 percent of GDP in 2006/07 equivalent to Ksh. 54 billion, owing mainly to an improvement in tax revenues, higher project grants, a tightening of recurrent expenditure and reduced drought related expenditures. After taking into account net foreign financing amounting to Ksh. 9 billion (0.5 percent of GDP), this would leave a financing requirement of Ksh. 29 billion (1.6 percent of GDP) to be financed through domestic borrowing. The fiscal framework for 2006/07 is fully financed and no financing gaps are projected. D:
External Financing Requirements
5.8 The total financing requirements for the three-year period, 2006/07-2008/2009, is estimated at US$5.4 billion (Appendix 6). US$3.9 billion comprises the cumulative current account deficits, which are expected to persist over the medium term as the economic recovery gets underway, imports are on average expected to grow more than double the pace of exports. Total debt service payment, including to the IMF, is estimated at US$915 million, while requirement for reserve build up is estimated at US$ 955 million. 5.9 The main sources of funding for external requirements are expected to be: (i) project support (US$3.1 billion); and (iv) private capital inflows (US$2.6 billion). 30
5.10 As highlighted in the BSP2005, the Government needs additional resources to a tune of US$450 per year in the medium term to meet the ERS’s objectives and to move more rapidly toward the MDGs. In the event that additional resources from development partners materialize, they will be channelled to the social sectors (health and education) and to the economic sectors such as agriculture and physical infrastructure and to reducing debt reduction. As alluded to earlier, the additional resources will lead to a shift in the composition of expenditure shares.
E:
Key Risks to Macro –Fiscal Framework
5.11 Currently, there exist a number of risks that are likely to affect the attainment of the agreed macro- fiscal framework targets of the budget strategy. Presented below are some of the risks that would deter the likely outcome for some of the macro and fiscal targets that have been set in this budget strategy. 5.12 Impact of Drought: If the country receives below average long rains, this could adversely affect overall economic growth and other economic indicators. The expected below normal long rains may strain the growth of the agricultural sector and manufacturing sectors. The impact on the manufacturing sector would spring from power disruptions and a negative impact on agro-based sub-sector. The supply constraints particularly from subdued agriculture and high costs of manufacturing would likely introduce significant inflationary pressure. Further the drought, depending on its gravity, would call for rapid and expanded government response requiring additional resources. 5.13 Delayed donor disbursements: The delays in donor disbursements for projects would exert pressure on the financing framework of the fiscal strategy. While donor funds have not been factored in the fiscal framework, donor resources particularly project grants are used to finance different government programmes. Key among these are: the Free Primary Education (FPE) that is receiving significant donor support; and the war on HIV/AIDS that receives support from the Global Fund. Delayed disbursements of donor funds are either likely to force the Government to borrow from the domestic market to finance some of these programmes, or result in reduced capital expenditure, which could have an impact on real GDP growth. 5.14 Delays in implementing the agreed reforms: Most of the reform measures being implemented by the Government would require that parliament enact or amend laws so as to fast track certain reforms. The rate at which Parliament conducts business has delayed the enactment or amendment of crucial laws to support government reform process. Besides, the government will finalize the concession plans for the Kenya Railways, modernization of port facilities, the privatization of Telkom Kenya, and the modernization of Kenya’s Airports, and the privatization of government-influenced enterprises. The reforms are an important element in attaining higher levels of growth.
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5.15 Fiscal pressure: The budget restructuring implied in the fiscal strategy, reorienting expenditures to development overheads, would be supportive to the growth process with the improvement of the government’s absorptive capacity for the development funds. It is expected that the enforcement of the Public Procurement and Disposals Act will ensure development resources are spent on time. Meanwhile, the increased call for additional teachers is likely to impact on the overall wage bill if not managed well. The successful restructuring of posting of teachers to deficient regions from surplus regions should be expedited to remove the pressure on government to immediately hire more teachers.
VI. DETAILS OF MINISTERIAL CEILINGS AND PRIORITIES, 2006/07 A:
Introduction
6.1 The ministerial priorities are derived from the sector reports, which have incorporated recommendations of the MPERs. In 2006/07 MTEF budget, both the sector ceiling and the indicative ministerial ceilings have been provided consistent with the need to provide continuity from last financial year and to view the allocation from a mediumterm perspective. Each section describes recent achievements, the key priorities and the sector targets during 2006/07 fiscal year. B:
Education Sector6
6.2 Developing human capital through education and training is a key pillar for sustainable development. The education sector has over the last three years, registered marked progress towards manpower development. The sectoral achievements between 2000 and 2004 include, an increase in: Net Enrolment rate (NER) from 67.8% to 82.1 %; primary school enrolment from 5.9 million to the current 7.6 million; transition rate from primary to secondary levels from 43.3% to 50.5% (and to 57.0% in 2005); secondary schools from 3,197 to 4,112; and an increase in primary teachers training colleges by 23% from 14,316 to 17,618. Other achievements include: increase in enrolment level in both public and private universities from 80,961 in 2002/03 to 91,541 in academic year 2004/05; development of guidelines to support community/non-formal schools in slums and other disadvantaged areas; provision of textbooks to all primary schools and enrolment in Technical Industrial Vocational and Entrepreneurship Training Institutions (TIVET) from 32,717 in 2003 to 44,215 in 2004. 6.3 In line with the ERS objectives and the need to achieve MDGs, the sector seeks to broadly attain Education For All (EFA) by 2015. To this end, the sectoral targets include: (i) increase primary school net enrolment and gross completion rate to 100 percent by 2015 and 2010 respectively; (ii) achieve gender parity at primary school, secondary and university levels by 2015; (iii) achieve universal adult literacy, including women, by 2015. 6
The education sector comprises the Ministry of Education and the Ministry of Science and Technology
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Table 6: Education Sector Performance Targets Indicator 1.National Primary Net Enrolment Rate 2.North Eastern Province Net Enrolment Rate 3.Primary Completion Rate
Baseline (%) 2003
2006 Target
2007 Target
Total Male Female
79.8 81.3 78.3
81.5 82.9 80.1
83.2 84.4 81.9
84.4 85.0 82.5
Total Male Female Total
17.6 23.3 12.1
24.5 29.7 19.4
31.5 36.5 26.6
38.5 43.9 33.1
59.4 60.6 58.1
59.7 60.3 59.1
60 60.4 59.6
60.3 60.5 60.1
47
55
60
70
18.7
19.1
…
…
Male Female 4.Transition Rate to Secondary School 5.Pupil/ Teacher Ratio, Secondary School
2005 Target
6.4 As part of its effort to achieve these goals, the sector in 2006/07, targets to: increase prrimary NER from the current 81.5% to 83.2%; primary completion rate to 60.0%; reduce incidence of primary repetition to 4.9%; increase primary Net Enrolment (NER) for North Eastern Province from 24.5% to 31.5%; and increase the transition rate to secondary school from 55% in 2005 to 60% in 2006. 6.5 Achieving these targets will require resources in such areas as operations and maintenance, payment of wages and salaries and core poverty programmes, including costs related to provision of free primary education, bursary and implementation of the Kenya Education Sector Support Programme (KESSP) aimed at strengthening the management and delivery of educational services, improving access, quality and relevance of education and training. In order to meet its objectives, the sector has been allocated a total of Ksh. 107.8 billion in 2006/07 (Ksh.11.4 billion and Ksh.96.4 billion for investment programme and sector operating costs, respectively). C:
Agriculture and Rural Development Sector
6.6 The agriculture and rural development sector7 has been a major contributor to Kenya’s economic development through creation of income earning and employment opportunities in rural areas and supply of raw materials for agro-based industries. To date, the sector has achieved the following: (i) re-engineering the Agricultural 7
The Ministries in this sector are: (i) Agriculture; Livestock Development and Fisheries; (ii) Cooperative Development and Marketing; (iii) Environment and Natural Resources; (iv) Regional Development Authorities; and (v) Ministry of Lands.
33
Information Resource Center (AIRC) to effectively provide information services to the sector; (ii) improving extension delivery services to ensure that the rate of adoption of new technologies is enhanced; (ii) restructuring and reviewing policies in the coffee, pyrethrum, sugar, cereals and cotton industries; (iv) initiating disease free zones at Coast, Rift Valley, and Mt. Region to improve access to international markets ; (v) rationalizing the cooperative audit services (over 65% of the cooperative societies); (vi) publishing of environmental impact assessment regulations; (vii) initiating long range integrated regional development master plan;(viii) reviewing the national livestock policy, dairy policy and formulating the fisheries policy; and (ix) enacting of the forests Act 2005 as well as the full operationalizing of the Environment Management and Coordination Act (EMCA) 1999. 6.7 In the medium term, the key priorities in the sector include improving: (i) delivery of research, extension and advisory support services; (ii) delivery of services particularly in the ASAL areas; (iii) enhancing quality assurance and export trade in livestock and livestock products; (iv) formulating of the national policies on mineral resources and mining, environment and sustainable development and forests, reviewing of the mining Act (1984), and operationalization of Forests Act and establishment of Kenya Forest Service; and (iv) management, conservation, control of fish quality, and development of fish marketing systems. Other priorities include; strengthening managerial, governance, marketing and research capacity of co-operative society for value addition processing; environmental management; improving agricultural input markets and supporting diversification of output markets; harmonization of land laws and regulations; and promotion and development of ASAL resources. 6.8 In achieving these objectives, the sector in 2006/07 targets to: - raise agricultural sector growth to an annual average rate of 3.1%, and thereafter to 5% by 2007; revitalise agriculture for food security, re-energise the cooperative movement, revamp the livestock industry, and develop the fisheries industry; reform land management system, protect, conserve and manage the environment, and revitalise regional development authorities, while ensuring any duplication of roles with line ministries is eliminated; and revitalize the mining and forest sub-sectors. 6.9 To finance its planned activities in 2006/07, the sector has been allocated Ksh.24.3 billion. Specifically, the following allocations will be made: Agriculture (Ksh.11.5 billion); Livestock and Fisheries (KShs.4.7 billion); Regional Development Authorities (KSh.1.4 billion); Co-operative Development and Marketing (Kshs.0.889 billion); Environment and Natural Resources (KShs.4.2 billion); and Lands (Ksh.1.7 billion). D:
Information and Communication Sector (ICT)
6.10 The ICT sector is crucial for Kenya’s economic development. It presents an unparalleled opportunity to transform government service delivery and improve efficiency in public sector. The sectoral achievements to date include, among others: (i) establishing and making operational ICT units within ministries; installing Local Area Networks (LANs) in various government buildings; implementation of a national 34
Statistical System (Statcap) project; launching the Kenya Integrated Household Budget Survey (KHBS) in 2005; establishing value added ICT services project (back office automation project) which targets to create more than 10,000 jobs annually; and implementing the Rural Telecommunications Project by the Ministry of Information and Communications. 6.11 In line with Government stated development policy, the sectoral priorities in the medium term include: developing and supporting ICT systems in the government; promoting and coordinating E-Governance; creating and developing ICT capacity for collection, storage, analysis and dissemination of information and national statistics; and developing ICT as an enterprise resource for the economy. To achieve these objectives, the sector, in 2006/07, targets to: design, develop and implement e-applications in all government institutions; deepen E-Government capacity development across the public service; develop ICT capacity in the areas of employment, coordination, information gathering, analysis, and dissemination; develop an IT pension system; strengthen capacity for monitoring and evaluation of poverty reduction initiatives; and upgrade of GIS, database soft ware and statistical tools for the department of Resource Survey and Remote Sensing. 6.12 To implement the proposed measures, the resources allocated to the sector in 2006/07 amount to KShs.2 billion and are distributed as follows: the Directorate of EGovernment (Ksh. 165 million); Information Technology Services (KSh.386 million; Statistical Services (Ksh.512 million); Resource Survey and Remote Sensing (Ksh.126 million) and Information and Communication (Ksh.826 million).
E:
General Economic Services
6.13 The General Economic Service Sector8 is critical in creating and facilitating sustainable infrastructure for social service delivery, human resource utilization, tourism, trade and industrial development for greater productivity and competitiveness. To date, the sector achievements include: making operational the Kenya Investment Authority; achieving tourism growth of over 15 % underpinned by significant growth in foreign exchange earnings and tourist arrival; reducing human-wildlife conflict through the translocation of elephants and fencing of 850.6 km of national parks; rehabilitating 45 MSE (Jua Kali) worksites across the country; and making operational the East Africa Community (EAC) Customs Union Protocol. 6.14 In the medium term, key priorities in the sector are:- undertaking aggressive promotion and marketing of Kenya as a preferred tourist destination; creating productive and sustainable employment opportunities as well as effective human resource development; diversifying and developing source markets, tourism products and circuits; prroviding an enabling environment for promotion of new industries; facilitating provision 8
The ministries in the sector are: Tourism and Wildlife, Trade and Industry; Labor and Human Resource Development; Gender, Sports, Culture & Social Services; and Youth Affairs
35
of affordable credit to SMEs; promoting of industrial relations; enforcing of occupational health and safety standards; developing of Micro and Small Enterprise; gender mainstreaming and sports development; and integrating the youth agenda in national development. The Ministry of Youth Affairs will play a critical role in building human capital through skills training at the youth polytechnics and the National Youth Service. 6.15 In 2006/07, the sector targets to:-increase the number of tourists’ arrivals to 1.6 million; reduce incidences of human-wildlife conflict by 10%; increase the disbursement through Joint Loans Board to Kshs. 92 million and increase the recovery rate; have counterfeit Act in place; improve on industrial relations by targeting to solve 1,800 cases; expand literacy programme by establishing literacy centers in 6,250 Sub locations; and enhance youth empowerment, participation, training and skills acquisition. . 6.16 To achieve these targets, the sector has been allocated a total of KShs.11 billion for recurrent and development expenditures for 2006/07, which will be allocated to the various ministries as follows: Ministry of Labor & Human Resources Development (Ksh.1.1 billion); Ministry of Trade & Industry (KSh.3.0 billion); Ministry of Gender, Sports, Culture & Social Services (Ksh.2.3 billion); Ministry of Tourism & Wildlife (Ksh.3.0 billion); and Ministry of Youth Affairs Development (Ksh.1.7 billion).
F:
Health Sector
6.17 The sector, which remains a central pillar of the ERS equity objective, focuses on developing and strengthening primary health care services (preventive and curative) in order to provide low cost and accessible healthcare to all Kenyans. These services will be linked to a network of public hospitals that are capable of providing referral services to deal with complex conditions. As part of efforts to realize its mandate, the sector has made remarkable progress, among them:- improvement in drugs and supplies distribution; increased the number of people accessing ARVs from 35,000 to over 60,000 over the last two years; decongested the Kenyatta National Hospital; contained malaria morbidity and mortality; increased immunization coverage to 65% in 2005 from 57% in 2003 in immunizable diseases; increased utilization of family planning services; and enhanced testing of medical inputs including drugs and equipment. 6.18 Broad objectives in the medium term are targeted to key priority areas to ensure access of basic health services. They include: investing on intervention that will in particular benefit the poor, the vulnerable and women; improving cross-sectoral cooperation for health promotion and public health; increasing the efficiency and effectiveness through close collaboration of GoK and its partners under the SWAP strategy; and increasing total Government spending on health in line with Abuja Declaration objectives.
36
6.19 In 2006/07, the sector targets to:-Institute measures to maintain the upward trend in the health sector; institutionalize the PETS to asses whether funds targeted at the poor are reaching them; improve transparency in drug procurement; redefining essential drug list-quality and range; reviewing the financing flow to the facilities with the aim of adopting a grant system approach; developing and circulating guidelines on construction of new health facilities under CDF for structured development; and developing a comprehensive human resource policy. These measures are expected to improve significantly efficiency in delivery of healthcare countrywide. 6.20 Specifically, the following performance targets are envisaged: increase the percentage of fully immunized children from 65% in 2005 to 67% in 2006; reduce the percent of pregnant women attending ANC aged between 15 – 24 who are HIV-infected from 9.2 percent in 2005 to 8.4 percent in 2006; increase the percent of women attending the ANC coverage from 60 percent to 65 percent in 2006; and reduce the percent of inpatient with malaria as a percent of total in-patient morbidity from 16 percent in 2005 to 15.1 percent in 2006. Table 7: Health Sector Performance Target 2006/07 Indicator 1.Proxy for Infant Mortality
2.Proxy for HIV/ AIDS prevalence
3.Proxy for maternal mortality
4.Proxy for burden of disease
Baseline (%) 2003 Fully Immunized Children (FIC) as a % of under-one population % of pregnant women attending ANC who are aged 15-24 who are HIV-infected % of pregnant women attending ANC coverage( at least 4 visits) In-patient malaria as a % of total inpatient morbidity
2005Target
2006Target
2007Target
57
65
67
70
10.1
9.2
8.4
8
54
60
65
70
19
16
15
14
6.21 To finance these interventions during 2006/07 the overall resource allocation for the sector has been increased by over 16 percent on top of the previous year’s increase of 22 percent. The total amount allocated to the sector during 2006/07 is Ksh. 35 billion
37
(KSh.21 billion for recurrent expenditure and Ksh.13.9 billion for development expenditure). G:
Physical Infrastructure Sector9
6.22 The development and maintenance of physical infrastructure on a sustainable basis is a key prerequisite for rapid and sustainable economic growth and poverty reduction. The cost of doing business is to a large extent influenced by the state of infrastructure. In the medium term, the sub-sectors will focus on measures aimed at improving delivery of various physical infrastructure services through the implementation of pro-poor development programmes. To date, the sector has: routinely maintained 40,000KM of road; constructed 433 km of roads under the Roads 2000 program in 2004/05; rehabilitated 260 dams and pans in the last two financial years; constructed dykes in Nzoia and Nyando Rivers; established water regulatory bodies; revived 3 irrigation schemes; completed Ol Karia II 70 MW Geothermal Power Plant; electrified 52 factories under Coffee Factories Rural Electrification Programme (COFREP); connected 91,069 customers; constructed two new 23 MVA substations at Matasia and Kiambu to improve quality; reduced transmission and distribution losses from 20.5 percent in 2002/03 to 18.2 percent currently; enhanced petroleum and coal exploration activities through signing of seven petroleum production sharing contacts and drilling of 19 coal exploration wells ; prepared a National Wind Atlas; installed 16 solar electricity generators in secondary schools in North Eastern Province; upgraded Kipevu Oil storage facility; installed booster pump at Morendat; and repaired and enhanced capacity of oil pipeline ; virtually completed the concessioning of the Kenya Railways Corporation; and installed Very Small Aperture Terminal (VSAT) at the Kenya Meteorological Headquarters. 6.23 In the medium term, the key priorities of the sector include:- completion of viable on-going and/or stalled projects; reconstruction, rehabilitation and maintenance of existing degraded infrastructure; providing new infrastructure to disadvantaged areas that have the potential for poverty reduction; concessioning some sections of the Northern corridor; construction, rehabilitation and augmentation of dilapidated rural and urban water supplies and sewerage schemes; developing irrigation and improving provision of water to ASAL areas; undertaking Geothermal Resource Assessment (GRA) to a level where tenders conversion of steam into electivity can be invited from KenGen and private sector investors; construction of LPG import handling, storage and bottling facilities in Mombasa and Nairobi; rehabilitating of oil pipeline and construction of booster pumps; fast tracking power generation, transmission and distribution to natural gas through connecting more customers to the national grid; installation of solar electricity generators in ASAL secondary schools; enhancing petroleum and coal exploration; strengthening Marine transport systems, Air transport; provision of decent and affordable housing for all Kenyans; and upgrading of slums. 9
The sector comprises of the Ministry of Roads and Public Works, Ministry of Local Government, Ministry of Transport, Ministry of Housing, Ministry of Energy and Ministry of Water and Irrigation.
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6.24 During the 2006/07 fiscal year, the sector targets to: - construct 150,000 housing units in urban areas and improve 300,000 units in rural areas; complete 2,700 housing units in Mathare 4A, 600 units at Kibera decanting site, construction of 400 units at Mavoko, complete 70 stalled buildings, and upgrade housing units in Kisumu and Mombasa; maintain 44,000 Km of roads and 40 airstrips; increase access to safe drinking water for urban and rural households; improve budgeting and compliance with financial regulations to 175 local authorities; concession of 106 Km of road; extend electricity to 120 trading centers, 75 schools, and 52 coffee factories; install solar power in 25 schools in ASAL areas ; and appraise the steam field at Olkaria IV geothermal. 6.25 To achieve these targets, the sector has been allocated a total of KSh.77 billion for recurrent and development expenditures in 2006/07. This amounts to a 14 percent increase in allocations over the previous year, bringing the total increase over the past two years to about 73 percent - or from KShs.44.6 billion in 2004/05 to KShs.77 billion in 2006/07. The ministerial allocations for 2006/07 are as follows: Ministry of Roads and Public Works (33.5 billion); Ministry of Energy (KSh.10.2 billion); Ministry of Water and Irrigation (KSh.11.6 billion); Ministry of Local Government (10.13 billion) ;Ministry of Transport (KSh.9.7 billion); and Ministry of Housing (KSh.1.9 billion). H:
Public Safety, Law and Order Sector10
6.26 The Public Safety, Law and Order sector provides a stable and predictable environment, which facilitates the flourishing of other sectors in the economy. It plays a critical role in the country’s development by: (a) promoting good governance, accountability and transparency in management of public affairs, (b) promoting equal access to justice for all as well as respect for human rights and the rule of law, and (c) systematically addressing the situational and social causes of crime and insecurity. Over the last three years, the sector has achieved among others: piloting of a community based policing framework which was launched in April 2005; creating special police desks to deal with violence against women and children; leasing out of 4,013 housing units to lessen the shortage of accommodation for the police; strengthening the Department of Public Prosecutions; operationalising the investigatory KACC and the advocacy based National Anti-Corruption Campaign; decongesting prisons; developing a strategic plan for the police; training of 6,000 Chiefs and Assistant Chiefs; and finalizing and operationalising strategic plans for Police, Prisons, Judiciary, Department of Public Prosecutions, the State Law Office, Provincial Administration, Office of the Vice President and Ministry of Home Affairs, Immigration Department and Ministry of Justice and Constitutional Affairs.
10
The sector comprises of seven Ministries/Departments:- Office of the President, the State House, Office of the Vice President and Ministry of Home Affairs, Ministry of Justice and Constitutional Affairs, State Law Office, Judiciary and the Kenya Anti-Corruption Commission.
39
6.27 In the medium term, the key priorities of the sector include: deepening reforms under the Governance Justice Law and Order Sector (GJLOS) reform program; promoting alternative dispute resolution and use of alternative sentencing methods such as community service to reduce case backlog and congestion in prisons; strengthening the Anti-corruption enforcement agencies; strengthening prosecutorial capacity; expanding court facilities to ensure efficiency in administration of justice; constructing houses for disciplined forces; maintaining adequate strategic grain reserves; modernizing and computerizing records management systems at the State Law Office; building a national safety and security framework to facilitate the enabling environment for private individuals and institutions; and monitoring and appraising performance of all government agencies including the state corporations. 6.28 For 2006/07 the sectoral targets include: developing a strong coordinated administration and governance system; deepening GJLOS in Kenya’s national policy framework; expanding the housing development program for disciplined forces; further strengthening governance and anti-corruption, as well as legal, human rights and justice institutions; rehabilitating police stations and prisons operating infrastructure (including police stations, remand and prison cells); training 8,000 police officers on attitude change and skills enhancement; intensifying registration services including issuance of identity cards; decentralizing the operations of the State Law Office, and expanding the legal and judicial education across and within the sector. 6.29 To achieve these targets, the sector resource allocations in 2006/07 amounts to Ksh. 54.0 billion (Ksh. 39.86 billion and Ksh. 14.1 billion for recurrent expenditure and development expenditure respectively). Ministerial resource allocations are as follows: Office of the President (Ksh.38.1 billion), Office of the Vice President & Ministry of Home Affairs (Ksh. 8.2 billion), State House (1.2 billion), Ministry of Justice & Constitutional Affairs (Ksh.2.2 billion), State Law Office (Ksh. 0.9 billion), Judiciary Department (Ksh. 2.1 billion), and Kenya Anti-Corruption Commission (Ksh. 1.3 billion). I:
Public Administration Sector
6.30 Public administration sector refers to all operations relating to the fulfillment of public policy. The major role of the sector is to provide sound policies and a solid framework for quality and efficient service delivery to the public service. So far the sector has initiated public sector reforms which have resulted in: ministerial rationalization and staff rightsizing; development of performance contracts; enactment of the Public procurement and the Privatization Acts; launching of EAC Customs Union; development of 41 schemes of services; rolling out of the Integrated Payroll and Personnel Database (IPPD) to all ministries; development of a national monitoring and evaluation system for tracking progress on the implementation of the IP-ERS; and undertaking financial reforms and tax administration to promote private sector growth and improve efficiency in tax administration.
40
6.31 The key priorities in the medium term are as follows: - deepen public sector reforms to ensure efficient and effective service delivery; provide strategic leadership and guidance in human resource management; spearhead rapid and sustainable economic development through visionary economic planning, prudent fiscal and monetary policies, and effective management and coordination of government operations; promote effective and efficient allocation and utilization of resources; articulate and implement Kenya’s foreign policy by promoting and protecting national interest and image abroad; promote a conducive environment for transparent, free and fair elections; and promote regional integration in the East Africa region and the horn of Africa, in order to speed up economic growth in Kenya. 6.32 In 2006/07, the sector targets to:-institutionalize the IPPD; implement voter education and preparation for the 2007 election; implement fully the Voluntarily Early Retirement scheme; implement the pay policy; coordinate community and poverty development programmes, including MDGs; develop national statistical systems and surveys; monitor and evaluate policies/programmes; review electoral boundaries and voter registration; computerize tax systems and automate goods inspection system at KRA; enhance financial management systems; privatize selected public enterprises; construct chanceries and purchase of properties in New York, China and Cairo, while ensuring the rationalization of foreign missions with a view to curtailing costs; and computerize the recruitment and selection of civil servants. 6.33 To implement these measures, the overall sectoral resource allocation is Ksh. 45.3 billion. Ministerial resource allocation is as follows: - Directorate of Personnel Management (Ksh.1.09 billion), Ministry of Foreign Affairs (Ksh. 6.6 billion), Ministry of Planning and National Development (2.9 billion), Ministry of Finance (Ksh. 22.97 billion), Ministry of East Africa (KShs.0.455 billion); Public Service Commission of Kenya (Ksh. 0.189 billion), Kenya National Audit Office (Ksh. 1.1 billion), the National Assembly (5.7 billion), and Electoral Commission of Kenya (Ksh. 4.3 billion).
41
Appendix1:Selected Economic Indicators--2004/05-2008/09 Appendix1:Selected Economic Indicators--2004/05-20 2004/05 2005/06 2006/07 Prov. Est. Proj.
2007/08 Proj.
2008/09 Proj.
Annual percentage change, unless otherwise indicated National account and prices Real GDP GDP per capita GDP deflator CPI Index (eop) CPI Index excl. food, energy (eop) Terms of trade (-deterioration)
4.7 2.7 8.2 11.9 5.6 -7.2
4.9 3.0 9.5 13.1 5.0 -4.6
5.5 3.5 7.0 4.1 3.5 -2.0
5.9 3.7 4.2 4.1 3.5 -1.7
6.0 4.0 4.0 3.5 3.5 -1.2
Money and credit (end of period) Net domestic assets Net domestic credit to the Government Credit to the rest of the economy M3 (M2 plus foreign currency deposits) Reserve money
7.0 -17.8 20.6 11.3 4.7
6.0 11.0 10.1 9.7 7.6
12.0 10.5 12.8 10.5 7.6
10.4 8.6 12.5 10.2 7.4
14.4 5.4 14.6 11.4 8.7
In percentage of GDP, unless otherwise indicated Investment and saving Investment Central Government Other Gross National Saving Central Government Other
18.4 3.3 15.1 13.9 2.3 11.5
20.8 5.5 15.3 15.5 0.7 14.8
21.9 6.6 15.3 16.5 1.0 15.5
23.4 7.0 16.4 18.2 2.3 15.8
24.1 7.1 17.1 19.1 2.9 16.2
Central government budget Total revenue Total expenditure and net lending of which: wages and salaries Interest payments Development expenditures Overall balance (commitment basis) excl. grants Overall balance (commitment basis) incl. grants Net external borrowing Net domestic borrowing Total donor support (grant & loans)
21.2 22.2 7.7 2.2 3.3 -1.0 0.1 0.0 -0.5 1.6
20.7 26.4 7.3 2.4 5.5 -5.7 -3.5 0.4 2.0 3.2
20.7 25.9 7.0 2.2 6.7 -5.2 -3.1 0.9 1.6 4.0
20.9 25.5 6.7 2.1 7.0 -4.6 -2.5 1.3 1.3 4.4
21.0 25.2 6.6 1.9 7.1 -4.3 -2.2 1.2 0.8 4.3
25.6 33.5 -4.5 -4.5
24.6 34.0 -5.3 -5.6
24.6 33.6 -5.4 -5.4
25.1 33.9 -5.2 -5.2
25.2 33.9 -5.0 -5.0
2.7
3.3
3.5
3.7
3.8
46.6 18.6 28.0
41.4 18.2 23.1
41.9 18.6 23.3
40.1 17.8 22.4
38.0 16.5 21.5
1,370
1,573
1,773
1,957
2,158
Balance of payments Exports value, goods and services Imports value, goods and services Current external balance, including official transfers Current external balance, excluding official transfers Gross international reserve coverage in months of next year imports (end of period) Public debt Central government debt (end of period) Domestic (net) External Memorandum items Nominal GDP (in Ksh millions) Source: Ministry of Finance
Appendix 2: Central Government Financial Operations 2003/04 - 2008/09 (in millions of Kenya Shillings) 2005/06 Rev. Prog. Rev. Budget
2006/07 BSP2005 BOPA2006
BSP2006
2007/08 BSP2005 BOPA2006
2008/09 BSP2006 BOPA2006 BSP2006
325,563 291,064 115,806 5,790 21,732 54,077 77,732 2,142 25,365
344,345 312,651 124,022 6,201 26,529 57,706 84,876 3,875 21,846
369,022 335,253 133,315 6,666 28,769 59,070 92,220 3,443 25,102
367,328 333,554 133,419 6,671 28,821 60,025 89,483 2,720 25,756
373,032 339,428 134,765 6,738 28,909 61,218 93,963 4,143 23,169
407,578 370,565 147,259 7,363 32,254 63,461 104,158 3,719 27,077
409,207 373,614 148,095 7,405 33,490 63,927 104,770 3,895 26,842
450,184 409,177 163,014 8,151 36,180 68,233 116,653 4,019 29,229
453,614 415,941 167,153 8,358 38,918 68,082 116,295 4,090 29,761
24,360 0
28,709 0
25,493 0
27,104 0
27,104 0
26,866 0
29,650 0
28,188 0
32,856 0
29,315 0
303,705 258,078 30,802 23,375 7,427 105,612 100 12,568 89,995 21,997 -2,996 45,627 22,607 22,143 860 17 0 0 0
420,387 318,365 35,902 26,890 9,012 116,889 7,073 22,236 107,891 28,374 0 100,022 42,379 56,841 802 0 0 0 2,000
415,104 314,360 38,280 28,478 9,802 114,515 1,309 21,421 110,461 28,374 0 86,944 41,315 44,551 1,078 0 13,800 0 0
432,828 328,509 37,906 31,231 6,675 124,126 2,002 21,896 115,238 27,342 0 102,319 36,589 64,658 1,072 0 0 0 2,000
459,011 336,922 37,753 31,559 6,194 124,227 2,177 22,932 116,956 32,877 0 118,089 45,871 71,057 1,162 0 2,000 0 2,000
458,641 335,970 39,496 32,905 6,591 123,805 2,177 20,659 116,956 32,877 0 118,671 45,871 71,056 1,744 0 2,000 0 2,000
466,798 345,923 38,890 33,212 5,678 131,509 0 25,225 122,063 28,235 0 118,875 42,843 74,960 1,072 0 0 0 2,000
505,001 365,841 39,853 33,053 6,800 133,651 2,000 26,372 130,029 33,936 0 137,160 50,039 86,049 1,072 0 0 0 2,000
499,495 360,089 40,765 33,978 6,787 131,181 2,000 23,641 128,566 33,936 0 137,405 50,039 86,049 1,317 0 0 0 2,000
545,702 391,580 40,553 33,873 6,680 141,224 2,000 30,328 142,444 35,031 0 152,122 57,623 93,427 1,072 0 0 0 2,000
543,784 388,631 40,412 33,941 6,471 141,676 2,000 27,068 142,444 35,031 0 153,153 58,722 93,427 1,004 0 0 0 2,000 -90,170
2003/04
2004/05
255,087 226,400 81,402 4,070 22,324 40,085 61,725 3,331 21,603
289,802 265,912 99,255 4,963 23,532 44,151 75,989 3,685 24,263
327,371 297,150 117,219 5,861 25,892 55,682 79,962 1,222 23,034
Ministerial and Departmental fees (AiA) Revenue enhancement measures
24,617 0
18,927 0
EXPENDITURE AND NET LENDING Recurrent expenditure Interest payments Domestic interest Foreign interest Wages and benefits(civil service) Civil service reform Pensions etc Other Defense and NSIS Pending bills change Development and Net lending Domestically financed Foreign financed Net lending Pending bills (change) Drought Expenditures MTEF Re-allocations Contingencies
276,549 240,793 30,811 24,392 6,419 95,850 273 12,220 81,108 20,203 328 35,756 21,203 17,057 1,368 -3,872 0 0 0
Balance (commitment basis excl. grants)
TOTAL REVENUE Ordinary Revenue (excl. LATF) Income tax of which LATF Import duty (net) Excise duty Value Added Tax Investment income Other
-21,462
-13,903
-93,016
-89,541
-88,483
-89,989
-91,313
-93,765
-97,423
-90,288
-95,518
Adjustment to cash basis
1,469
386
0
4,750
0
0
0
0
0
0
0
0
Project grants Programmme grants
11,411 4,383
14,905 0
27,865 4,781
30,382 4,750
35,399 0
37,053 0
37,053 0
41,000 0
40,155 0
40,155 0
45,309 0
45,309 0
Balance (cash basis including grants)
-4,199
1,388
-60,371
-49,660
-53,084
-52,937
-54,261
-52,765
-57,268
-50,133
-50,209
-44,861
Statistical discrepancy
-4,250
-5,910
0
0
0
0
0
0
0
0
0
0
FINANCING Net foreign financing Project loans Programme loans Financial defense leases loan adjustmen Repayments due Change in arears Rescheduling Privatization proceeds Bank restructuring costs Expenditure arrears securitization Expenditure arrears securitization costs Financing bank restrucutring cost Other Net domestic borrowing
-4,932 -8,860 5,646 5,993 0 24,794 138 4,157 0 -2,500 0 0 2,500 -4,881 8,809
-7,298 -625 7,238 0 0 22,613 5,024 9,726 0 0 0 0 0 0 -6,673
60,372 26,993 28,976 11,272 0 17,649 -4,591 8,984 8,000 -22,000 2,000 -2,000 22,000 0 25,378
49,660 5,720 14,169 1,572 0 27,489 13,821 3,647 7,300 0 2,000 -2,000 0 5,400 31,239
53,084 23,531 29,259 11,351 0 21,403 0 4,324 0 0 2,000 -2,000 0 0 29,553
52,937 23,916 34,004 8,120 0 22,532 0 4,324 0 0 3,000 -3,000 0 0 29,021
38,008 8,987 34,004 0 0 21,551 -3,466 0 0 -20,000 3,000 -3,000 20,000 0 29,021
52,765 27,744 33,960 11,281 0 17,497 0 0 0 0 1,000 -1,000 0 0 25,021
57,268 30,974 45,894 6,000 0 20,920 0 0 0 0 0 0 0 0 26,294
50,133 24,479 45,894 0 0 21,415 0 0 0 0 0 0 0 0 25,654
50,209 32,158 48,118 6,000 0 21,960 0 0 0 0 0 0 0 0 18,051
44,861 26,810 48,118 0 0 21,308 0 0 0 0 0 0 0 0 18,051
Financing gap
-4,881
0
0
0
0
0
-16,253
0
0
0
0
0
Gap Finacing Privitization Receipts Other Revenue/Expenditure Maesures
16,253 12,500 3,753
Memo items Core Poverty Programs Non-Wage--Recurrent Wage--Recurrent Development Expenditure
54,551 19,693 7,795 27,063
62,988 20,982 9,654 32,352
74,840 25,043 12,040 37,757
79,399 31,995 13,736 33,668
85,666 30,516 12,328 42,822
85,666 30,516 12,328 42,822
87,806 33,394 14,011 40,401
97,459 34,308 13,906 49,245
98,320 34,504 12,576 51,240
105,368 40,073 16,813 48,482
114,530 42,082 12,828 59,620
126,441 48,088 20,175 58,178
Domestic Debt Domestic Debt (Net)
258,506 254,647
317,793 253,493
367,172 0
356,432 286,840
340,438 0
382,453 0
408,453 330,286
365,519 0
408,747 0
434,107 347,635
426,798 0
452,158 356,841
1,207,748
1,369,901
1,573,184
1,573,184
1,567,373
1,682,575
1,772,722
1,708,329
1,831,499
1,956,904
1,932,231
2,158,102
Nominal GDP Source: Ministry of Finance Notes: BSP = Budget Strategy Paper BOPA = Budget Outlook Paper
Appendix 3: Central Government Financial Operations 2003/04 - 2008/09 (in percent of GDP) 2005/06 2006/07 2007/08 2008/09 2004/05 Rev. Prog. Rev. Budget BSP2005 BOPA2006 BSP2006 BSP2005 BOPA2006 BSP2006 BOPA2006 BSP2006 TOTAL REVENUE Ordinary Revenue (excl. LATF) Income tax of which LATF Import duty (net) Excise duty Value Added Tax Investment income Other
21.3 19.5 7.3 0.4 1.7 3.2 5.6 0.3 1.8
21.3 19.3 7.6 0.4 1.7 3.6 5.2 0.1 1.5
20.7 18.5 7.4 0.4 1.4 3.4 4.9 0.1 1.6
22.0 19.9 7.9 0.4 1.7 3.7 5.4 0.2 1.4
21.9 19.9 7.9 0.4 1.7 3.5 5.5 0.2 1.5
20.7 18.8 7.5 0.4 1.6 3.4 5.0 0.2 1.5
21.8 19.9 7.9 0.4 1.7 3.6 5.5 0.2 1.4
22.3 20.2 8.0 0.4 1.8 3.5 5.7 0.2 1.5
20.9 19.1 7.6 0.4 1.7 3.3 5.4 0.2 1.4
23.3 21.2 8.4 0.4 1.9 3.5 6.0 0.2 1.5
21.0 19.3 7.7 0.4 1.8 3.2 5.4 0.2 1.4
Ministerial and Departmental fees (AiA Revenue enhancement measures
1.4 0.0
1.6 0.0
1.8 0.0
1.6 0.0
1.6 0.0
1.5 0.0
1.6 0.0
1.6 0.0
1.4 0.0
1.7 0.0
1.4 0.0
EXPENDITURE AND NET LENDING Recurrent expenditure Interest payments Domestic interest Foreign interest Wages and benefits(civil service) Civil service reform Pensions etc Other Defense and NSIS Pending bills change Development and Net lending Domestically financed Foreign financed Net lending Pending bills (change) Drought Expenditures MTEF Re-allocations Contingencies
22.3 19.0 2.3 1.7 0.5 7.8 0.0 0.9 6.6 1.6 -0.2 3.4 1.7 1.6 0.1 0.0 0.0 0.0 0.0
27.4 20.7 2.3 1.8 0.6 7.6 0.5 1.4 7.0 1.8 0.0 6.5 2.8 3.7 0.1 0.0 0.0 0.0 0.1
26.4 20.0 2.4 1.8 0.6 7.3 0.1 1.4 7.0 1.8 0.0 5.5 2.6 2.8 0.1 0.0 0.9 0.0 0.0
27.6 21.0 2.4 2.0 0.4 7.9 0.1 1.4 7.4 1.7 0.0 6.5 2.3 4.1 0.1 0.0 0.0 0.0 0.1
27.3 20.0 2.2 1.9 0.4 7.4 0.1 1.4 7.0 2.0 0.0 7.0 2.7 4.2 0.1 0.0 0.1 0.0 0.1
25.9 19.0 2.2 1.9 0.4 7.0 0.1 1.2 6.6 1.9 0.0 6.7 2.6 4.0 0.1 0.0 0.1 0.0 0.1
27.3 20.2 2.3 1.9 0.3 7.7 0.0 1.5 7.1 1.7 0.0 7.0 2.5 4.4 0.1 0.0 0.0 0.0 0.1
27.6 20.0 2.2 1.8 0.4 7.3 0.1 1.4 7.1 1.9 0.0 7.5 2.7 4.7 0.1 0.0 0.0 0.0 0.1
25.5 18.4 2.1 1.7 0.3 6.7 0.1 1.2 6.6 1.7 0.0 7.0 2.6 4.4 0.1 0.0 0.0 0.0 0.1
28.2 20.3 2.1 1.8 0.3 7.3 0.1 1.6 7.4 1.8 0.0 7.9 3.0 4.8 0.1 0.0 0.0 0.0 0.1
25.2 18.0 1.9 1.6 0.3 6.6 0.1 1.3 6.6 1.6 0.0 7.1 2.7 4.3 0.0 0.0 0.0 0.0 0.1
Balance (commitment basis excl. grants)
-1.0
-6.1
-5.7
-5.6
-5.3
-5.2
-5.5
-5.3
-4.6
-4.9
-4.2
Adjustment to cash basis
0.0
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Project grants Programmme grants
1.1 0.0
1.8 0.3
1.9 0.3
2.3 0.0
2.2 0.0
2.1 0.0
2.4 0.0
2.2 0.0
2.1 0.0
2.3 0.0
2.1 0.0
Balance (cash basis including grants)
0.1
-3.9
-3.2
-3.4
-3.1
-3.1
-3.1
-3.1
-2.6
-2.6
-2.1
Statistical discrepancy
-0.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
FINANCING Net foreign financing Project loans Programme loans Financial defense leases loan adjustmen Repayments due Change in arears Rescheduling Privatization proceeds Bank restructuring costs Expenditure arrears securitization Expenditure arrears securitization costs Financing bank restrucutring cost Other Net domestic borrowing
-0.5 0.0 0.5 0.0 0.0 1.7 0.4 0.7 0.0 0.0 0.0 0.0 0.0 0.0 -0.5
3.9 1.8 1.9 0.7 0.0 1.1 -0.3 0.6 0.5 -1.4 0.1 -0.1 1.4 0.0 1.7
3.2 0.4 0.9 0.1 0.0 1.7 0.9 0.2 0.5 0.0 0.1 -0.1 0.0 0.3 2.0
3.4 1.5 1.9 0.7 0.0 1.4 0.0 0.3 0.0 0.0 0.1 -0.1 0.0 0.0 1.9
3.1 1.4 2.0 0.5 0.0 1.3 0.0 0.3 0.0 0.0 0.2 -0.2 0.0 0.0 1.7
2.1 0.5 1.9 0.0 0.0 1.2 -0.2 0.0 0.0 -1.1 0.2 -0.2 1.1 0.0 1.6
3.1 1.6 2.0 0.7 0.0 1.0 0.0 0.0 0.0 0.0 0.1 -0.1 0.0 0.0 1.5
3.1 1.7 2.5 0.3 0.0 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4
2.6 1.3 2.3 0.0 0.0 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3
2.6 1.7 2.5 0.3 0.0 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9
2.1 1.2 2.2 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8
Financing gap
0.0
0.0
0.0
0.0
0.0
-0.9
0.0
0.0
0.0
0.0
0.0
5.4 1.9 0.7 2.8
5.4 2.0 0.9 2.5
5.9 2.2 0.7 3.1
5.9 2.2 0.9 2.7
22.2 17.8 100.0
22.1 100.0
21.0 16.5 100.0
Gap Finacing Privitization Receipts Other Rev./Exp. Maesures
0.9 0.7 0.2
Memo items Core Poverty Programs Non-Wage--Recurrent Wage--Recurrent Development Expenditure
4.6 1.5 0.7 2.4
4.9 1.6 0.8 2.5
5.0 2.0 0.9 2.1
5.5 1.9 0.8 2.7
Domestic Debt Domestic Debt (Net) Nominal GDP
23.3 18.6 100.0
23.9 100.0
22.7 18.2 100.0
Source: Ministry of Finance Notes: BSP = Budget Strategy Paper BOPA = Budget Outlook Paper
5.1 1.8 0.7 2.5
5.0 1.9 0.8 2.3
5.7 2.0 0.8 2.9
21.7
22.7
22.3
100.0
23.0 18.6 100.0
21.4
100.0
100.0
100.0
Appendix 4: Monetary Survey, June 2004 - June 2009 (in billions of Kenya shillings, unless otherwise indicated) 2005/06 Dec-05
Medium-term Jun-06
Jun-04
Jun-05
Mar-06
Act.
Act.
Rev. Prog.
Act.
Rev. Prog.
Proj.
Rev. Prog.
Proj.
86.7
95.7
114.8
114.8
112.4
121.5
110.8
128.2
142.7
163.0
173.6
1.1
1.2
1.5
1.5
1.4
1.5
1.4
1.6
1.8
2.1
2.2
Jun-07
Jun-08
Jun-09
Projection
Central Bank of Kenya (CBK) Net foreign assets 1/ (in billions of U.S. dollars) Net domestic assets
3.6
-1.2
-8.3
-8.6
-11.0
-20.1
-9.2
-26.6
-33.5
-45.6
-46.1
11.2
1.7
-1.5
0.5
-5.4
-11.0
-2.8
-15.8
-18.0
-29.3
-28.2
Government (net)
15.5
5.1
6.3
3.7
6.4
3.8
6.4
3.8
4.4
4.9
5.3
Advances to commercial banks
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Repos (liability to commercial banks (-))
-6.1
-5.3
-9.9
-5.3
-13.9
-16.8
-11.3
-21.7
-24.6
-36.6
-35.8
Net domestic credit
Private sector credit
1.9
2.0
2.1
2.1
2.0
2.1
2.1
2.1
2.2
2.3
2.4
Other items (net; asset (+))
-7.7
-2.9
-6.8
-9.1
-5.6
-9.1
-6.4
-10.9
-15.5
-16.3
-18.0 127.5
Reserve money
90.2
94.4
106.4
106.2
101.4
101.4
101.6
101.6
109.3
117.4
Currency outside banks
55.7
59.3
68.1
66.3
62.7
62.0
63.0
62.1
65.0
68.2
71.0
Bank reserves
34.6
35.1
38.3
40.0
38.7
39.3
38.6
39.5
44.2
49.2
56.5
Till cash (currency in banks)
7.0
8.0
8.9
10.5
8.6
9.2
8.2
9.1
10.4
10.1
13.0
Deposits
27.6
27.1
29.4
29.4
30.1
30.2
30.4
30.3
33.8
39.1
43.5
Required Reserves
24.3
26.0
28.4
27.7
29.1
29.1
29.4
29.4
32.6
36.5
41.2
Excess Reserves
3.3
1.1
1.0
1.7
1.0
1.0
1.0
1.0
1.0
1.0
0.8
33.1 0.4
52.8 0.7
52.9 0.7
49.4 0.6
52.5 0.7
48.9 0.6
52.1 0.7
48.4 0.6
46.5 0.6
44.7 0.6
42.9 0.5
Bank reserves
34.6
35.1
38.3
40.0
38.7
39.3
38.6
39.5
44.2
49.2
56.5
Advances from CBK
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Repos (claim on CBK (+))
6.1
5.3
9.9
5.3
13.9
16.8
11.3
21.7
24.6
36.6
35.8
Banks Net foreign assets 1/ (in billions of U.S. dollars)
Domestic credit Government (net)
412.6
459.2
491.8
492.9
497.9
497.1
509.5
508.6
570.7
636.9
716.5
121.1
107.2
113.3
118.4
113.9
119.8
114.3
120.9
133.3
144.6
152.4
Other public sector
9.2
10.3
11.3
12.0
11.5
11.7
10.7
10.8
11.4
11.8
12.2
Private sector
282.3
341.7
367.2
362.5
372.4
365.6
384.6
377.0
426.0
480.5
552.0
-68.7
-85.0
-92.9
-88.3
-91.6
-90.0
-95.3
-102.6
-112.8
-132.0
-139.2
Other items (net; asset (+)) Total Deposits
417.8
441.2
500.1
499.2
511.1
512.2
516.2
515.6
573.3
635.2
712.6
Deposits in shillings
351.6
383.1
408.6
408.2
421.7
422.1
428.9
426.4
485.9
546.1
623.4
Deposits in foreign currency
66.1
84.4
91.5
91.0
89.4
90.1
87.3
89.2
87.4
89.2
89.2
0.8
1.1
1.2
1.2
1.1
1.1
1.1
1.1
1.1
1.1
1.1
Net foreign assets 1/
119.8
148.4
167.7
164.2
165.0
170.4
162.9
176.6
189.3
207.6
216.5
Net domestic assets
353.6
378.3
400.5
401.3
409.1
403.8
416.3
401.1
449.1
495.8
567.1
Domestic credit
430.0
466.3
500.2
498.7
506.3
503.0
518.0
514.6
577.4
644.1
724.2
Government (net)
136.6
112.3
119.6
122.2
120.3
123.6
120.7
124.7
137.8
149.6
157.7
Rest of the economy
566.5
(in billions of U.S. dollars) Monetary Survey
293.4
354.0
380.6
376.5
386.0
379.4
397.3
389.9
439.6
494.5
Other public sector
9.2
10.3
11.3
12.0
11.5
11.7
10.7
10.8
11.4
11.8
12.2
Private
284.2
343.7
369.3
364.5
374.5
367.7
386.7
379.1
428.3
482.7
554.3
Other items (net; asset (+))
-76.3
-88.0
-99.7
-97.3
-97.2
-99.2
-101.7
-113.5
-128.3
-148.3
-157.1
473.4
526.8
568.2
565.5
574.1
574.2
579.2
577.7
638.3
703.4
783.6
Deposits in foreign currency
66.1
84.4
91.5
91.0
89.4
90.1
87.3
89.2
87.4
89.2
89.2
M2 3/
407.3
442.4
476.6
474.5
484.7
484.1
492.0
488.5
550.9
614.3
694.4
M3 2/
Currency outside banks
55.7
59.3
68.1
66.3
62.7
62.0
63.0
62.1
65.0
68.2
71.0
Deposits in shillings
351.6
383.1
408.5
408.2
422.0
422.1
429.0
426.4
485.9
546.1
623.4
M3 growth (12-month percent change)
12.9
11.3
10.7
10.2
9.9
9.9
10.0
9.7
10.5
10.2
11.4
Currency outside banks
12.0
6.6
8.6
5.7
8.1
7.0
6.3
4.7
4.7
4.8
4.2
Nonbank holdings of government debt, billions of Ksh
119.4
137.0
147.0
146.8
151.0
148.6
154.0
149.9
165.9
180.4
190.3
Credit to the private sector Reserve Money (12-month percent change)
13.1 5.5
20.6 4.7
11.5 5.3
10.3 5.1
10.3 8.3
8.4 8.3
12.2 7.6
10.1 7.6
12.8 7.6
12.5 7.4
14.6 8.7
Memorandum items:
Source: Central Bank of Kenya 1/ At program exchange rate of KSh/US$ 78.95 prevailing on September 30, 2001 2/ Formerly M3X 3/ Formerly M3
6/8/200612:37 PM
Appendix 5: Balance of Payments, 2003/04-2008/09 in millions of US dollars, unless otherwise indicated 2003/04
2004/05 Prov.
2005/06 Rev. Prog.
Proj.
2006/07 Proj.
2007/08 Proj.
2008/09 Proj. -3,730
Trade balance
-1,361
-2,123
-2,637
-2,769
-3,066
-3,383
Exports, f.o.b.
2,562
3,004
3,455
3,479
3,828
4,207
4,667
Imports, fob
-3,923
-5,127
-6,092
-6,247
-6,893
-7,590
-8,397
Services (net)
583
708
804
821
996
1,175
1,368
Credits Debits
1,316 -733
1,521 -813
1,935 -1,131
1,649 -829
1,825 -830
2,023 -848
2,253 -885
Net investment income Investment income credits Investment income debits of which: official interest payments
-101 52 -154 -78
-92 59 -152 -102
-105 65 -170 -93
-85 76 -161 -110
-83 85 -167 -97
-55 98 -153 -85
-32 114 -146 -83
Unrequited transfers (net) Private (net) Official (net)
708 656 52
709 708 1
799 736 63
939 874 65
919 918 2
965 964 2
1,013 1,012 2
Current Account Excluing official transfers
-171 -221
-798 -798
-1,139 -1,203
-1,094 -1,157
-1,233 -1,233
-1,298 -1,298
-1,380 -1,380
Capital Account
166
234
366
369
468
519
559
Financial Account, net
77
495
808
897
1,124
1,114
1,132
Direct investment
61
31
…
35
57
74
96
Portfolio investment (equity)
-52
-26
…
17
23
30
38
Other Long-Term Capital Government Inflows Program loans Other Amortization
-191 -200 73 0 73 -273
28 -222 95 0 95 -317
522 372 608 146 381 -236
255 -117 208 20 188 -325
374 142 441 0 441 -299
542 309 583 0 583 -274
572 340 611 0 611 -271
Private (net) Inflows Amortization
9 84 -75
250 318 -68
150 … …
373 441 -68
232 308 -75
232 308 -75
232 308 -75
Other deposiory corporations
-9
-140
56
-79
0
0
0
Short-term capital (net) and NEO
268
601
229
667
670
469
424
Overall Balance
69
-72
34
137
387
332
307
Financing Change in gross reserves (- = increase) Use of Fund credit, net Change in arrears Resheduling Financing gap
-69 -144 20 2 54 0
72 -182 63 65 126 0
-34 -303 106 46 118 0
-137 -359 -10 183 48 0
-387 -332 -10 -45 0 0
-332 -324 -9 0 0 0
-307 -299 -9 0 0 0
1,405 2.8 77.6 3,878 4,656
1,587 2.7 77.4 4,525 5,940
1,890 2.9 … 5,390 -7,223
1,946 3.3 … 5,128 7,076
2,278 3.5 … 5,653 -7,723
2,602 3.7 … 6,230 -8,438
2,900 3.8 … 6,920 -9,282
-1.1 -1.4 3.5 18.7 3.6 12.3 76.6
-4.4 -4.4 13.7 28.8 11.3 17.0 74.9
-6.0 -6.3 … … … … …
-5.4 -5.6 13.3 22.4 13.3 16.3 …
-5.2 -5.4 8.2 10.4 10.0 10.1 …
-5.2 -5.2 8.4 10.1 10.0 9.9 …
-5.1 -5.1 8.6 10.6 10.2 10.9 …
Memorandum items: Gross official reserves (end period) (in months of imports of G&S) Exchange rate, period average (Ksh/$US) Export of goods and services Imports of goods and services In percent of GDP Current account incl. official transfers Current account excl. official transfers Import volume growth, goods (percent) Import value growth, goods (percent) Export volume growth, goods (percent) Export value growth, goods (percent) Exchange rate, end of period(Ksh/$US)
Source: Central Bank of Kenya and Ministry of Finance
Appendix 6: External Financing Requirements and Resources, 2004/05 - 2008/09 (In millions of U. S. dollars)
External financing requirements
2004/05
2005/06
2006/07
2007/08
2008/09
2006/07-2008/09
-1,313
-1,886
-1,891
-1,907
-1,962
-5,447
Current account (excl.official transfers)
-801
-1,192
-1,205
-1,301
-1,383
-3,890
Scheduled amortization (official)
-317
-325
-299
-274
-271
-843
IMF payment
-13
-10
-10
-9
-9
-27
Reduction in arrears
0
0
-45
0
0
-45
Build-up of gross official reserves
-182
-359
-332
-324
-299
-955
1,313
1,886
1,891
1,907
1,962
5,760
Program support
405
640
909
1,102
1,170
3,181
IMF
76
0
0
0
0
0
Resources
Program loans
0
20
0
0
0
0
AfDB
0
20
0
0
0
0
IDA
0
0
0
0
0
0
ERSSC
0
0
0
0
0
0
FINSRC
0
0
0
0
0
0
Other
0
0
0
0
0
0
0
0
0
0
0
0
Program grants
0
63
0
0
0
0
UK
0
0
0
0
0
0
EU
0
63
0
0
0
0
Other (Bilateral)
0
0
0
0
0
0
Project Support
Other
329
557
909
1,102
1,170
3,181
Project loans
95
188
441
583
611
1,635
Project grants
234
369
468
519
559
1,546
Private financing, net
718
1,015
982
805
791
2,578
Accumulation of arrears
65
183
0
0
0
0
Rescheduling of debt
126
48
0
0
0
0
0
0
0
0
0
0
Financing Gap
Appendix 7: Ministerial Ceilings (Recurrent Expenditure) Sector/Vote 2005/06 DEVELOPMENT 09 Regional Development Authorities
10 Agriculture
19 Livestock and Fisheries
21 Environment and Natural Resources
22 Co-operative Development and Marketing
36 Lands
SUB-TOTAL
PUBLIC SAFETY LAW AND ORDER 01 Office of the president
NACC-Office of the President 02 State House
05 Home Affairs
17 Justice and Constitutional Affairs
24 State Law Office
26 Judiciary Department
34 Kenya Anti-Corruption Commission
SUB-TOTAL
HEALTH 11 Health
SUB-TOTAL
EDUCATION 31 Education Science and Technology
Science and Technology
SUB-TOTAL
PHYSICAL INFRASTRUCTURE 12 Local Government
13 Public Works
14 Transport
20 Water
30 Energy
Housing
SUB-TOTAL
In Millions of KShs 2006/07 2007/08
2008/09
In Percentage of Total Recurrent Expenditure 2005/06 2006/07 2007/08 2008/09
Gross AIA Net Gross AIA NET Gross AIA NET Gross AIA NET
535 0 535 5,115 648 4,467 2,476 99 2,377 2,525 28 2,497
589 0 589 6,845 778 6,066 2,882 115 2,767 2,741 30 2,712
648 0 648 7,182 895 6,287 3,098 121 2,977 2,908 34 2,874
713 0 713 7,856 940 6,916 3,277 121 3,156 3,080 34 3,047
0.21 0.00 0.24 2.03 2.39 1.99 0.98 0.37 1.06 1.00 0.10 1.11
0.22 0.00 0.24 2.51 2.56 2.50 1.06 0.38 1.14 1.01 0.10 1.12
0.22 0.00 0.25 2.44 2.68 2.41 1.05 0.36 1.14 0.99 0.10 1.10
0.23 0.00 0.26 2.55 2.54 2.55 1.06 0.33 1.16 1.00 0.09 1.12
Gross AIA NET Gross AIA NET Gross AIA NET
713 12 701 1,236 127 1,109 12,601 914 11,686
770 13 757 1,353 133 1,220 15,180 1,069 14,112
816 13 803 1,433 140 1,293 16,085 1,202 14,883
864 13 851 1,518 147 1,371 17,307 1,254 16,053
0.28 0.04 0.31 0.49 0.47 0.49 5.01 3.37 5.21
0.28 0.04 0.31 0.50 0.44 0.50 5.57 3.51 5.82
0.28 0.04 0.31 0.49 0.42 0.50 5.47 3.60 5.70
0.28 0.04 0.31 0.49 0.40 0.51 5.62 3.39 5.92
Gross AIA NET Gross Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET
27,568 2,227 25,341 250 863 1 862 6,097 42 6,055 557 5 552 667 107 560 1,656 421 1,235 1,201 1 1,200 38,609 2,804 35,806
28,440 2,338 26,102 279 906 1 905 6,258 44 6,237 571 5 566 683 118 565 1,739 442 1,297 1,264 0 1,264 39,860 2,948 36,912
29,274 2,455 26,819 292 924 1 923 6,350 46 6,362 587 10 577 723 129 593 1,787 464 1,323 1,323 1 1,322 40,969 3,107 37,862
29,397 2,578 26,819 328 943 1 942 6,438 47 6,489 599 10 589 747 142 605 1,837 487 1,349 1,363 1 1,362 41,324 3,267 38,057
10.97 8.22 11.30 0.10 0.34 0.00 0.38 2.43 0.16 2.70 0.22 0.02 0.25 0.27 0.39 0.25 0.66 1.55 0.55 0.48 0.00 0.54 15.36 10.35 15.96
10.43 7.69 10.77 0.10 2.98 0.00 0.37 2.29 0.15 2.57 0.21 0.02 0.23 0.25 0.39 0.23 0.64 1.45 0.54 0.46 0.00 0.52 14.62 9.70 15.23
9.95 7.36 10.28 0.10 2.77 0.00 0.35 2.16 0.14 2.44 0.20 0.03 0.22 0.25 0.39 0.23 0.61 1.39 0.51 0.45 0.00 0.51 13.92 9.31 14.51
9.54 6.96 9.89 0.11 2.54 0.00 0.35 2.09 0.13 2.39 0.19 0.03 0.22 0.24 0.38 0.22 0.60 1.32 0.50 0.44 0.00 0.50 13.41 8.82 14.04
Gross AIA NET Gross AIA NET
20,210 70 20,140 20,210 70 20,140
21,127 73 21,054 21,127 73 21,054
22,920 77 22,844 22,920 77 22,844
25,209 81 25,128 25,209 81 25,128
8.04 0.26 8.98 8.04 0.26 8.98
7.75 0.24 8.69 7.75 0.24 8.69
7.79 0.23 8.75 7.79 0.23 8.75
8.18 0.22 9.27 8.18 0.22 9.27
Gross AIA NET Gross AIA NET Gross AIA NET
86,378 69 86,308 1,984 1 1,983 88,362 70 88,292
94,251 73 94,179 2,183 1 2,182 96,434 74 96,360
103,864 76 103,788 2,292 1 2,291 106,155 77 106,078
112,171 80 112,091 2,475 1 2,474 114,646 81 114,565
34.36 0.26 38.48 0.79 0.00 0.88 35.15 0.26 39.37
34.56 0.24 38.87 0.80 0.00 0.90 35.36 0.24 39.77
35.29 0.23 39.77 0.78 0.00 0.88 36.07 0.23 40.65
36.40 0.22 41.34 0.80 0.00 0.91 37.20 0.22 42.25
Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET
6,134 5,587 547 10,937 9,202 1,735 3,266 1,711 1,555 2,307 260 2,047 326 201 124 1,211 602 609 24,182 17,564 6,617
6,754 5,980 774 13,129 11,220 1,909 3,430 1,797 1,633 2,725 273 2,452 360 211 149 1,302 633 670 27,700 20,114 7,587
7,713 6,877 836 14,442 12,342 2,100 3,862 2,066 1,796 3,047 300 2,746 396 232 164 1,374 664 710 30,834 22,482 8,352
8,812 7,909 903 16,461 14,193 2,268 4,213 2,273 1,940 3,324 303 3,021 425 244 181 1,450 697 752 34,683 25,619 9,064
2.44 20.62 0.24 4.35 33.97 0.77 1.30 6.32 0.69 0.92 0.96 0.91 0.13 0.74 0.06 0.48 2.22 0.27 9.62 64.83 2.95
2.48 19.67 0.32 4.81 36.90 0.79 1.26 5.91 0.67 1.00 0.90 1.01 0.13 0.69 0.06 0.48 2.08 0.28 10.16 66.16 3.13
2.62 20.61 0.32 4.91 36.98 0.80 1.31 6.19 0.69 1.04 0.90 1.05 0.13 0.70 0.06 0.47 1.99 0.27 10.48 67.37 3.20
2.86 21.35 0.33 5.34 38.31 0.84 1.37 6.14 0.72 1.08 0.82 1.11 0.14 0.66 0.07 0.47 1.88 0.28 11.25 69.15 3.34
Appendix 7: Ministerial Ceilings (Recurrent Expenditure) cont. Sector/Vote 2005/06 GENERAL ECONOMIC SERVICES 15 Labour
16 Trade and Industry
18 Gender Sports and Culture
46 Tourism and Wildlife
Youth Affairs
SUB-TOTAL
PUBLIC ADMINISTRATION 03 Directorare of Personnel Management
04 Foreign Affais
06 Planning and National Development
07 Finance
24 East Africa Cooperation
27 Public Service Commission
28 Kenya National Audit
29 National Assembly
33 Electoral Commission
SUB-TOTAL
NATIONAL SECURITY 08 Department of Defence
45 National Intelligency Security Services
SUB-TOTAL
TECHNOLOGY 01 Directorate of e-Government
06 Statistical Services
07 Information Technology Services
21 Resource Survey snd Remote Sensing
32 Information and Communication
SUB-TOTAL
GRAND TOTAL
In Millions of KShs 2006/07 2007/08
2008/09
In Percentage of Total Recurrent Expenditure 2005/06 2006/07 2007/08 2008/09
Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET
798 74 724 1,678 265 1,414 1,737 9 1,728 1,628 119 1,509 1,233 35 1,199 7,075 502 6,573
888 78 810 2,098 450 1,648 1,824 10 1,814 1,710 125 1,584 1,295 36 1,258 7,815 699 7,116
933 82 851 2,203 472 1,731 1,915 10 1,905 1,795 132 1,664 1,360 38 1,321 8,206 734 7,472
979 86 893 2,313 496 1,817 2,011 11 2,000 1,885 138 1,747 1,428 40 1,387 8,616 771 7,845
0.32 0.27 0.32 0.67 0.98 0.63 0.69 0.03 0.77 0.65 0.44 0.67 0.49 0.13 4.42 2.81 1.85 2.93
0.33 0.26 0.33 0.77 1.48 0.68 0.67 0.03 0.75 0.63 0.41 0.65 0.49 0.13 4.42 2.87 2.30 2.94
0.32 0.25 0.33 0.75 1.42 0.66 0.65 0.03 0.73 0.61 0.39 0.64 0.47 0.12 4.14 2.79 2.20 2.86
0.32 0.23 0.33 0.75 1.34 0.67 0.65 0.03 0.74 0.61 0.37 0.64 0.47 0.12 4.14 2.80 2.08 2.89
Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET
778 38 741 6,257 945 5,312 636 636 10,079 578 9,501 442 442 184 2 182 1,106 41 1,065 5,556 2 5,554 1,789 3 1,786 26,827 1,609 25,219
803 40 763 6,464 993 5,471 655 655 10,393 607 9,786 455 455 189 2 187 1,140 43 1,097 5,723 2 5,721 4,343 3 4,340 30,164 1,689 28,475
827 42 786 6,677 1,042 5,635 675 675 10,717 637 10,080 469 469 195 2 193 1,175 45 1,130 5,895 2 5,892 6,974 3 6,970 33,603 1,774 31,830
853 44 809 6,899 1,094 5,804 695 695 11,051 669 10,382 483 483 201 2 199 1,211 47 1,164 6,071 2 6,069 2,174 3 2,170 29,637 1,862 27,775
0.31 0.14 0.33 2.49 3.49 2.37 0.25 0.28 4.01 2.13 4.24 0.18 0.20 0.07 0.01 0.08 0.44 0.15 0.47 2.21 0.01 2.48 0.71 0.01 0.80 10.67 5.94 11.24
0.29 0.13 0.31 2.37 3.27 2.26 0.24 0.27 3.81 2.00 4.04 0.17 0.19 0.07 0.01 0.08 0.42 0.14 0.45 2.10 0.01 2.36 1.59 0.01 1.79 11.06 5.56 11.75
0.28 0.12 0.30 2.27 3.12 2.16 0.23 0.26 3.64 1.91 3.86 0.16 0.18 0.07 0.01 0.07 0.40 0.13 0.43 2.00 0.01 2.26 2.37 0.01 2.67 11.42 5.31 12.20
0.28 0.12 0.30 2.24 2.95 2.14 0.23 0.26 3.59 1.81 3.83 0.16 0.18 0.07 0.01 0.07 0.39 0.13 0.43 1.97 0.01 2.24 0.71 0.01 0.80 9.62 5.03 10.24
Gross AIA NET Gross AIA NET Gross AIA NET
26,652 3,478 23,174 5,200 5,200 31,852 3,478 28,374
27,521 3,652 23,869 5,356 5,356 32,877 3,652 29,225
28,419 3,834 24,585 5,517 5,517 33,936 3,834 30,102
29,349 4,026 25,323 5,682 5,682 35,031 4,026 31,005
10.60 12.84 10.33 2.07 2.32 12.67 12.84 12.65
10.09 12.01 9.85 1.96 2.21 12.06 12.01 12.06
9.66 11.49 9.42 1.87 2.11 11.53 11.49 11.54
9.52 10.87 9.34 1.84 2.10 11.37 10.87 11.44
Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET Gross AIA NET
64 64 199 1 198 551 27 524 92 2 91 758 54 704 1,664 83 1,581 251,380 27,093 224,288
65 65 212 1 212 386 30 356 96 2 95 796 54 742 1,556 86 1,471 272,714 30,403 242,311
69 69 226 1 225 359 30 329 101 2 99 849 54 796 1,604 86 1,518 294,313 33,373 260,940
100 100 250 1 250 370 30 340 110 2 109 892 54 838 1,722 86 1,636 308,175 37,046 271,129
0.03 0.03 0.08 0.00 0.09 0.22 0.10 0.23 0.04 0.01 0.04 0.30 0.20 0.31 0.66 0.30 0.70 100.00 100.00 100.00
0.02 0.03 0.08 0.00 0.09 0.14 0.10 0.15 0.04 0.00 0.04 0.29 0.18 0.31 0.57 0.28 0.61 100.00 100.00 100.00
0.02 0.03 0.08 0.00 0.09 0.12 0.09 0.13 0.03 0.00 0.04 0.29 0.16 0.30 0.54 0.26 0.58 100.00 100.00 100.00
0.03 0.04 0.08 0.00 0.09 0.12 0.08 0.13 0.04 0.00 0.04 0.29 0.14 0.31 0.56 0.23 0.60 100.00 100.00 100.00
Appendix 7b:Ministerial Ceilings (Development) Sector /Vote details 2005/06 AGRICULTURE AND RURAL DEVELOPMENT 09 Regional Development Authorities
10
Agriculture
19
Livestock and Fisheries
21
Environment and Natural Resources
22
Co-operative Development and Marketing
36
Lands
SUB-TOTAL
PUBLIC SAFETY LAW AND ORDER 01 Office of the president
02
State house
05
Home Affairs
17
Justice and Constitutional Affairs
24
State Law Office
26
Judiciary Department
SUB-TOTAL
HEALTH 11 Health
SUB-TOTAL
EDUCATION 31 Education
Science and Technology
SUB-TOTAL
In Millions of Kshs 2006/07 2007/08
Gross Loan Grant local AIA Gok Gross Loan Grant Gok Gross Loan Grant Gok Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant Local AIA GOK
609 222 104 107 176 3,115 1,031 485 1,598 1,381 890 231 260 605 11 254 340 59 10 49 258 79 180 6,027 2,154 1,163 107 2,603
792 311 135 110 235 4,607 2,035 922 1,650 1,795 1,157 300 338 1,485 390 650 445 120 50 70 310 102 208 9,108 3,892 2,160 110 2,946
Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK
7,609 3,078 1,849 2,682 250 250 1,216 346 870 922 814 108 145 110 35 281 281 10,424 3,078 3,120 4,226
9,623 4,156 2,366 3,101 260 260 1,950 856 1,094 1,660 1,384 276 215 112 103 400 400 14,108 4,156 4,719 5,234
Gross Loan Grant GOK Gross Loan Grant GOK
9,943 1,354 6,107 2,482 9,943 1,354 6,107 2,482 8,201 1,025 6,231 946 185 185 8,386 1,025 6,416 945
13,920 1,896 8,855 3,169 13,920 1,896 8,855 3,169 11,136 1,332 8,817 987 259 241 19 11,395 1,332 9,057 1,006
Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK
2008/09
1,179
1,415
6,957
8,348
2,383
2,860
2,011
2,413
372
447
70 601
721
13,503
16,203
11,416
11,644
273
287
2,048
2,150
1,743
1,830
226
237
420
441
16,125
16,589
16,009
17,930
16,009
17,930
12,806
14,343
298
334
13,104
14,677
In percent of Development Expenditure 2005/06 2006/07 2007/08 2008/09 0.61 0.77 0.39 3.73 0.43 3.14 3.56 1.81 3.94 1.39 3.07 0.86 0.64 0.61 0.04 0.88 0.84 0.06 0.00 0.04 0.12 0.26 0.00 0.29 0.44 6.07 7.43 4.35 3.73 6.41
0.68 0.91 0.37 3.50 0.55 3.94 5.98 2.49 3.86 1.53 3.40 0.81 0.79 1.27 1.15 1.91 1.04 0.10 0.00 0.13 0.16 0.26 0.00 0.28 0.49 7.79 11.45 5.83 3.50 6.90
0.87
0.94
5.11
5.53
1.75
1.89
1.48
1.60
0.27
0.30
0.44
0.48
9.92
10.73
7.67 10.62 6.91 6.60 0.25 0.00 0.00 0.62 1.23 0.00 1.29 2.14 0.93 0.00 3.04 0.27 0.15 0.00 0.41 0.09 0.28 0.00 0.00 0.69 10.51 10.62 11.66 10.41
8.23 12.22 6.39 7.26 0.22 0.00 0.00 0.61 1.67 0.00 2.31 2.56 1.42 0.00 3.74 0.65 0.18 0.00 0.30 0.24 0.34 0.00 0.00 0.94 12.06 12.22 12.74 12.25
8.39
7.71
0.20
0.19
1.50
1.42
1.28
1.21
0.17
0.16
0.31
0.29
11.85
10.98
10.02 4.67 22.82 6.11 10.02 4.67 22.82 6.11
11.90 5.58 23.90 7.42 11.90 5.58 23.90 7.42
11.76
11.87
11.76
11.87
8.27 3.54 23.28 2.33
9.52 3.92 23.80 2.31
9.41
9.50
8.45 3.54 23.97 2.33
9.74 3.92 24.45 2.35
9.63
9.72
Appendix 7b: Ministerial Ceilings (Development) Cont.
Sector /Vote details PHYSICAL INFRASTRUCTURE 12 Local Government
13
Public Works
14
Transport
20
Water
30
Energy
Housing
SUB-TOTAL
GENERAL ECONOMIC SERVICES 15 Labour
16
Trade and Industry
18
Gender Sports and Culture
46
Tourism and Wildlife
Youth Affairs
SUB-TOTAL
PUBLIC ADMINISTRATION 03 Directorare of Personnel Management
04
Foreign Affais
06
Planning and National Development
07
Finance**
SUB-TOTAL
2005/06
In millions of Kshs 2006/07 2007/08
Gross Loan Grant GOK Gross Loan Grant GOK** Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Local AIA Gross Loan Grant GOK Gross Loan Grant GOK Local AIA
1,306 372 934 17,751 6,745 4,080 6,926 7,833 7,126 707 7,755 1,755 2,136 3,865 8,061 3,957 300 1,044 2,759 533 533 43,239 19,583 6,888 14,009 2,759
3,378 1,030 906 1,441 20,414 7,756 4,896 7,761 6,267 5,345 922 8,918 2,000 2,435 4,483 9,834 4,748 360 1,690 3,035 640 640 49,450 20,880 8,598 16,937 3,035
Gross Loan Grant GOK Gross Loan Grant GOK Local AIA Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Local AIA
134 134 826 468 40 317 267 117 150 1,209 400 649 160 335 335 2,770 868 806 1,096 -
228 228 908 468 40 400 510 321 188 1,269 420 681 168 360 360 3,275 888 1,043 1,344 -
Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK
273 94 179 100 100 2,098 379 1,594 126 15,933 535 576 14,822 18,405 914 2,264 15,227
287 99 188 103 103 2,203 398 1,673 132 12,573 562 605 11,406 15,167 960 2,378 11,829
Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Gross Loan Grant GOK Local AIA
26 26 26 26 99,220 28,976 26,763 40,614 2,866
100 100 300 243 100 100 30 30 30 30 560 243 260 116,984 34,004 37,053 42,725 3,146
2008/09
3,715
3,901
24,496
27,436
5,013
6,016
10,256
11,282
12,784
14,702
997
1,196
57,262
In percent of Development Expenditure 2005/06 2006/07 2007/08 2008/09 1.32 0.00 1.39 2.30 17.89 23.28 15.25 17.05 7.89 24.59 0.00 1.74 7.82 6.06 7.98 9.52 8.12 13.66 1.12 2.57 96.27
2.89 3.03 2.45 3.37 17.45 22.81 13.21 18.16 5.36 15.72 0.00 2.16 7.62 5.88 6.57 10.49 8.41 13.96 0.97 3.96 96.50
2.73
2.58
18.00
18.16
3.68
3.98
7.54
7.47
9.39
9.73
64,533
43.58 67.58 25.74 34.49 96.27
42.27 61.40 23.20 39.64 96.50
42.08
42.72
239 954
251 1,001
0.14 0.00 0.00 0.33 0.83 1.62 0.15 0.78 0.00 0.27 0.00 0.44 0.37 1.22 1.38 2.42 0.39 0.34 0.00 0.00 0.82 2.79 3.00 3.01 2.70 0.00
0.19 0.00 0.00 0.53 0.78 1.38 0.11 0.94 0.00 0.44 0.00 0.87 0.44 1.09 1.24 1.84 0.39 0.34 0.00 0.00 0.82 2.80 2.61 2.81 3.15 0.00
0.18
0.17
0.70
0.66
535
562
0.39
0.37
1,333
1,400
0.98
0.93
378
397
0.31
0.31
3,439 -
3,611 -
2.53
2.39
301
316
0.28 0.00 0.35 0.44 0.10 0.00 0.00 0.25 2.11 1.31 5.95 0.31 16.06 1.85 2.15 36.49 18.55 3.15 8.46 37.49
0.25 0.00 0.27 0.44 0.09 0.00 0.00 0.24 1.88 1.17 4.52 0.31 10.75 1.65 1.63 26.70 12.96 2.82 6.42 27.69
0.22
0.21
180
180
0.13
0.12
2,313 13,202
2,429 13,862
1.70
1.61
9.70
9.18
15,997
16,788
11.75
11.11
100
100
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.00 0.06 0.03 0.00 0.00 0.06 100.00 100.00 100.00 100.00 100.00
0.09 0.00 0.00 0.23 0.26 0.00 0.66 0.00 0.09 0.00 0.00 0.23 0.03 0.00 0.00 0.07 0.03 0.00 0.00 0.07 0.48 0.00 0.66 0.61 100.00 100.00 100.00 100.00 100.00
0.07
0.07
350
400
0.26
0.26
100
100
0.07
0.07
50
60
0.04
0.04
50
60
0.04
0.04
650
720
0.48
0.48
136,088
151,050
100.00
100.00
INFORMATION COMMUNICATION AND TECHNOLOGY E-government
Statistical Services
Information Technology Services
Resource Survey snd Remote Sensing
Information and Communication
SUB-TOTAL
GRAND TOTAL
Finance includes Constituency Development Fund.
Appendix 8: Total Ministerial Ceilings Sector/Vote
2005/06 DEVELOPMENT 09 Regional Development Authorities 10 Agriculture 19 Livestock and Fisheries 21 Environment and Natural Resources Co-operative Development and 22 Marketing 36 Lands SUB-TOTAL PUBLIC SAFETY LAW AND ORDER 01 Office of the president 02 State House 05 Home Affairs 17 Justice and Constitutional Affairs 24 State Law Office 26 Judiciary Department 34 Kenya Anti-Corruption Commission SUB-TOTAL HEALTH 11 Health SUB-TOTAL EDUCATION 31 Education Science and Technology SUB-TOTAL PHYSICAL INFRASTRUCTURE 12 Local Government 13 Public Works 14 Transport 20 Water 30 Energy Housing SUB-TOTAL GENERAL ECONOMIC SERVICES 15 Labour 16 Trade and Industry 18 Gender Sports and Culture 46 Tourism and Wildlife Youth Affairs SUB-TOTAL PUBLIC ADMINISTRATION
2006/07
In Million of KShs 2007/08 2008/09
In Percent of Total Expenditures 2005/06 2006/07 2007/08 2008/09
Gross Gross Gross Gross
1145 8230 3857 3130
1,381 11,451 4,678 4,226
1,827 14,139 5,482 4,919
2,127 16,204 6,137 5,493
0.33 2.35 1.10 0.89
0.39 2.94 1.20 1.08
0.52 3.29 1.27 1.14
0.61 3.53 1.34 1.20
Gross Gross Gross
772 1494 18628
889 1,663 24,288
1,188 2,034 29,588
1,311 2,238 33,510
0.22 0.43 5.31
0.23 0.43 6.23
0.28 0.47 6.88
0.29 0.49 7.30
Gross Gross Gross Gross Gross Gross Gross Gross
35177 1113 7314 1479 812 1937 1201 49033
38,063 1,166 8,208 2,231 898 2,139 1,264 53,969
40,690 1,197 8,397 2,331 948 2,207 1,323 57,094
41,041 1,229 8,588 2,429 984 2,278 1,363 57,913
10.03 0.32 2.09 0.42 0.23 0.55 0.34 13.99
9.77 0.30 2.11 0.57 0.23 0.55 0.32 13.85
9.46 0.28 1.95 0.54 0.22 0.51 0.31 13.27
8.94 0.27 1.87 0.53 0.21 0.50 0.30 12.61
Gross Gross
30153 30153
35,048 35,048
38,929 38,929
43,138 43,138
8.60 8.60
8.99 8.99
9.05 9.05
9.40 9.40
Gross Gross Gross
94578 2169 96748
105,387 2,442 107,829
116,670 2,589 119,260
126,514 2,809 129,322
26.98 0.62 27.59
27.04 0.63 27.67
27.11 0.60 27.72
27.56 0.61 28.17
Gross Gross Gross Gross Gross Gross Gross
7440 28688 11099 10063 8386 1745 67421
10,132 33,542 9,696 11,644 10,194 1,942 77,150
11,429 38,938 8,876 13,303 13,180 2,371 88,096
12,713 43,897 10,229 14,606 15,126 2,646 99,216
2.12 8.18 3.17 2.87 2.39 0.50 19.23
2.60 8.61 2.49 2.99 2.62 0.50 19.80
2.66 9.05 2.06 3.09 3.06 0.55 20.47
2.77 9.56 2.23 3.18 3.29 0.58 21.61
Gross Gross Gross Gross Gross Gross
932 2504 2003 2837 1568 9,845
1,116 3,007 2,334 2,979 1,655 11,090
1,172 3,157 2,450 3,128 1,738 11,645
1,230 3,315 2,573 3,284 1,824 12,227
0.27 0.71 0.57 0.81 0.45 2.81
0.29 0.77 0.60 0.76 0.42 2.85
0.27 0.73 0.57 0.73 0.40 2.71
0.27 0.72 0.56 0.72 0.40 2.66
Gross Gross Gross Gross Gross Gross Gross Gross Gross Gross
1052 6357 2735 26012 442 184 1106 5556 1789 45233
1,090 6,567 2,859 22,966 455 189 1,140 5,723 4,343 45,331
1,129 6,857 2,988 23,919 469 195 1,175 5,895 6,974 49,600
1,170 7,079 3,124 24,913 483 201 1,211 6,071 2,174 46,425
0.30 1.81 0.78 7.42 0.13 0.05 0.32 1.58 0.51 12.90
0.28 1.69 0.73 5.89 0.12 0.05 0.29 1.47 1.11 11.63
0.26 1.59 0.69 5.56 0.11 0.05 0.27 1.37 1.62 11.53
0.25 1.54 0.68 5.43 0.11 0.04 0.26 1.32 0.47 10.11
Gross
26652
27,521
28,419
29,349
7.60
7.06
6.60
6.39
45 National Intelligency Security Services Gross Gross SUB-TOTAL AND TECHNOLOGY 01 Directorate of e-Government Gross 06 Statistical Services Gross 07 Information Technology Services Gross 21 Resource Survey snd Remote Sensing Gross 32 Information and Communication Gross Gross SUB-TOTAL Gross GRAND TOTAL
5200 31852
5,356 32,877
5,517 33,936
5,682 35,031
1.48 9.08
1.37 8.44
1.28 7.89
1.24 7.63
64 199 551 92 784 1690 350601
165 512 486 126 826 2,116 389,698
169 576 359 151 899 2,154 430,301
200 650 370 170 952 2,342 459,124
0.02 0.06 0.16 0.03 0.22 0.48 100
0.04 0.13 0.12 0.03 0.21 0.54 100
0.04 0.13 0.08 0.04 0.21 0.50 100
0.04 0.14 0.08 0.04 0.21 0.51 100
03 Directorare of Personnel Management 04 Foreign Affais 06 Planning and National Development 07 Finance 24 East Africa Cooperation 27 Public Service Commission 28 Kenya National Audit 29 National Assembly 33 Electoral Commission SUB-TOTAL NATIONAL SECURITY 08 Department of Defence
Appendix 9:Ministerial Expenditure Ceilings for the 2006/07 Budget (In million Shillings) 2006/07 Budget Ceilings Sector/Vote Wages Transfers to parastatals
AGRICULTURE AND RURAL DEVELOPMENT 09 10 19 21 22 36 SUB-TOTAL AGRIC. AND RURAL DEVEL. PUBLIC SAFETY LAW AND ORDER 01 02 05 17 25 34 26 SUB-TOTAL PUBLIC SAFETY LAW/ORDER HEALTH 11 SUB-TOTAL HEALTH EDUCATION 31 SUB-TOTAL EDUCATION PHYSICAL INFRASTRUCTURE 12 13 14 20 30 SUB-TOTAL PHYSICAL INFRASTRUCTURE GENERAL ECONOMIC SERVICES 15 16 18 46
Recurrent Non wage recurrent Core Others Total Net poverty
Gross
GOK
Loans
Development Grants Local AIA
Gross Budget Developme GOK nt partners recurrent+ Developme nt
Gross
4
5
=7-1-2-3
= 7-6
6
7
8
9
10
589 6,066 2,767 2,712 757 1,220 14,112 26,102 905 6,214 566 565 1,264 1,297 36,912 21,054 21,054 94,179 2,182 96,360 774 1,909 1,633 2,452 149 670 7,587 810 1,648 1,814 1,584 1,258 7,116 763 5,471 655 9,786 455 187 1,097 5,721 4,340 28,475 23,869 5,356 29,225
0 778 115 30 13 133 1,069
589 6,845 2,882 2,741 770 1,353 15,180
235 1,650 338 445 70 208 2,946
311 2,035 1,157 390 3,892
135 922 300 650 50 102 2,160
110 110
792 4,607 1,795 1,485 120 310 9,108
2,338 1 44 5 118 0 442 2,948
28,440 906 6,258 571 683 1,264 1,739 39,860
3,101 260 1,094 276 103 400 5,234
4,156 4,156
2,366 856 1,384 112 4,719
-
73 73
21,127 21,127
3,169 3,169
1,896 1,896
73 1 74
94,251 2,183 96,434
5,980 11,220 1,797 273 211 633 20,114
6,754 13,129 3,430 2,725 360 1,302 27,700
78 450 10 125 36 699
888 2,098 1,824 1,710 1,295 7,815
40 993 607 2 43 2 3 1,689
803 6,464 655 10,393 455 189 1,140 5,723 4,343 30,164
-
136 2,492 502 410 255 409 4,204 5,928 793 1,374 160 331 0 902 9,488 272 272 9,384 715 10,098 5,314 5,899 2,662 244 254 1,162 15,535 504 1,177 392 587 826 3,486 531 4,243 347 9,563 400 125 14 2,991 3,851 22,064 27,521 5,356 32,877
3,652 3,652
27,521 5,356 32,877
987 19 1,006 1,441 7,761 922 4,483 1,690 640 16,937 228 400 188 168 360 1,344 188 103 132 11,406 11,829 -
33,236
65 88 265 74 480 973 98,998
65 212 356 95 742 1,471 242,311
1 30 2 54 86 30,403
65 212 386 96 796 1,556 272,714
100 57 100 30 30 317 42,782
1
2
3
Regional Authorities Agriculture Livestock and Fisheries Environment and Natural Resources Co-operative Development and Marke Lands
50 1,992 1,875 1,142 335 812 6,206
403 1,413 209 743 54 2,821
947 297 447 126 132 1,949
Office of the president State House Home Affairs Justice and Constitutional Affairs State Law Office Kenya Anticurruption Judiciary Department
16,484 113 4,467 96 323 837 22,320
270 299 274 843
5,758 117 42 28 1,264 7,209
Health
10,784 10,784
5,137 5,137
4,934 4,934
Education Science and Technology Science and Technology
63,112 1,468 64,580
10,864 10,864
10,891 10,891
Local Government Roads and Public Works Transport Water Energy Housing
100 1,445 534 1,465 107 140 3,790
234 345 579
1,340 5,785 672 7,797
Labour Trade and Industry Gender Sports and Culture Tourism and Wildlife Youth
336 453 806 86 469 2,150
468 567 1,037 2,072
48 59 107
237 2,221 232 830 55 64 776 2,732 492 7,640
34 76 110
350 350
-
-
124 121 22 226 493 117,963
90 90 22,516
SUB-TOTAL GENERAL ECONOMIC SERVICES PUBLIC ADMINISTRATION 03 Directorare of Personnel Management 04 Foreign Affais 06 Planning and National Development 07 Finance 24 East Africa Cooperation 27 Public Service Commission 28 Kenya National Audit 29 National Assembly 33 Electoral Commission SUB-TOTAL PUBLIC ADMINISTRATION NATIONAL SECURITY 08 Department Of Defence 45 National Intelligency Security Service SUB-TOTAL NATIONAL SECURITY INFORMATION COMMUNICATION & TECHNOLOGY 01 Directorate of E-government 06 Statistical Services 07 Information Technology 21 Resource Survey and Remote Sensing 32 Information and Communications SUB-TOTAL (ICT) GRAND TOTAL
AIA
Grand Total
12
13
14
15
=8-11
=9+10
=8+7
=7+12
446 2,956 1,457 1,040 50 102 6,052
1,027 8,495 3,220 3,186 839 1,561 18,329
1,381 11,451 4,678 4,226 889 1,663 24,288
-
9,623 260 1,950 1,660 215 400 14,108
6,522 856 1,384 112 8,875
31,541 1,166 7,352 847 785 1,264 2,139 45,094
38,063 1,166 8,208 2,231 898 1,264 2,139 53,969
8,855 8,855
-
13,920 13,920
10,751 10,751
24,297 24,297
35,048 35,048
1,332 1,332
8,817 241 9,057
-
11,136 259 11,395
10,149 241 10,389
95,238 2,201 97,439
105,387 2,442 107,829
1,030 7,756 5,345 2,000 4,748 20,880
906 4,896 2,435 360 8,598
3,035 3,035
3,378 20,414 6,267 8,918 9,834 640 49,450
1,936 12,653 5,345 4,435 5,108 29,478
8,196 20,890 4,352 7,208 5,086 1,942 47,673
10,132 33,542 9,696 11,644 10,194 1,942 77,150
468 420 888
40 321 681 1,043
-
228 908 510 1,269 360 3,275
508 321 1,101 1,931
1,116 2,498 2,012 1,878 1,655 9,159
1,116 3,007 2,334 2,979 1,655 11,090
398 562 960
99 1,673 605 2,378
-
287 103 2,203 12,573 15,167
99 2,071 1,167 3,337
991 6,567 788 21,799 455 189 1,140 5,723 4,343 41,994
1,090 6,567 2,859 22,966 455 189 1,140 5,723 4,343 45,331
-
-
-
-
-
27,521 5,356 32,877
27,521 5,356 32,877
34,004
243 243 37,053
3,146
100 300 100 30 30 560 116,984
243 243 71,056
165 269 486 126 826 1,873 318,734
165 512 486 126 826 2,116 389,698
11
Details
Appendix 10: Core Poverty Programme 2005/2006 (Recurrent) In Kshs. 2005/06 2006/07
EDUCATION,SCIENCE &TECHNOLOGY Primary Education Quality Assurance and Standards Provision Administration(FPE) District Administrative Services(FPE) Kenya Institute of Education(FPE) Board of Governor maintained schools(Bursary)
96,106,560 68,060,496 457,199,600 195,712,240 1,823,738,000
115,327,872 81,672,595 548,639,520 234,854,688 2,188,485,600
Early Childhood programme Expenses of Primary Schools
49,000,000 5,538,528,285
58,800,000 6,646,233,942
School Equipment Scheme( Text books) School Feeding Programme Primary Teachers Trainning(FPE) Post Primary Handicapped Special Secondary Schools(Schools for the handicapped)
49,846,435 210,134,521 347,216,000 62,000,000 45,000,000
59,815,722 252,161,425 416,659,200 74,400,000 54,000,000
Primary Schools for Handicapped Kenya Institute of Special Education(FPE)
100,000,000 33,519,100
120,000,000 40,222,920
wages TOTAL HEALTH Sexually Transmitted Infections National Aids Control Programme District Hospitals Mental Health Services Spinal Injury Hospitals Dental health Services Environmental Health Services Communicable and Vectorborne Diseases Nutrition programme Family Planning Maternal and Child Health care
1,151,007,706 10,227,068,943
1,174,027,860 12,065,301,345
6,768,183 9,609,115 1,257,858,725 130,427,831 13,373,061 13,301,072 22,673,960 108,608,102 4,661,174 46,875,193
8,121,820 11,530,938 1,509,430,470 156,513,397 16,047,673 15,961,286 27,208,752 130,329,722 5,593,409 56,250,232
Rural Health Centers and Dispensaries Rural Health Training and Demonstration centres
2,227,356,812 43,672,013
2,672,828,174 52,406,416
Health Education National Public Health Laboratory Drug control Inspectorate Control of Malaria Kenya Expanded Programme of Immunization(KEPI)
3,272,846 43,031,395 1,516,091 23,435,681 42,467,497
3,927,415 51,637,674 1,819,309 28,122,817 50,960,996
National Liprosy and Tuberclosis Vectorborne Disease Control Non Communicable Diseases Control and Management
100,576,800 11,477,511 522,000
120,692,160 13,773,013 626,400
Wages TOTAL OFFICE OF THE PRESIDENT
7,226,157,181 11,337,642,243
7,370,680,325 12,304,462,399
National Aids Council Relief and Rehabilitation National Food security Disaster Emergency Response Co-ordination
250,000,000 7,022,418,104 1,602,642,342 7,000,000
300,000,000 3,426,901,725 1,923,170,810 8,400,000
National Disaster Anti -Terorrism Operations Anti-Stock Theft Unit Wages TOTAL OVP AND MINISTRY OF HOME AFFAIRS
5,176,833 71,054,000 6,300,000 0 8,964,591,279
6,212,200 85,264,800 7,560,000 0 5,757,509,535
Provincial Childrens Services District Childrens Services Community service order Orphans and Vulnerable Children Services
4,160,000 21,500,000 15,000,000 48,000,000
4,992,000 25,800,000 18,000,000 57,600,000
National Council for Children Services wages TOTAL
9,000,000 52,910,654 150,570,654
10,800,000 53,968,867 171,160,867
34,206,000 81,700,000 64,720,000 83,865,000 26,675,900
41,047,200 98,040,000 77,664,000 100,638,000 32,011,080
77,450,000 3,900,000 833,046,632 1,205,563,532
92,940,000 4,680,000 849,707,565 1,296,727,845
Agricultural Department HQRs Headquarters Crop Production Services Headquarters Horticultural Crop Production Services
32,440,630 1,000,000 117,000,000
38,928,756 1,200,000 140,400,000
Headquarters Agricultural Extension Services
62,752,192
75,302,630
2007/08
2008/09
138,393,446 98,007,114 658,367,424 281,825,626
166,072,136 117,608,537 790,040,909 338,190,751
2,626,182,720 70,560,000
3,151,419,264 84,672,000
7,975,480,730 71,778,866 302,593,710 499,991,040 89,280,000
9,570,576,876 86,134,640 363,112,452 599,989,248 107,136,000
64,800,000 144,000,000
77,760,000 172,800,000
48,267,504 1,408,833,432 14,478,361,613 9,746,184 13,837,126 1,811,316,564 187,816,077 19,257,208 19,153,544 32,650,502 156,395,667 6,712,091
57,921,005 1,690,600,119 17,374,033,936 11,695,420 16,604,551 2,173,579,877 225,379,292 23,108,649 22,984,252 39,180,603 187,674,800 8,054,509
67,500,278 3,207,393,809
81,000,334 3,848,872,571
62,887,699 4,712,898 61,965,209 2,183,171 33,747,381
75,465,238 5,655,478 74,358,251 2,619,805 40,496,857
61,153,196 144,830,592 16,527,616
73,383,835 173,796,710 19,833,139
751,680 8,844,816,390 14,765,354,879 360,000,000 4,112,282,070 2,307,804,972
902,016 10,613,779,667 17,718,425,855 432,000,000 4,934,738,484 2,769,365,967
10,080,000 7,454,640 102,317,760 9,072,000 6,909,011,442
12,096,000 8,945,567 122,781,312 10,886,400 8,290,813,730
5,990,400 30,960,000 21,600,000
7,188,480 37,152,000 25,920,000
69,120,000 12,960,000 64,762,640 205,393,040 -
82,944,000 15,552,000 77,715,169 246,471,649 -
49,256,640 117,648,000 93,196,800 120,765,600
59,107,968 141,177,600 111,836,160 144,918,720
38,413,296 111,528,000 5,616,000 1,019,649,078 1,556,073,414 46,714,507 1,440,000
46,095,955 133,833,600 6,739,200 1,223,578,893 1,867,288,096 56,057,409 1,728,000
168,480,000
202,176,000
90,363,156
108,435,788
360,000,000 47,215,765
432,000,000 56,658,919
111,600,000 39,447,236 265,114,804
133,920,000 47,336,683 318,137,765
6,123,047 1,987,849,166 3,124,347,682
7,347,656 2,385,418,999 3,749,217,219
ENVIRONMENT & NATURAL RESOURCES
HQRs Forestry Development Forestry and Plantation Development Catchment and Natural forests Rural Afforestration Arid and Semi Arid Lands Forestry Development Forest Patrol Unit Environment Policy Wages TOTAL AGRICULTURE
Cotton Development
250,000,000
300,000,000
Farmers Training Centres Food Security and Management Services(Njaa Marufuku)
32,788,726 77,500,000
39,346,471 93,000,000
Provincial Agricultural Extension Services District Agricultural Extension Services District Horticultural Crop Production Services(Sericulture Station Thika) Crop protection wages TOTAL
27,393,914 184,107,503 4,252,116
32,872,697 220,929,004 5,102,539
0 1,624,059,776 2,413,294,857
0 1,656,540,972 2,603,623,069
Appendix 10: Core Poverty Programme 2005/2006 (Recurrent) Cont.In Kshs. 2007/08 2005/06 Revised 2006/07 MINISTRY OF LABOUR AND HUMAN RESOURCES DEVELOPMENT
2008/09
41,607,812
49,929,375
9,169,516 25,814,752 73,622,244
4,757,760 11,003,419 30,977,702 88,346,693
5,709,312 13,204,102 37,173,242 106,016,031
1,184,725,125 0 1,184,725,125
1,264,101,708 0 1,264,101,708
1,516,922,050 1,516,922,050
1,820,306,460 1,820,306,460
Kenya Law Reform Commission Wages Total LANDS
34,800,352 28,752,208 63,552,560
41,760,422 29,327,252 71,087,675
Purchase of Farms wages TOTAL LOCAL GOVERNMENT
110,034,675 0 110,034,675
132,041,610 0 132,041,610
50,112,507 35,192,703 85,305,209 158,449,932 158,449,932 -
60,135,008 42,231,243 102,366,251 190,139,918 190,139,918 -
1,116,800,000
1,340,160,000
0 1,116,800,000
0 1,340,160,000
1,608,192,000 1,608,192,000 -
1,929,830,400 1,929,830,400 -
4,820,638,324
5,784,765,989
0 4,820,638,324
0 5,784,765,989
6,941,719,187 6,941,719,187
8,330,063,024 8,330,063,024
27,528,248 15,055,100 5,645,600 1,094,853 15,632,176 64,955,977
33,033,898 18,066,120 6,774,720 1,313,824 15,944,820 75,133,381
39,640,677 21,679,344 8,129,664 1,576,588 19,133,783 90,160,057
47,568,813 26,015,213 9,755,597 1,891,906 22,960,540 108,192,068
1,870,000 398,070,150 22,500,000 8,500,000 56,628,734 36,100,000 10,600,000 3,550,000 22,000,000 0 851,905,252 1,411,724,136
2,244,000 477,684,180 27,000,000 10,200,000 67,954,481 43,320,000 12,720,000 4,260,000 26,400,000 0 868,943,357 1,540,726,018
Statutory Boards and Corporations Central Government Audits Local Government Wages TOTAL STATE LAW OFFICE
73,442,823 197,576,346 20,622,500 745,799,141 1,037,440,810
88,131,388 237,091,615 24,747,000 760,715,124 1,110,685,127
Public Prosecutions Department Civil Litigation wages TOTAL LIVESTOCK AND FISHERIES
17,330,820 6,315,353 98,129,330 121,775,503
20,796,984 7,578,424 100,091,917 128,467,324
2,692,800 573,221,016 32,400,000 12,240,000 81,545,377 51,984,000 15,264,000 5,112,000 31,680,000 1,042,732,028 1,848,871,221 105,757,665 284,509,938 29,696,400 912,858,149 1,332,822,152 24,956,381 9,094,108 120,110,300 154,160,789
3,231,360 687,865,219 38,880,000 14,688,000 97,854,452 62,380,800 18,316,800 6,134,400 38,016,000 1,251,278,434 2,218,645,466 126,909,198 341,411,926 35,635,680 1,095,429,778 1,599,386,582 29,947,657 10,912,930 144,132,360 184,992,947
Rural Dairy Services District Production Services Livestock improvement stations Tick Control Programme District Vertinary Services Vertinary Clinical Services Tse-Tse Control Services Livestock Training Support services Pastoral Areas Training Centres - Narok Griftu Pastoral Training Centre-Wajir Mobile Pastoral Training Units -Isiolo District Livestock Education and Extension Services Fisheries wages TOTAL COOPERATIVE DEVELOPMENT AND MARKETING Provincial Co-operative Extension District Coopreative Extension Services wages TOTAL GRAND TOTAL
3,520,607 44,794,428 7,754,917 1,785,907 68,551,994 2,579,890 11,848,150 1,407,848 1,992,937 1,108,751 1,514,005 7,629,035
4,224,728 53,753,314 9,305,900 2,143,088 82,262,393 3,095,868 14,217,780 1,689,418 2,391,524 1,330,501 1,816,806 9,154,842
5,069,674 64,503,976 11,167,080 2,571,706 98,714,871 3,715,042 17,061,336 2,027,301 2,869,829 1,596,601 2,180,167
6,083,609 77,404,772 13,400,497 3,086,047 118,457,846 4,458,050 20,473,603 2,432,761 3,443,795 1,915,922 2,616,201
92,761,746 911,011,654 1,158,261,869
111,314,095 929,231,887 1,225,932,145
10,985,810 133,576,914 1,115,078,264 1,471,118,574
13,182,972 160,292,297 1,338,093,917 1,765,342,289
21,737,000 83,304,600 172,224,276 277,265,876 45,731,054,520
26,084,400 99,965,520 175,668,762 301,718,682 47,247,226,960
31,301,280 119,958,624 210,802,514 362,062,418 56,696,672,353
37,561,536 143,950,349 252,963,017 434,474,901 68,036,006,823
Jua Kali development Division Provincial Enterprises Development Offices District Enterprises Development Office
28,894,314 3,304,000
34,673,177 3,964,800
7,641,263 25,308,580 65,148,157
Anti - Corruption Commission wages TOTAL MINISTRY OF JUSTICE AND CONSTITUTIONAL AFFAIRS
TOTAL KENYA ANTI-CORRUPTION COMMISSION
Grants to Local Authorities (LATF at 20%-Local Government) wages TOTAL ROADS AND PUBLIC WORKS Road Maitenance Programme-Grants to the Kenya Roads Board at 40% wages TOTAL GENDER, SPORTS, CULTURE AND SOCIAL SERVICES Gender and Development Community Based Nutrition Social Welfare Community Mobilization Wages TOTAL WATER RESOURCES MANAGEMENT AND DEVELOPMENT Provincial Water Services District Water Services Water Resource Pollution Control Water Resources- Surface water Water Resources-Ground water Other Munincipalities Water Supplies Sewerage Maintenance Water Conservation and Dam Water Rights Applied Water Research Wages TOTAL NATIONAL AUDIT OFFICE
Priority Programme
Appendix 10b: Core Poverty Programmes 2006/07 (Development) in Ksh. 2005/06 2006/07 2007/08
2008/09
OFFICE OF THE PRESIDENT Support to Police Reforms National Aids Control Council El-nino Emergency Project Relief Rehabilitation & disaster Programme
458,380,000 2,350,000,000 334,374,854
550,056,000 2,820,000,000 401,249,825
Arid Lands Resource Management Project TOTAL OVP & MINISTRY OF HOME AFFAIRS
1,091,929,412 4,234,684,266
1,310,315,294 5,081,621,119 -
Childrens services Street Children Rehabilitation Centre TOTAL MINISTRY OF AGRICULTURE
68,770,000 32,000,000 100,770,000
82,524,000 38,400,000 120,924,000
Crop Production Horticultural Crop Production Central Kenya Dry Areas & Small Holder Community Services Soil and Water Conservation(NALEP) National Extension Project Lake Victoria Environment Project(LVEMP) Kenya Agricultural Research Institute(KARI) Soil and Water Management Research Nartional Hoticultural Research Project Veterinary Research Range land Research Animal Production Research TOTAL MINISTRY OF HEALTH
105,300,000 160,326,668 357,265,000
126,360,000 192,392,002 428,718,000
255,419,000 362,232,500 -
306,502,800 434,679,000 -
1,130,478,080
1,356,573,696
792,080,640 4,060,800,000 -
481,499,790 1,572,378,353 6,097,945,343
577,799,748 1,886,854,024 7,317,534,412
99,028,800 46,080,000 145,108,800 151,632,000 230,870,402
118,834,560 55,296,000 174,130,560 181,958,400 277,044,482
514,461,600 367,803,360 521,614,800
617,353,920 441,364,032 625,937,760
13,000,000 131,338,817 31,711,349 5,800,000 41,154,912 2,594,026,326
15,600,000 157,606,580 38,053,619 6,960,000 49,385,894 3,112,831,591
Health Develoment project (DARE Project)
681,500,000
817,800,000
District Health Hospitals Intergrated Rural Health Services Environmental Health Services Rural Health Centres & Dispensaries Mental Health Services Establishment & equiping for parasite Kenya Medical Supplies Agency(KEMSA)
1,194,522,760 258,000,000 26,800,000 2,133,000,000 5,000,000 20,000,000 185,000,000
1,433,427,312 309,600,000 32,160,000 2,559,600,000 6,000,000 24,000,000 222,000,000
KEPI Specialized Global Fund Special Global TB Special Global Fund Malaria Communicable Diseases Control TOTAL
297,341,504 980,000,000 155,000,000 2,134,365,707 559,500,000 8,630,029,971
356,809,805 1,176,000,000 186,000,000 2,561,238,848 671,400,000 10,356,035,965
Minor Roads Programme TOTAL MINISTRY OF ENVIRONMENT AND NATURAL RESOURCES
1,231,200,000 1,231,200,000
1,477,440,000 1,477,440,000
Lake Victoria Environmental Management Project Water Weeds Control Sector Policy Intergration Community Action Plan Forestry Development Arid and Semi-arid Lands Forestry Development Soil Conservation Environment Policy Analysis Support to District Environment TOTAL MINISTRY OF EDUCATION
41,900,000
50,280,000
5,800,000 13,100,000 47,805,000 45,577,096
6,960,000 15,720,000 57,366,000 54,692,515
12,000,000 87,261,373 50 137 562 303,581,031
14,400,000 104,713,648 60 165 074 364,297,237
MINISTRY OF ROADS AND PUBLIC WORKS
Strengthening Education Management Information System HIV/AIDS Campaighn(TSC) School Feeding Programme Primary School Education Early Childhood Programme Curriculum Support Services BOG Schools TOTAL MINISTRY OF LABOUR AND HUMAN RESOURCE DEVELOPMENT
660,067,200 3,384,000,000 -
-
1,627,888,435 18,720,000 189,127,896 45,664,343 8,352,000 59,263,073 3,735,397,909 -
1,953,466,122 22,464,000 226,953,476 54,797,211 10,022,400 71,115,688 4,482,477,491 -
981,360,000 1,720,112,774 371,520,000 38,592,000 3,071,520,000 7,200,000 28,800,000
1,177,632,000 2,064,135,329 445,824,000 46,310,400 3,685,824,000 8,640,000 34,560,000
266,400,000 428,171,766 1,411,200,000 223,200,000 3,073,486,618 805,680,000 12,427,243,158 -
319,680,000 513,806,119 1,693,440,000 267,840,000 3,688,183,942 966,816,000 14,912,691,790 -
-1,772,928,000 1,772,928,000
-2,127,513,600 2,127,513,600
-
-
60,336,000 8,352,000 18,864,000 68,839,200
72,403,200 10,022,400 22,636,800 82,607,040
65,631,018 17,280,000 125,656,377 72,198,089 437,156,685 -
78,757,222 20,736,000 150,787,653 86,637,707 524,588,022 -
1,672,498,152 3,072,960,000 7,200,000 237,600,000 4,990,258,152
2,006,997,782 3,687,552,000 8,640,000 285,120,000 5,988,309,782
160,800,000 160,800,000
192,960,000 192,960,000
231,552,000 231,552,000
699,671,820 699,671,820
839,606,184 839,606,184
1,007,527,421 1,007,527,421
1,161,457,050 2,134,000,000 5,000,000 165,000,000 3,465,457,050
Jua Kali Programme TOTAL MINISTRY OF PLANNING AND NATIONAL DEVELOPMENT
134,000,000 134,000,000
Community Development Trust Fund TOTAL
583,059,850 583,059,850
1,393,748,460 2,560,800,000 6,000,000 198,000,000 4,158,548,460 -
Appendix 10b: Core Poverty Programmes 2005/06 (Development) Cont.(In Kshs.) 2005/06 2006/07 2007/08 MINISTRY OF GENDER, SPORTS, CULTURE AND SOCIAL SERVICES Community Based Nutritional Programme Gender Mainstreaming & Empowerment of Women Social Welfare TOTAL
75,000,000 5,700,000
90,000,000 6,840,000
120,724,232 201,424,232
144,869,078 241,709,078
306,150,000
367,380,000
646,756,000
776,107,200
MINISTRY OF WATER AND IRRIGATION Construction of Water Supplies- Special water Programmes Water Conservation Structures-Rural Programmes Construction of Water Supplies-urban Special Programmes Water Rights Water resources Construction of sewerages Integrated ASAL Programmes Turkana Rehabilitation Project Construction of rural Water Supply TOTAL JUSTICE AND CONSTITUTIONAL AFFAIRS
1,290,687,695
1,548,825,234
159,000,000 723,000,000 236,500,000 15,550,000 250,000 51,000,000 3,428,893,695
190,800,000 867,600,000 283,800,000 18,660,000 300,000 61,200,000 4,114,672,434 -
1,666,023,099 1,666,023,099
SFT State lands Schemes SFT Shirika Conventional Schemes Slum rehabilitation SFT Magarini Settlement Scheme TOTAL TRADE AND INDUSTRY
14,100,000 5,700,000 406,837,588 5,700,000 432,337,588
Trade development(micro & loans) Loans to Kenya Industrial Estates Livestock Based Industries TOTAL FINANCE
10,000,000 52,000,000 498,367,000 560,367,000
1,999,227,719 1,999,227,719
16,920,000 6,840,000 488,205,106 6,840,000 518,805,106 12,000,000 62,400,000 598,040,400 672,440,400
52,000,000
62,400,000
299,500,000 28,000,000 379,500,000
359,400,000 33,600,000 455,400,000
12,000,000 2,964,000,000 2,976,000,000
14,400,000 3,556,800,000 3,571,200,000
Animal production farms National Dairy Production ASAL Development Projects Fisheries Resource Development Programme Fisheries Stations Fisheries Research and Hatchery Stations Disease and Pest Control Services Veterinary Investigation Laboratories Veterinary Farms Development TOTAL
35,400,000 69,000,000 913,600,000 45,600,000 10,660,000 37,100,000 11,200,000 158,500,000 14,100,000 7,000,000 1,302,160,000
42,480,000 82,800,000 1,096,320,000 54,720,000 12,792,000 44,520,000 13,440,000 190,200,000 16,920,000 8,400,000 1,562,592,000
LOCAL GOVERNMENT 360. Planning and Development Environment and Urban Development Project Basic Infrustructure facilities to Local Authority TOTAL COOPERATIVE DEVELOPMENT & MARKETING
692,174,510 457,740,000 1,149,914,510
830,609,412 549,288,000 1,379,897,412 -
Provincial Co-operative Extension Services District Coopreative Extension Services TOTAL STATE LAW OFFICE
19,200,000 19,200,000
23,040,000 23,040,000
Hqrs. Administrative Services TOTAL JUDICIARY SERVICES
35,000,000 35,000,000
42,000,000 42,000,000
175,520,000 64,600,000 240,120,000 33,667,748,618
210,624,000 77,520,000 288,144,000 40,401,298,342
wood fuel resources development Rural electrification TOTAL
LIVESTOCK & FISHERIES DEVELOPMENT
High Court of Kenya Margistrates' and Kadhis' Courts TOTAL GRAND TOTAL
108,000,000
129,600,000
8,208,000 173,842,894 290,050,894
9,849,600 208,611,473 348,061,073
-
Democratic and Good governance TOTAL LANDS
Rehabilitation and Reconstruction of District Cash Offices Accounting General Services Parastatal Reform TOTAL ENERGY
2008/09
-
440,856,000
529,027,200
931,328,640
1,117,594,368
1,858,590,281 228,960,000 1,041,120,000 340,560,000 22,392,000 360,000 73,440,000 4,937,606,921
2,230,308,337 274,752,000 1,249,344,000 408,672,000 26,870,400 432,000 88,128,000 5,925,128,305
2,399,073,263 2,399,073,263 20,304,000 8,208,000 585,846,127 8,208,000 622,566,127 14,400,000 74,880,000 717,648,480 806,928,480 -
2,878,887,915 2,878,887,915 24,364,800 9,849,600 703,015,352 9,849,600 747,079,352 17,280,000 89,856,000 861,178,176 968,314,176 -
74,880,000 431,280,000 40,320,000 546,480,000 17,280,000 4,268,160,000 4,285,440,000 -
89,856,000 517,536,000 48,384,000 655,776,000 20,736,000 5,121,792,000 5,142,528,000 -
50,976,000 99,360,000 1,315,584,000 65,664,000 15,350,400 53,424,000 16,128,000 228,240,000 20,304,000 10,080,000 1,875,110,400
61,171,200 119,232,000 1,578,700,800 78,796,800 18,420,480 64,108,800 19,353,600 273,888,000 24,364,800 12,096,000 2,250,132,480
996,731,294 659,145,600 1,655,876,894
1,196,077,553 790,974,720 1,987,052,273
27,648,000 27,648,000 50,400,000 50,400,000 -
33,177,600 33,177,600 60,480,000 60,480,000 -
252,748,800 93,024,000 345,772,800 48,481,558,010
303,298,560 111,628,800 414,927,360 58,177,869,612
Appendix 11: Current Grants To Government Agencies and Other Levels of Government, 2006/07 - 2008/09 (in Khs.) VOTE TITLE & NAME OF 2005/06 PARASTATAL/GOVERNMENT AGENCY Office of the President 270,000,000 National AIDS Control Council 270,000,000 Directorate of Personnel Management 34,062,004 Kenya Institute of Administration 34,062,004 OVP & Min of Home Affairs 299,178,816 National Museums Hqs. & Regional Museums 153,766,019 Institute of Primate Research 75,490,000 NGO Bureau 63,922,797 National Council for Children's Services 6,000,000 Min. of Planning & National Development 76,430,000 National Council for Population Development 76,430,000 Min. of Regional Development Authorities 403,215,476 Ewaso Ngíro South Development Authority 19,892,712 Ewaso Ngíro North Development Authority 25,066,237 Coast Development Authority 36,314,904 Tana & Athi Rivers Development Authority 127,607,532 Kerio Valley Development Authority 89,977,711 Lake Basin Development Authority 104,356,381 Min. of Agriculture 1,413,273,624 Kenya Plant Health Inspectorate Service 73,292,688 Cotton Board of Kenya 10,000,000 Pesticide Products Control Board 2,450,936 Kenya Agricultural Research Institute 1,327,530,000 Min. of Health 5,136,845,327 Kenya Medical Training Colleges 592,713,841 Kenya Medical Research Institute 852,244,451 Kenya Medical Supplies Agency 119,800,000 Moi Referral & Teaching Hospital 714,072,076 Kenyatta National Hospital 2,858,014,959 Min. of Transport 233,743,185 Kenya Ferry Services Ltd. 120,000,000 Kenya Civil Aviation Authority 113,743,185 Min. of Trade & Industry 467,630,768 Kenya Industrial Research & Development Institute 115,496,456 Kenya Industrial Property Office 43,121,360 Investment Promotion Centre 86,500,000 Export Promotion Council 82,822,824 Export Processing Zones Authority 116,528,115 Kenya Institute of Business Training 23,162,013 Min. of Justice & Constitutional Affairs 273,663,854 Kenya National Human Rights Commission 90,000,000 Kenya National Anti-Corruption Steering Committee 150,000,000 Kenya School of Law 33,663,854 Min. of Gender, Sports, Culture & Social Services 567,000,000 Kenya National Library Services 515,000,000 Sports Stadia Management Board 52,000,000 Min. of Livestock & Fisheries Development 208,519,336 Kenya Marine & Fisheries Research Institute 208,519,336 Min. of Water & Irrigation 344,970,240 Kenya Water Institute 56,946,087 Water Services Trust Fund 6,000,000 Water Services Regional Boards 42,000,000 National Irrigation Board 100,024,153 National Water Conservation & Pipeline Corporation 140,000,000 Min. of Environment & Natural Resources 742,531,865 Kenya Forestry Research Institute 436,203,250 National Environment Management Authority 273,528,615 Public Complaints Committee 17,800,000 National Environment Tribunal 15,000,000 Min. of Co-operative Development 53,751,143 Co-operative College 53,751,143 Min. of Education, Science & Technology 12,402,440,382 Kenya National Examination Council 350,000,000 Kenya Institute of Education 168,388,380 Kenya Institute of Special Education 58,142,427 Primary Teachers Training College 134,626,950 Kenya Science Teachers College 68,866,485 Kenya Technical Teachers College 93,763,006 Kagumo Teachers College 47,000,000 Commission for Higher Education 124,000,000 Public Universities Inspection Board 30,000,000 University of Nairobi 3,648,860,523 Kenyatta University 1,266,227,049 Egerton University 1,633,895,935 Jomo Kenyatta University of Agric. & Technology 892,215,272 Maseno University 905,003,205 Moi University 1,600,681,915 Western University College 354,474,970 Higher Education Loans Board 1,026,294,265 Min. of Information & Communications 90,000,000 Kenya Institute of Mass Communication 90,000,000 Min. of Tourism & Wildlife 1,037,160,000 Kenya Tourist Board 270,000,000 Kenya Utalii College 17,000,000 Bomas of Kenya 49,000,000 Kenya Wildlife Service 697,000,000 Wildlife Clubs 4,160,000 Total Grants to Govt. Agencies & Other Levels of Govt. 24,054,416,020 * The Amount Excludes KACC, KRA ,Funds going to KRB , and LATF
2006/07
2007/08
2008/09
270,000,000 270,000,000 34,062,004 34,062,004 299,178,816 153,766,019 75,490,000 63,922,797 6,000,000 76,430,000 76,430,000 403,215,476 19,892,712 25,066,237 36,314,904 127,607,532 89,977,711 104,356,381 1,413,273,624 73,292,688 10,000,000 2,450,936 1,327,530,000 5,136,845,327 592,713,841 852,244,451 119,800,000 714,072,076 2,858,014,959 233,743,185 120,000,000 113,743,185 467,630,768 115,496,456 43,121,360 86,500,000 82,822,824 116,528,115 23,162,013 273,663,854 90,000,000 150,000,000 33,663,854 567,000,000 515,000,000 52,000,000 208,519,336 208,519,336 344,970,240 56,946,087 6,000,000 42,000,000 100,024,153 140,000,000 742,531,865 436,203,250 273,528,615 17,800,000 15,000,000 53,751,143 53,751,143 10,864,035,479 350,000,000 168,388,380 58,142,427 134,626,950 68,866,485 93,763,006 47,000,000 124,000,000 30,000,000 2,675,862,503 1,266,227,049 1,476,537,203 734,167,121 655,003,205 1,600,681,915 354,474,970 1,026,294,265 90,000,000 90,000,000 1,037,160,000 270,000,000 17,000,000 49,000,000 697,000,000 4,160,000 22,516,011,117
275,400,000 275,400,000 34,743,244 34,743,244 305,162,392 156,841,339 76,999,800 65,201,253 6,120,000 77,958,600 77,958,600 411,279,785 20,290,566 25,567,561 37,041,203 130,159,682 91,777,265 106,443,509 1,441,539,096 74,758,542 10,200,000 2,499,955 1,354,080,600 5,239,582,234 604,568,118 869,289,340 122,196,000 728,353,518 2,915,175,258 233,743,185 120,000,000 113,743,185 476,983,383 117,806,385 43,983,787 88,230,000 84,479,280 118,858,677 23,625,253 279,137,131 91,800,000 153,000,000 34,337,131 578,340,000 525,300,000 53,040,000 212,689,723 212,689,723 351,869,645 58,085,009 6,120,000 42,840,000 102,024,636 142,800,000 757,382,502 444,927,315 278,999,187 18,156,000 15,300,000 54,826,166 54,826,166 11,081,316,189 357,000,000 171,756,148 59,305,276 137,319,489 70,243,815 95,638,266 47,940,000 126,480,000 30,600,000 2,729,379,753 1,291,551,590 1,506,067,947 748,850,463 668,103,269 1,632,695,553 361,564,469 1,046,820,150 91,800,000 91,800,000 1,057,903,200 275,400,000 17,340,000 49,980,000 710,940,000 4,243,200 22,961,656,475
280,908,000 280,908,000 35,611,825 35,611,825 311,265,640 159,978,166 78,539,796 66,505,278 6,242,400 79,517,772 79,517,772 419,505,381 20,696,377 26,078,912 37,782,027 132,762,876 93,612,810 108,572,379 1,470,369,878 76,253,713 10,404,000 2,549,954 1,381,162,212 5,344,373,878 616,659,480 886,675,127 124,639,920 742,920,588 2,973,478,763 233,743,185 120,000,000 113,743,185 486,523,051 120,162,513 44,863,463 89,994,600 86,168,866 121,235,851 24,097,758 284,719,874 93,636,000 156,060,000 35,023,874 589,906,800 535,806,000 54,100,800 216,943,517 216,943,517 358,907,038 59,246,709 6,242,400 43,696,800 104,065,129 145,656,000 772,530,152 453,825,861 284,579,171 18,519,120 15,606,000 55,922,689 55,922,689 11,302,942,512 364,140,000 175,191,271 60,491,381 140,065,879 71,648,691 97,551,031 48,898,800 129,009,600 31,212,000 2,783,967,348 1,317,382,622 1,536,189,306 763,827,473 681,465,334 1,665,349,464 368,795,759 1,067,756,553 93,636,000 93,636,000 1,079,061,264 280,908,000 17,686,800 50,979,600 725,158,800 4,328,064 23,416,388,457