county government of taita taveta

THE COUNTY GOVERNMENT OF TAITA TAVETA

MEDIUM TERM

2021 COUNTY FISCAL STRATEGY PAPER

FEBRUARY 2021

2021 County Fiscal Strategy Paper

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© Taita Taveta County Fiscal Strategy Paper (CFSP) 2021

To obtain copies of the document, please contact:

Taita Taveta County Treasury

P.O.Box 1066-80304, Wundanyi, KENYA.

Tel: 0788 186 436/0718 988 717

The document is also available on the County Government website: www.taitataveta.go.ke

http://www.taitataveta.go.ke/


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FOREWORD

The 2021 County Fiscal Strategy Paper (CFSP) is prepared in accordance with the

provisions of the Public Financial Management Act, 2012 cap 117 which requires the

county treasury to prepare this paper for each financial year.

In line with the provisions of the law, the 2021 CFSP presents the fiscal objectives for the FY

2021 and medium term. It further highlights the broad strategic priorities and policy goals

that will guide the County government in preparing its budget for FY 2021/2022 and the

medium term.

The County countinued to perform significantly well in terms of its fiscal parameters,

despite the ravaging effects of the COVID-19 global pandemic. During the first half FY

2020-2021 the County has posted an increment of 132% in terms of Own Source Revenue

generated during the same period in the last financial year.

The County government realized some key milestones through the implementation of priority

flagship projects. This include: Completion and equipping of Moi County Referral Hospital

Cancer Centre ; Construction of a 160 bed capacity Mwatate Isolation Centre at Mwatate Sub

County Hospital; Completion of Nyangoro Water Project in Mwatate Sub County that is

jointly funded by the County Government and the European Union (EU); Completion of

Kimwa Water Project in Voi Sub County that is jointly funded by the County Government

and the National Disaster Management Authority(NDMA); Construction and equipping of

Voi County Fire Station; Construction of a New Modern Mwatate Market; On going

construction of Dawson Mwanyumba Stadium in Taita Sub County; On- going construction

of Moi Stadium in Voi Sub County; Construction of Ngerenyi High Altitude Training Centre

in Mwatate Sub County and a Banana processing plant in Taveta sub-county.

In the FY 2021/2022 and the medium term, the County will endeavor to implement projects

and programmes in line with the Vision 2030 and its medium term Plan III, the CIDP 2018-

2022, HE the Governor’s manifesto and feedback from the Public as highlighted in the 2020

Annual Development Plan and the 2021 CFSP. The priorities highlighted in this paper

include:

⚫ Improving access to clean and potable water for both urban and rural areas

⚫ Increasing agricultural and livestock productivity for food security and wealth

creation;

⚫ Improving access to quality and affordable social services-including quality

Health care and education

⚫ Reduction in the cost of doing business and attracting investments through

development of key infrastructure including roads network and energy.

⚫ Social-economic empowerment of the youth, Women and PWDs through

employment creation and ease of access to credit


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This strategic paper is divided into 4 chapters:

Chapter 1 gives the general overview and rationale for preparation of this document. It

also highlights the major achievements made and challenges faced by the county

government. The chapter outlines the fiscal performance of the county in-terms of

revenue generation and expenditure analysis.

Chapter 2 outlines the economic context in which the 2021/2022 MTEF budget will be

prepared. It provides an overview of the recent economic development and macro-

economic outlook. It further provides a basis for the projections of revenue and

expenditure for FY 2021/2022 and the medium term.

Chapter 3 outlines the fiscal framework under which the 2021/2022 budget will be

based. It briefly highlights the county’s resource envelop for FY 2021/2022 and further

presents the spending priorities for the next budget.

Chapter 4 finally presents the sectors and departmental spending ceilings for 2021/2022

budget and the medium term.

Hon Andrew Kubo Mlawasi

COUNTY EXECUTIVE COMMITTEE MEMBER-FINANCE AND PLANNING.


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ACKNOWLEDGEMENTS

The 2021 Taita Taveta County Fiscal Strategy Paper is prepared pursuant to the provisions

of the Public Finance Management Act, 2012 Section 117 (1) which stipulates that the

County Treasury should each year prepare and submit to the County Executive Committee

the County Fiscal Strategy Paper for approval. The County Treasury shall further submit

the approved County Fiscal Strategy Paper to the County Assembly, by 28th February each

year.

The preparation of this paper was highly consultative as well as capturing the views and

input from various stakeholders as required by law. We are particularly grateful to His

Excellency the Governor for his lead role, direction and guidance in developing this

document; County Executive Committee Members led by Andrew Kubo Mlawasi- CECM-

Finance and Economic Planning and Matthew Njoroge- Economic Advisor are highly

appreciated for providing leadership during the public consultative forums.

Special gratitude goes to all Chief Officers for their input in providing the much-needed

information participating adequately in the public consultative meetings. The role played

by the County Budget and Economic Forum (CBEF)Non-State Actors is also equally

appreciated.

Special gratitude is extended to members of the technical secretariat whose contribution

in this paper is immense. These include; Benjamin Odago-Planning and Budgeting,

Babisho Abalon, Prudence Mghoi, Nathan Mkaya, Paul Mwamvula and other Budget and

Planning staff.

We remain grateful to all Sub-county and Ward Administrators for coordinating and

moderating the public consultative forums at ward levels.

Lastly is to express appreciation to Civil Society organizations, Local leaders, the general

public and all other stakeholders who took their time to participate in providing vital

information in the various meetings.

CPA Joyce Mwachia

Ag. County Chief Officer, Finance and Economic Planning


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Table of Contents

FOREWORD .................................................................................................................................... ii

ACKNOWLEDGEMENTS .................................................................................................................. iv

LEGAL BASIS FOR THE PUBLICATION OF THE COUNTY FISCAL STRATEGY PAPER ............................ 7

FISCAL RESPONSIBILITY PRINCIPLES IN THE PUBLIC FINANCE MANAGEMENT LAW ........................ 8

CHAPTER ONE: ACCELERATED SOCIO -ECONOMIC DEVELOPMENT FOR THE COUNTY’S PROSPERITY .. 9

Overview ................................................................................................................................................ 9

Objectives of the 2021 County Fiscal Strategy Paper ............................................................................ 9

County’s Progress Report..................................................................................................................... 11

Revenue Analysis ................................................................................................................................. 19

Expenditure ...................................................................................................................................... 24

CHAPTER TWO: RECENT NATIONAL ECONOMIC DEVELOPMENT AND POLICY OUTLOOK ........... 28

Global and Regional Economic Developments .................................................................................... 28

National Economic Developments and Outlook ................................................................................... 28

National economic development pillars in the Medium Term Plan III .............................................. 30

Risks to the Economic Outlook ............................................................................................................ 30

CHAPTER THREE:FISCAL FRAMEWORK AND COUNTY STRATEGIC PRIORITIES FOR 2021/22-2022/23 AND THE MEDIUM TERM......................................................................................................................32

2021/22 FISCAL FRAMEWORK AND POLICY......................................................................................... 32

Fiscal Policy .......................................................................................................................................... 32

Revenue side .................................................................................................................................... 32

Expenditure side .............................................................................................................................. 32

2021/2022-2023/2024 Medium Term Revenue Projections .............................................................. 33

2021/2022 Expenditure Projections ................................................................................................... 33

CHAPTER FOUR: MEDIUM TERM EXPENDITURE ESTIMATES AND DEPARTMENTAL CEILINGS ........... 35

Details of Sectoral and Departmental Priorities and Baseline Ceilings ............................................... 35

Annex 1: 2021/2022 Recurrent Budget Ceilings ............................................................................. 41

Annex 2 : Departmental Development ceilings ................................................................................. 42

Annex 3: Consolidated 2021 CFSP Public Proposals ......................................................................... 45


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LIST OF ACRONYMS AND ABREVIATIONS

AiA Appropriation in Aid

BPS Budget Policy Statement

CA County Assembly

CADP County Annual Development Plan

CBROP County Budget Review and Outlook Paper

CFSP County Fiscal Strategy Paper

CPI Consumer Price Index

COVID-19 Corona Virus disease

CPSB County Public Service Board

EU European Union

FNS Food and Nutrition Security

FY Financial Year

GDP Gross Domestic Product

KNBS Kenya National Bureau of Statistics

KPA Kenya Ports Authority

KRA Kenya Revenue Authority

Kshs Kenya Shillings

MTEF Medium Term Expenditure Framework

MTP Medium-Term Plan

OSR Own-Source Revenue

PFMA Public Financial Management Act

PPP Public Private Partnership

SBP Single Business Permit

SGR Standard Gauge Railway

SWG Sector Working Groups


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LEGAL BASIS FOR THE PUBLICATION OF THE COUNTY FISCAL STRATEGY PAPER The County Fiscal Strategy Paper is prepared in accordance with section 117 of The Public Finance Management Act, 2012 which stipulates that:

1. The County Treasury shall prepare and submit to the County Executive Committee the

County Fiscal Strategy Paper for approval.

2. The County Treasury shall submit the approved County Fiscal Strategy Paper to the county

Assembly by the 28th February in each year.

3. The County Treasury shall align its County Fiscal Strategy Paper with the national

objectives in the Budget Policy Statement.

4. In preparing the County Fiscal Paper, the County Treasury shall specify the broad strategic

priorities and policy goals that will guide the county government in preparing its budget

for the coming financial year and over the medium term.

5. The County Treasury shall include in its County Fiscal Strategy Paper the financial outlook

with respect to county government revenues, expenditures and borrowing for the coming

financial year and over the medium term.

6. In preparing the County Fiscal Strategy Paper, the County Treasury shall seek and take into

account the views of:-

i. The Commission on Revenue Allocation

ii. The public

iii. Any interested persons or groups; and

iv. Any other forum that is established by legislation

7. Not later than fourteen days after submitting the County Fiscal Strategy Paper to the

County Assembly, the County Assembly shall consider and may adopt it with or without

amendments.

8. The County Treasury shall publish and publicize the County Fiscal Strategy Paper within

seven days after it has been adopted by the county assembly.

FISCAL RESPONSIBILITY PRINCIPLES IN THE PUBLIC FINANCE MANAGEMENT LAW The Public Finance Management (PFM) Act, 2012 sets out the following fiscal responsibility principles to ensure prudency ant transparency in the management of public resources;

1. The county governments’ recurrent expenditures shall not exceed 70% of the total

revenue.

2. Over the medium term, a minimum of thirty percent of the county government

budget shall be allocated to development expenditures.

3. The county governments’ expenditures on wages and benefits for its public officers

shall not exceed a percentage of the county governments’ total revenue as prescribed

by the executive member for finance in regulations and approved by county

assembly.

4. Over the medium-term the government borrowing shall be used only for the purpose

of financing development expenditures and not recurrent expenditure

5. The county debt shall be maintained at sustainable levels as approved by county

assembly

6. The fiscal risks shall be maintained prudently; and

7. A reasonable degree of predictability with respect to the level of tax rates and tax

bases shall be maintained taking into account any reforms that may made in the

future.

CHAPTER ONE: ACCELERATED SOCIO -ECONOMIC DEVELOPMENT FOR THE

COUNTY’S PROSPERITY

Overview

This 2021 County Fiscal Strategy Paper (CFSP) is prepared in accordance with the provisions

of the Public Financial Management Act, 2012 cap 117 which requires the county treasury

to prepare this paper for each financial year.

In line with the provisions of the law, the 2021 CFSP presents the fiscal objectives for the FY

2021 and medium term. It further highlights the broad strategic priorities and policy goals

that will guide the County government in preparing its budget for FY 2021/2022 and the

medium term.

The paper discusses the fiscal performance of the first half(July-December) of FY

2020/2021 budget, which forms the basis for projecting the financial outlook with respect

to the County Government’s revenues and expenditures for FY 2021/2022 and the Medium

Term. It highlights of the recent economic developments and economic outlook; broad

strategic priorities and policies for FY 2021/2022 as indicated in the 2020 County Annual

Development Plan(CADP) and the Medium Term Fiscal Framework as outlined in the

County Integrated Development Plan (CIDP) 2018-2022.

This fiscal strategy paper articulates economic policies and fiscal reforms as well as sector-

based expenditure programmes that the county intends to implement in order to achieve its

broad development agenda. The proposed fiscal framework ensures continued fiscal

discipline and provides support for sustained growth, broad based development and

employment growth that benefits all Datuzens.

With limited resources, the County government will embrace efficiency in resource

utilization to make meaningful gains in poverty reduction. The fiscal framework outlined in

this Fiscal Strategy Paper (FSP) requires greater fiscal discipline and alignment of resources

to priorities. In particular, better control of expenditure and a clear focus on core mandates

by county departments will be required.

Objectives of the 2021 County Fiscal Strategy Paper The objective of the 2021 County Fiscal Strategy Paper is to set the framework for the

preparation of the FY 2021/22 County budget. It is a requirement under section 117 of the

Public Finance Management Act, 2012 that each County Treasury shall prepare and submit

to the County Executive Committee the Fiscal Strategy Paper for approval, and the County

Treasury shall submit the approved Fiscal Strategy Paper to the County Assembly by the 28th

February, 2021. This Fiscal Strategy Paper contains the following:

a. The principles that will guide the FY 2021/22 budgetary process;

b. The broad fiscal parameters for the 2021/22 budget and the key strategies and

policies for management of revenues and expenditures;

c. The broad strategic priorities and policy goals that will guide the preparation of

the budget over the medium term;

d. A discussion of risks to the budget parameters;

e. The medium–term outlook for county government’s revenues and expenditures;

f. A discussion of how the Budget Strategies relates to the County priorities as

outlined in the County Integrated Development Plan (CIDP)2018-2022

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County’s Progress Report

The County Government has endeavored on delivering on our promise in line with

our County Integrated Development Plan 2018-2022 (CIDP), Annual Development

Plan 2020/2021 as we mirror on the National Governments Big Four Agenda, and

Sustainable Development Goals(SDGs).

The Government has continued to implement its accelerated transformative agenda. The boad priority areas pursued in previous FYs and current FY 2020/2021 and the medium term include:

1. Increasing access to clean, quality, affordable and potable water for all households, schools and health facilities. (WATER)

2. Improved Food and Nutrition Security and community resilience through provision of adequate water for irrigation, livestock and wildlife throughout the County. (FOOD SECURITY)

3. Improved household income and livelihood though value addition, marketing and establishment of fruits, tomatoes, beef and dairy processing plants. (INCOME)

4. Investing sufficiently in quality, accessible and affordable health care services including provision of prerequisite equipment, drugs and health personnel. (HEALTH)

5. Ensuring quality education through development of ECDE and Library services, equipping of schools and enhanced bursaries allocation (EDUCATION)

6. Provision of quality infrastructure including improved roads network, ICT, quality housing, Land management and adoption of alternative sources of energy. (INFRASTRUCTURE)

7. Empowerment of Youth, women, and vulnerable members of the community through establishment of small scale cooperatives, talents identification and nurturing and improved access to cheap and affordable credit. (COMMUNITY EMPOWEREMENT)

The County Government has been able to deliver on 10 flagship projects geared

towards improving the living standards of the great people of Taita Taveta County.

a) Completion and equipping of Moi County Referral Hospital Cancer

Centre

b) Near completion of a 160 bed capacity Mwatate Isolation Centre at

Mwatate Sub County Hospital

c) Completion of Nyangoro Water Project in Mwatate Sub County that is

jointly funded by the County Government and the European Union (EU)

d) Completion of Kimwa Water Project in Voi Sub County that is jointly

funded by the County Government and the National Disaster

Management Authority(NDMA).

e) Near Completion and equipping of Voi County Fire Station

f) Construction of a New Modern Mwatate Market

g) On going construction of Dawson Mwanyumba Stadium in Taita Sub

County

h) On- going construction of Moi Stadium in Voi Sub County

i) Ngerenyi High Altitude Training Centre in Mwatate Sub County

j) Banana processing plant in Taveta sub-county.

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Priority Area I: Increasing access to clean, quality, affordable and potable water for all

households, schools and health facilities. (WATER)

In the past one year, the Government has implemented several water sector priorities which include among others:

a) Pipeline extensions & rehabilitation b) Protection and conservation of surface sources c) Abstraction of underground water d) Flood control e) Rain, storm and surface water harvesting for livestock and other domestic uses.

In the current financial year 2020/2021 the department has implemented several

projects namely; Iyombonyi Mwaroko shallow well, Rekeke booster station water

project, Ndili Dau Solar Pump Installation, Construction of Mwabolo water intake and

replacement of pipes, Kiziki water project in Wundanyi-Mbale Ward, Rong’e Nyika

Water project, Mwangaza, Vipalo Mferejini, Iriwa Ja Punda, Mwakimori, Josa

Modambogho, Mdandale, Mwakingali B water projects that have cumulatively

benefited an additional 13,000 households.

The County is a beneficiary of World Bank funded water project at a tune of Ksh 2.5

Billion meant for water supply and sanitation. The fiveyear water project when

complete will improve water supply and sanitation, infrastructure and strengthen the

institutional capacity of TAVEVO Water and Sewerage Company. This project will also

improved billing and revenue collection systems, and developing medium-term

business plans.

Over 100,000 residents residing in the three urban centers of Mwatate, Voi and

Wundanyi will benefit from a much more regular supply of water, improved

wastewater and septic sludge collection and treatment services. Through this funding

my Government has procured the following; 10540 cold water consumer meters, two

Water Bowsers and two Sewerage Exhausters.

Priority Area II: Improved Food and Nutrition Security and community resilience

through provision of adequate water for irrigation, livestock and wildlife throughout

the County. (FOOD SECURITY)

Taita Taveta is mainly an agricultural county with 80% of the population relying on this sector which contributes to 38% of the County’s GDP. The sectors broad objective is to improve food and nutrition security value chain development while taking into account adoption of technologies. The sectors priority over the medium term have been:

a) Crop development b) Soil and water management, c) Promotion of agribusiness, d) Enhanced extension support services, e) Market development, f) Mechanization of agriculture, g) Irrigation infrastructure development

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Despite the COVID-19 pandemic that restricted movement of goods and services across the Counties, the sector registered commendable milestones.

a) 6,200 farmers out of the targeted 11,000 farmers benefited from 21.6 tons of sorghum and 12.6 tonnes of green grams under the Accelerated value Chain development project.

b) In terms of market development, farmers have been linked with East African Breweries and Eastern African Grain Council who shall purchase their produce

c) 100,000 cuttings of improved cassava and 80,000 sweet potato vines were distributed to a total of 1,800 farmers, with additional 775 farmers also benefiting from 3.1 tons of pigeon peas for the lower agricultural zones in our County.

d) Near completion of a banana processing plant in Taveta sub-county will add value to the already available product, besides providing 38,930 direct and indirect job opportunities for our people.

e) 30,000 tissue culture bananas were distributed to 3000 farmers in Taveta and other banana growing areas in the County.

f) Measures are in-place to increase acreage under banana production from 2080 hectares to 4080 hectares and at the same time improve production of the banana crop from the current 125,000 to 246,000 tons annually. Procured 15000 macadamia seedlings and over 1500 avocado seedlings that were distributed to 540 farmers across the County.

g) The County Government in collaboration with Agriculture and Food Authority, through Oil and Nuts Directorate, supplied over 40,000 coconut and 30,000 Cashew nut seedlings to more than 2000 farmers.

h) Distribution of organic and inorganic fertilizers to over 140 farmers i) The setting up of satellite fertilizer depot at Timbila in Taveta Sub-County j) In collaboration with Kenya Climate Smart Project(KCSAP), distributed eight

hand drawn tractors to farmers in Common Interest Groups(CIGs) k) Construction of Ufunguo Water Pan in Kasigau Ward, Voi Sub County with a

capacity of 30,000 cubic meters, Mukuru Dam in Wumingu Kishushe ward, Taita Sub County with a capacity of 120,000 cubic meters and rehabilitation of 12 kilometer Njoro Kubwa Canal.

l) Constructed and installed four milk cooling plants with a 3,000 liter holding capacity to facilitate milk aggregation.

m) To increase beef production, distribution of quality breeding stock at the Bachuma livestock breeding and multiplication centre has seen a total of 500 livestock breeds of various categories distributed to farmers.

n) The rehabilitation of slaughter houses in Werugha, Mgange , Bura, Ndara and the construction of modern slaughter house in Mwatate and Rukanga

o) Implementation of the Artificial Insemination Program where over 6,193 inseminations have been carried out benefiting over 4,954 small scale holder dairy farmers and approximately 2,824 calves calved.

p) Excavation of 83 fish ponds out of which 71 equipped with fingerlings. q) In collaboration with the Kenya Marine and Fisheries Research Institute

instituted a study to enhance development of the blue economy in Lake Chala and Lake Jipe.

r) Installed cages in Lake Chala

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Priority Area III: Improved household income and livelihood though value addition,

marketing and establishment of fruits, tomatoes, beef and dairy processing plants.

(INCOME)

In collaboration with the Export Processing Zone Authority (EPZA), deliberations on

the setting up an export processing zone is on course, with the Government having

identified land in Voi -Sub County where a proposed Export Processing Zone is to be

set up.

The Government has constructed and ensured full operation of Kese Market in

Werugha Ward with 3 other markets(Maungu, Kasighau and Kishushe) nearing

completion.

To economically empower women engaged in weaving, the County Government has

designated market place whereby every first Saturday of the month, weavers have

have an opportunity to display and sell their handcrafts products.

Priority Area IV: Investing sufficiently in quality, accessible and affordable health care

services including provision of prerequisite equipment, drugs and health personnel.

(HEALTH)

During the financial year 2019/2020, the Government made a deliberate undertaking

of allocating the Health Services Department enough resources to cater for the

equipping of all our Sub County hospitals and medical centers with pharmaceuticals

and non-pharmaceuticals.

The Government further implemented the following : a) Refurbished several health facilities the Wesu Sub County Rehabilitation

Centre Building, b) Equipped and commissioned Makandenyi Maternity Block, c) Refurbished the Mahandakini dispensary blocks. d) In collaboration with Fred Hollows foundations has set up a functional eye

center at Moi County Referral Hospital. e) In collaboration with the First Ladies Association set up the first ever oncology

centre at the Moi County Referral Hospital. f) Operationalized a clinic within the cancer centre to deal with sickle cell and

Hemophilia operational. g) Commenced process of setting up an oxygen generating plant, to serve to all

medical facilities within the County and beyond. h) Fully operationalised the renal unit at Moi County Referral Hospital in Voi

currently serving patients across the County and neighboring Counties. i) Near completion of another renal unit in Taveta Sub County Hospital. j) Enhanced allocation of Ksh. 250 Millon towards the purchase of

pharmaceuticals and non-pharmaceuticals in the financial year 2019/2020, ensured adequate and timely availability of drugs and non-pharms across the county

k) Complete renovation of an X-ray block at Wesu Sub County Hospital l) Face lifting of the building structures at the Moi County Referral Hospital m) Renovation of Taveta Sub-County Hospitals Maternity Block.

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Priority Area V: Ensuring quality education through development of ECDE and Library services, equipping of schools and enhanced bursaries allocation (EDUCATION)

In the current financial year, the Government has:

a) Equipped several Vocational Training Centers across the county. b) Renovated Tausa, Ghazi, Mwanda, Mwanjila and Mwarungu VTCs among

others. c) Provided Ksh 37.5 Million as grants disbursed to 24 registered Vocational

Training Centers benefiting 3150 trainees. d) The inauguration of a new Education Fund Board, appointment of the Sectary

to the Board and the revision of the Taita Taveta Education Board Act has seen a more robust and service oriented entity.

e) Increased allocation to the Education Fund board down from 50 Million to 150 Million registering a 200% increment that has benefited 21,023 needy students.

f) The introduction of post-graduate loans aimed at advancing career progression has seen the disbursement of Ksh 21 Million to 831 Undergraduate, Diploma and Certificate holders.

Priority Area VI: Provision of quality infrastructure including improved roads network, ICT, quality housing, Land management and adoption of alternative sources of energy. (INFRASTRUCTURE)

Public Works and Infrastructure

In FY 2018/2019, the Government formed and upgraded access roads to gravel standards, rehabilitated and maintained over 300kms of road network across the County. In 2019/2020, a total of 568 kilometers of roads were graded with 28.25 kilometers graveled through the use of our very own plant and machinery. 140 kilometers of road network was undertaken through roads maintenance fuel levy funds.

In FY 2020/2021 the County Government has/will: a) Completed ten (10) new roads have been completed b) 91 roads are ongoing while 32 are at final stage of tendering process. c) By the end of the current FY, have graded an additional 453.73 Kms, installed

slabs and drifts totaling 1.7Kms, installed Meter drains, Culverts, 5 footbridges, formed and expanded 36.6 Kilometers and installed 234 Gabions.

Lands, Mining and Energy

Some of the notable achievements in this sector include:

a) Near completion of the County valuation roll which is at 90% completion. This will not only inform key decision making but it shall also aid in increasing revenue collection through land rates and rents.

b) The County Public utility database is now 100% complete. The database will help in informing the Government about the status of all the public assets within the County.

c) The Government has not only re-engineered the urban management processes by creating systematic and institutional structures but, also

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established County Land Administration Committee that is responsible for regulating and fast tracking the process of application for market plot transfers.

d) The Government has conducted several meetings in Mwatate, Chawia, Alia, Wusi Kishamba and Saghala sensitising the people on the Community land Act 2016 aimed at laying the ground for the registration of their community lands.

e) The Government conducted the first ever County Gem expo on 23rd February, 2019 in Voi which elevated the County profile as a gemstone destination.

f) Enacted legislation on sand harvesting that has effectively banned unlicensed sand harvesting through development of Sand Harvesting and Conservation Amendment Act 2016.

g) In collaboration with Energy For Impact(E4I) installed solar systems in 12 schools and 14 health facilities across the county

Priority Area VII: Empowerment of Youth, women, and vulnerable members of the community through establishment of small scale cooperatives, talents identification and nurturing and improved access to cheap and affordable credit. (COMMUNITY EMPOWEREMENT)

To foster social cohesion, the Government has built Bondeni, Kaloleni, Birikani Social

Halls in Kaloleni Ward, Kiwalwa Social Hall in Mboghoni Ward and Mlangonyi and

Mbulia Social Halls in Ngolia Ward, Peleleza Social Hall in Mwatate Ward among

others.

The on going upgrading of the Dawson Mwanyumba in Taita Sub-County into a

National stadium will continue creating opportunities in for the County. The grounds

is currently hosting premier and super league tournaments.

Transforming the Moi stadium in Voi, into an ultra modern playing ground is still on

course. The stadium design encompasses the setting up stalls running along the

perimeter wall; once complete these stalls will see an increase of own source revenue

create employment opportunities and the expansion of the Voi Central Business

District.

To attract investment and nurture athletics in our County, construction works at the

High altitude training center in Ngerenyi in Wusi/Kishamba ward at a cost of Ksh

13.5 Million is nearing completion.

In the FY 2020/2021 the department has already: a) Held Governor’s Cup 2020 and “006 Talanta” Festivals 2020. b) Rolled out an empowerment program targeting more than seventy groups

drawn from the four Sub Counties. The financial assistance shall now see the youth, women and persons living with disabilities engage in meaningful business ventures.

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Priority Area VIII: Public Administration and Inter-governmental relations

Devolution, Public Service and Administration

During the 3rd Annual Capacity Performance Assessment for Financial Year 2019-2020, the performance of County Government was documented to have improved from 58% to 72% signaling the confidence our people have in the services we offer to them. Some of the notable achievement include:

a) With the technical assistance from the Directorate of Public Service Management Consultancy Services, under the State Department for Public Service, the Government has managed to put in place an elaborate Organizational and Staff Establishment Structure.

b) The County Government recruited, employed and deployed Principal Administrative officers and Ward Administration officers across all our four sub-counties and twenty wards.

c) The Government placed all county staff and their dependents on a comprehensive medical cover under the NHIF scheme.

d) Training of new staff e) The department has coordinated all public participation exercises

especially for the budget documents f) The department has developed the Public Participation Bill and Devolved

Units Bill that are due for stakeholders’ consideration.

Finance & Economic Planning

The outbreak of the Covid- 19 pandemic paralyzed almost all sources of Own Source Revenue for the county which, was largely attributed to restrictions of movement and the Ministry of health protocols. Despite this setback, County government was able to exceed its own source revenue target by 119.8% for FY 2019-2020. The Covid-19 pandemic has persisted into the FY 2020-2021 and its adverse effects are now being fully felt within the County as most businesses have either completely shut down or are operating below 50% of their capacity. Some of the achievements by the department include:

a) Pending Bills: In the financial year 2019/2020, the County Government had an accrued eligible pending bill of Ksh. 652.8 Million out of which Ksh. 436 Million was paid to various suppliers leaving un-paid balance of Ksh 216.7 Million as at 30th June, 2020. In the FY 2020-2021, the department set aside Kshs 150 Million for pending bills out of which Kshs 90 Million has been settled in the first half of the FY

b) During the first half FY 2020-2021 the County has posted an increment of 132% in terms of Own Source Revenue generated during the same period in the last financial year.

c) To enhance revenue collection, seal loopholes and safeguard the County against pilferage, the Government has recruited an additional sixty revenue collectors.

d) Purchased additional motor vehicles and motorcycles for the directorate of revenue .

e) Successfully engaged members of the public during the preparation of all budget documents in line with the provisions of the law.

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f) Moved the Directorate of Inspectorate, Enforcement and Compliance from Devolution, Public Service and Administration Department to Finance and Economic Planning docket.

g) Recruitment of a total of 40 enforcement officers, and established a fully-fledged 24-hour unit.

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County’s Fiscal Performance

Revenue Analysis

The County Government has two major sources of revenue to fund its operations;

equitable share from National government and Own source revenue. In the FY

2020/2021, the County has a projected a total revenue of KShs 5.8 Billion consisting

of KShs 363 Million as own source revenue and KShs 4.2 Billion from Equitable share.

Further the County expects, Kshs 1.05 Billion as transfers from government entities

and conditional grants.

Figure 1: Summary of Revenue Sources for FY 2020/21

Out of the projected revenue, the County was able to realize KShs 2.2 Billion in actual

revenues, representing 39% performance. This performance was as a result of 41%

realization of the County Allocation through Exchequer, 28% on own Source

revenues, 20% Transfers from other government entities and 0% was actualized from

Donors and Development Partners.

Table 1 : Performance of Revenues in the 1st half of FY 2020/2021

Revenue Classification Revenue Budget (Ksh) Actual (Ksh) Realization (%)

Exchequer releases 5,256,450,522 2,130,315,397 41%

Proceeds from Domestic and Foreign Grants - - 0%

Transfers from Other Government Entities 161,219,001 32,780,598 20%

County Own Generated Receipts 363,000,000 100,539,000 28%

Returned CRF issues - 57,486 0%

Total 5,780,669,523 2,263,692,481 39%

2020


Exchequer releases per quarter

In the first quarter of FY 2020/21, the county received a disbursement of Kshs 364

Million which was a late disbursement brought forward from the FY 2019/2020. The

exchequer releases varied significantly from one quarter to another. The second

quarter saw a disbursement of Kshs 1.7 Billion compared to Kshs 364 Million in the

first quarter

EQUITABLE SHARE (EXCHQUER RELEASES) 2020-2021 2019 - 2020

Total Exchequer Releases for quarter 1 364,734,600 737,951,400

Total Exchequer Releases for quarter 2 1,765,580,797 763,398,000

Total Exchequer Releases for quarter 3 - 1,208,713,500

Total Exchequer Releases for quarter 4 - 1,541,499,815

Cumulative Amount 2,130,315,397 4,251,562,715

Donor funds released through the Exchequer

During the period under review, a total of Kshs 366 Million was disbursed as

conditional grants from donors. This was realized in the second quarter comprising of

Kshs 6 Million DANIDA funded Universal Healthcare, Kshs 120.5 Million for World

Bank funded KCSAP and Kshs 239 Million for World Bank funded WSDP.

Description Q1 Q2 Cumulative Amount Comparative Amount 2020

DANIDA - Universal Healthcare in Devolved Units Programme

- 6,030,000.00 6,030,000.00 16,608,750

World Bank – THUSCP - - - 56,942,903

Kenya Devolution Support Programme

- - - 30,000,000

Youth Polytechnic support grant - - - 55,638,298

Abolishment of user fees in health centres and dispensaries

- - - 5,296,305

Kenya Urban Support Programme(UDG)

- - - 35,761,940

Kenya Urban Support Programme(UIG)

- - - 8,800,000

Agriculture Sector Development Support Project (ASDSP)

- - - 16,633,655

Kenya Climate Smart Agriculture Project (KCSAP)

- 120,546,484.65 120,546,484.65 104,500,024

Water and Sanitation Development Project (WSDP)

- 239,441,312.45 239,441,312.45 45,015,440

Total - 366,017,797.10 366,017,797.10 375,197,315

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Transfers from National Government Ministries and Agencies

The County received Kshs 32.7 Million for Roads Maintenance and Fuel Levy fund

against the budgeted amount of kshs 161 Million for FY 2020/21

Description Q1 Q2 Cumulative

Amount

Comparative

Amount 2020

Transfer from Ministry of Health

COVID-19 Emergency Response - - - 37,704,000

National Government Grant - Health Professionals Allowances

- - - 34,575,000

NHIF Funds - - - 51,695,530

Transfer from other Ministries - -

Road Maintenance Fuel Levy Fund(RMFLF) - 32,780,598 32,780,598 147,048,631

TOTAL - 32,780,598 32,780,598 271,023,161

Own Source Revenue Analysis

The total amount of revenue generated locally during the 1st half of FY 2020/21 was Kshs137 Million marking a 32% increment from Kshs 104 Million reported in FY 2019/20 same period. Like in the preceding financial years, own source revenue continued to perform below the target. Table 2 : Comparative first half Own Source Revenue Performance

TOTAL 2018-2019 2019-2020 2020-2021

Budgeted 150,007,792 160,000,000 181,500,000

Actual 132,877,353 104,216,882 137,179,032

Variance (17,130,439) (55,783,118) (44,320,968)

The performance in the 1st quarter of the FY 2020/21 was exceptional since the target was surpassed as indicated in the figure below. Figure 2 : Comparative Quarterly performance for FY 2020/21

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Figure 3: Comparative 1st Half performance

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec

2018-19

2019-20

2020-21

Leading Sources of Revenue In the period under review, Hospitals continued to lead in terms of revenue generation at Kshs 24 Million having gradually increased from Kshs 19 Million in FY 2019/20 and Kshs 13 Million in FY 2018/19. Exploitation of natural resources(Blocks) and sand Cess also registered significant improvement compared to the previous Financial years at Kshs 17 Million and Kshs 17.8 Million respectively. Table 3: Leading Sources of Revenue

1ST QUARTER 2ND QUARTER

REVENUE TYPE DEPARTMENT 2018-2019 2019-2020 2020-2021 2018-2019 2019-2020 2020-2021

HEALTH-HOSPITALS HEALTH 6,891,087 9,971,536 13,657,563 6,911,345 10,203,910 10,539,251

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NATURAL RESOURCES EXPLOITATION e.g. Blocks

ENVIRONMENT 602,990 1,694,380 8,793,610 759,749 1,618,200 8,318,990

SAND CESS ENVIRONMENT 1,594,410 2,049,870 8,974,750 1,195,570 2,949,610 8,936,065

MARKET FEES TRADE 9,803,791 11,913,595 2,953,000 9,415,757 12,978,505 7,282,110

VEHICLE PARKING FEE PUBLIC WORKS 4,100,431 7,975,510 5,364,930 4,223,344 9,155,024 4,840,608

AGRICULTURAL CESS FINANCE 1,811,902 1,580,000 5,003,610 2,609,139 2,851,382 4,577,377

GROUND RENT LANDS 1,436,613 2,095,094 3,504,903 979,998 1,447,196 5,045,560

SINGLE BUSINESS PERMITS FINANCE 3,614,933 2,704,840 2,199,950 2,142,512 932,031 1,944,840

LAND RATES LANDS 2,027,455 1,136,045 2,175,717 2,199,394 772,598 1,747,262

PUBLIC HEALTH HEALTH 1,738,940 2,108,830 1,692,650 862,400 1,231,850 2,113,100

Market fees on the other hand recorded significant decline from Kshs 24.8 Million in FY 2019/20 to Kshs 9.1 Million. This drop is attributed to the effects of the containment measures on the spread of COVID-19 where all markets were closed and movement restricted, consequently limiting revenue generation. The containment measures also affected other revenue streams such as Vehicle parking fee from Kshs 16 Million in FY 2019/20 to Kshs 10.1Million in FY 2020/21. Revenue performance per sub-county Voi sub-county continues to lead in terms of revenue collection accounting for 46% of the total OSR in the 1st half of FY 2020/21. Taveta sub county followed closely at 31% while Wundanyi accounted for only 7% of the total revenue as outlined in the figure below. Figure: Revenue performance per sub-county

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Expenditure

During the period under review, total expenditure stands at Kshs 1.9 Billion out of the Kshs 2.26 Billion received representing 85% total budget absorption rate. Kshs 917 Million was used for compensation of employees, Kshs 224 Million for operations and maintenance and Kshs 150 Million for acquisition of assets. Table : Total expenditure by Economic classification

Sep Dec Total Comparative

1st Quarter 2nd Quarter 2020-21 Period 2020

PAYMENTS

Compensation of Employees 216,486,228 701,394,745 917,880,972 2,131,653,372

Use of goods and services 80,344,219 144,517,805 224,862,024 866,848,734

Transfers to Other Government Units 112,800,293 506,366,310 619,166,603 774,121,270

Other grants and transfers - 4,758,000 4,758,000 135,673,419

Social Security Benefits - - - 5,604,912

Acquisition of Assets 19,547,522 40,644,179 60,191,701 379,742,887

Finance Costs, including Loan Interest - - - 343,859

Other Payments 15,946,793 74,394,116 90,340,908 436,124,856

TOTAL PAYMENTS 445,125,054 1,472,075,154 1,917,200,208 4,730,113,309

Figure : Total expenditure by economic classification

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Use of goods and services

A total of Kshs 224 Million was used on operations and maintenance out of which 21% was spent on domestic travel and subsistence. 16% of the total use of goods and services was spent on fuel, oil and lubricants. Specialized materials and services and utilities accounted for 15% and 13% respectively.

Table: expenditure on use of goods per item

USE OF GOODS AND SERVICES Q1 Q2 Cumulative

Amount % Sha

re Comparative

Amount 2020

Utilities, supplies and services 12,592,752 17,281,654 29,874,406 13 43,182,035

Communication, supplies and services

4,950,000 306,000 5,256,000 2 10,294,498

Domestic travel and subsistence 18,714,999 27,965,462 46,680,461 21 221,070,159

Foreign travel and subsistence - - - 4,376,110

Printing, advertising and information supplies & services

1,945,000 576,625 2,521,625 1 19,680,893

Rentals of produced assets - 1,720,000 1,720,000 1 27,992,640

Training expenses - 2,085,560 2,085,560 1 23,501,170

Hospitality supplies and services 9,584,640 4,221,460 13,806,100 6 48,600,005

Insurance costs 8,194,265 6,744,587 14,938,852 7 48,544,071

Specialized materials and services 5,524,896 27,566,385 33,091,281 15 207,672,789

Office and general supplies and services

833,652 12,654,621 13,488,273 6 28,769,578

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Other operating expenses 8,053,133 5,859,750 13,912,883 6 83,728,200

Routine maintenance – vehicles and other transport equipment

2,552,782 4,267,558 6,820,340 3 15,790,812

Fuel Oil and Lubricants 6,970,600 29,521,599 36,492,199 16 69,931,946

Routine maintenance – other assets

427,500 3,746,544 4,174,044 2 13,713,831

Total 80,344,219 144,517,805 224,862,024 100 866,848,734

Acquisition of Assets

During the period under review, Kshs 60 Million was spent on acquisition of capital

assets. Construction and other civil works consumed Kshs 32 Million while Kshs 12

Million was spent on construction of buildings.

Table: Acquisition of Assets

Pending Bills

Most of the outstanding bills are historical spanning over past financial years. In the

FY 2019/20, the County Government had an accrued eligible pending bills of Kshs.

652.8 Million out of which Ksh.436.1 Million was paid to various suppliers resulting

DESCRIPTION Q1 Q2 Cumulative

Amount Comparative Amount 2020

Construction of Buildings - 12,727,556 12,727,556 10,444,780

Refurbishment of Buildings - - - 981,525

Construction of Roads - 5,930,734 5,930,734 42663487.6

Construction and Civil Works 19,547,522 12,807,113 32,354,635 95,369,498

Overhaul and Refurbishment of Construction

- - - 51,601,711

Purchase of Vehicles and Other Transport Equipment

- 5,935,400 5,935,400 43,810,000

Purchase of Furniture and Institutional Equipment

- 180,500 180,500 16,224,257

Purchase of ICT Equipment, Software and Other ICT Assets

- 478,000 478,000 1,281,150

Purchase of specialized Plant, Equipment and Machinery

- 1,056,876 1,056,876 30,313,801

Purchase of Certified Seeds, Breeding Stock and Live Animals

- 1,528,000 1,528,000 5,999,925

Research, Studies, Project Preparation, Design & Supervision

- - - 67,082,021

Rehabilitation of Civil Works - - - 11,151,248

Total 19,547,522 40,644,179 60,191,701 379,742,887

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to un-paid balance of Kshs. 216.7 Million as at 30th June, 2020. In the 1st half of FY

2020/2021, a total of Kshs 90.3 Million was spent on the settlement of pending bills.

Given the trends in disbursement of funds from the National Treasury it is prudent

that a provision for pending bills be made to cover projects that will not have been

paid for by 30th June 2021. To this end, this paper allocates Kshs 530 Million to cater

for pending bills in FY 2021/2022. This amount includes Kshs 30 Million payable to

National Housing Corporation for Mbela estate.

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CHAPTER TWO: RECENT NATIONAL ECONOMIC DEVELOPMENT AND

POLICY OUTLOOK

Global and Regional Economic Developments According to the National Treasury’s 2021 Budget Policy Statement, the Kenyan economy was adversely affected by the outbreak of Covid-19 Pandemic and the swift containment measures. These not only disrupted the normal lives and livelihoods, but also to a greater extent businesses and economic activities. As a result, the economy contracted by 5.7 percent in the second quarter of 2020 from a growth of 5.2 percent in the first quarter in 2020. The economy is therefore estimated to slow down to a growth of around 0.6 percent in 2020 from the earlier projection of 2.6 percent in the 2020 Budget Review and Outlook Paper(BROP). Economic growth is projected to recover to 6.4 percent in 2021. In terms of fiscal years, economic growth is projected to grow by 3.5 percent in FY 2020/21 and further to 6.2 percent over the medium term.

The economy continues to register macroeconomic stability with low and stable

interest rates and a competitive exchange rate that support exports. Year-on- year

overall inflation remained within the Government target range of 5±2.5 percent in

December 2020 at 5.6 percent from 5.8 percent in December 2019. This lower

inflation was mainly supported by a reduction in food prices. The foreign exchange market has largely remained stable but partly affected by a

significant strengthening of the US Dollar in the global markets and uncertainty with

regard to the Covid-19 pandemic. Despite this, the current account deficit is estimated

to improve to 5.1 percent in 2020 from 5.8 percent in 2019 mainly supported by an

improvement in the trade balance. The Sub-Saharan African region has not been spared the negative impact of the

pandemic with the region projected to contract by 3.0 percent in 2020 from a growth

of 3.2 percent in 2019. The largest impact of the crisis on growth has been for tourism-

dependent economies, while commodity-exporting countries have also been hit hard.

Growth in more diversified economies will slow significantly, but in many cases will

still be positive in 2020.

Growth in the East African Community (EAC) region is estimated to slow down to 1.0

percent in 2020 compared to a growth of 6.2 percent in 2019. This growth will be

supported by positive growths in Kenya, Tanzania and Rwanda. Economic activities in

Burundi and Uganda are expected to contract in 2020.

National Economic Developments and Outlook In 2020, the Kenyan economy was adversely affected by the outbreak of Covid-19 Pandemic and the swift containment measures, which have not only disrupted the normal lives and livelihoods, but also to a greater extent businesses and economic activities. As a result, our economy is estimated to slow down to around 0.6 percent in 2020 from a growth of 5.4 percent in 2019. Looking ahead, the economy is projected to recover and grow by about 6.4 percent in 2021 and above

2929


6.2 percent over the medium term.

Trends in Kenya’s Economic Growth

Rates, Percent

Source: Kenya National Bureau of Statistics Inflation Rate

Year-on-year overall inflation rate remained low, stable and within the Government target range of 5+/-2.5 percent since end 2017. The inflation rate was at 5.6 percent in December 2020 from 5.8 percent in December 2019. This lower inflation was supported by a reduction in food prices

Core inflation (Non-Food-Non-Fuel) contribution to inflation remain low at 0.8 percent in December 2020 compared to 0.4 percent in December 2019. However, the contribution of fuel inflation to overall year-on-year inflation rose to 1.7 percent in December 2020 from 0.6 percent in December 2019 on account of increasing international fuel prices

Exchange rate The foreign exchange market has largely remained stable but was partly affected by a significant strengthening of the US Dollar in the global markets and uncertainty with regard to the Covid-19 pandemic. In this regard, the Kenya Shilling to the dollar exchanged at Ksh 110.6 in December 2020 compared to Ksh 101.5 in December 2019.

Interest Rates Short-term interest rates remained fairly low and stable. The Central Bank Rate was retained at 7.00 percent on November 26, 2020 same as in April 2020 to signal lower lending rates in order to support credit access by borrowers especially the Small and Medium Enterprises, distressed by COVID-19 pandemic. The interbank rate declined to 5.1 percent in December 2020 from 6.0 percent in December 2019 in line with the easing of the monetary policy.

3030


National economic development pillars in the Medium Term Plan III

The 2021 BPS, articulates measures that will stimulate growth, promote job creation, reduce poverty, protect the vulnerable groups and businesses. To achieve these, the Government will:

a) Roll out the Post-Covid-19 Economic Recovery Strategy b) Harnessing the implementation of the “Big Four” Agenda for job creation; c) Foster a secure and conducive business environment by maintaining

macroeconomic stability, enhancing security; improving business regulations; d) Fast track development of critical infrastructure in the country such as

roads, rail, energy and water, among others, so as to reduce the cost of doing business as well as promote competitiveness;

e) Transform economic sectors for broad based sustainable economic growth; f) Improve access to education, strengthen health care systems and enhance

cash transfers to support the vulnerable members of our society; g) Support youth, women and persons with disability to enable them actively

contribute to the economic recovery agenda; h) Facilitate the County Governments in strengthening their systems to enhance

service delivery; and i) Implement various structural reforms to enhance the efficiency of public

service delivery while at the same time ensuring accountability for better macroeconomic and fiscal stability, sustained credit ratings, improved fiscal discipline and minimized corruption.

Further the National Government will continue to consolidate the gains made in devolution in order to provide better service delivery and enhanced economic development.

Risks to the Economic Outlook Major risks have emerged from Kenya’s fiscal decentralization, which require prudent management especially by the County government. These include:

a. Persistence of the Covid-19 pandemic and required lockdowns voluntary social distancing and its effect on consumption

b. Weaker external demand, reduced tourist arrivals and containment measures due the Covid-19 pandemic.

c. Weather related shocks that could have negative impact on energy generation and agricultural output leading to higher inflation that could slow down growth.

d. The economy will continue to be exposed to risks arising from public expenditure pressures, particularly wage related recurrent expenditures.

e. Under performance of total own source revenue presents a significant risk, as it undermines the amount of funds allocated for critical infrastructure.

f. Heavy dependence on a few own-source revenue streams may lead to fiscal shocks occasioned by a dip in their main revenue source.

3131


g. The escalation in pending bills, which is caused mainly by under performance of OSR, technical challenges with cash flow management and violation of laid down procurement regulations.

h. Duplication of functions that risk generating intergovernmental conflicts, wasteful spending and financing gaps that could adversely affect implementation of fiscal framework


32

CHAPTER THREE: FISCAL FRAMEWORK AND COUNTY STRATEGIC PRIORITIES

FOR 2021/22-2022/23 AND THE MEDIUM TERM

2021/22 FISCAL FRAMEWORK AND POLICY

Fiscal Policy

Over the medium term, the Government will pursue Fiscal and management policies aimed

at streamlining recurrent expenditure while at the same emphasizing on capital investment.

Some of the policies and strategies to be adopted include:

1. In line with the national Government, implement a post COVID-19 Socioeconomic

Re-engineering Recovery Strategy

2. Planning, approval and implementation of projects based on viability and

sustainability

3. For huge capital projects, the planning and implementation will be done in phases to

ensure efficiency.

4. The county government will implement measures and strategies to enhance its

Own Source revenue collection to supplement the funds received from the

Exchequer.

Revenue side

1. Improved collection and efficiency in Own Source Revenue including full

automation and restructuring of systems.

2. Promotion of Private-Public Partnerships (PPPs) to finance mega projects health,

roads and water infrastructure.

3. Undertake a revenue baseline and potential survey with an aim of identifying and

exploring new revenue streams

4. Updating the valuation roll with a view of enhancing revenue collection. 5. Collection of all outstanding lands rates and rents to boost Own Source revenue

Expenditure side

1. The completion of all critical and viable ongoing programmes and projects shall be given the first priority in funds allocation.

2. Implementation of the County policy on Projects management that will ensure prioritization of high impact quick win projects.

3. Strengthening of the monitoring, evaluation and reporting at the project/programme, department and county levels.


33

2021/2022-2023/2024 Medium Term Revenue Projections

In the FY 2021/2022, the total resource basket envisaged for the county is Kshs 6.6 Billion comprising of 4.8 Billion(73%) equitable share, Kshs 1.4 Billion(21%) as loans and grants and Kshs 370 Million(6%) Own Source Revenue Table 6 : MTEF 2021/22- 2023/2024 County Fiscal Framework

Unlike the previous FYs, the 2021 Budget Policy Statement has not budgeted for the Conditional Grants from the National Government separately from the Equitable share. The grants left out in the BPS are I) Roads Maintenance and Fuel Levy Fund. II) Development of VTCs and III) Compensation for user fees forgone. It is therefore for this reason that in the 2021 CFSP funds have been ring-fenced to cater forthe following: Roads Maintenance, VTCs and Compensation for user fees forgone previously treated as conditional funds. 2021/2022 Expenditure Projections

Based on the county’s fiscal policy and in compliance with the fiscal responsibility principles outlined above in the PFM Act 2012, the county’s expenditure for the budget period in 2020/2021 is projected as follows: Recurrent Expenditure Recurrent expenditure is projected at 70% of total expenditure. This will however be spent to support capital expenditure. The County’s wage bill continues to exert undue pressure on the recurrent vote and this could undermine development if not mitigated. Restraining the growth of the county’s wage bill is a priority in the medium term in order to sustain growth. This will be achieved through the following measures:

1. Containing wages and salaries of public entities by limiting the size of the public service.

2. Realigning the existing staff with the functions of the county government as entrenched in the constitution to avoid duplication of roles in the departments.

Development Expenditure Development expenditure in FY 2021/2022 and the medium term is projected at 30% of total expenditure. This is consistent with the objective of progressively allocating more resources for critical capital projects.

FISCAL FRAME WORK FOR FY 2021-2022 to 2023-2024

SOURCE 2020-2021 2021-2022 % share 2022-2023 2023-2024

1 Equitable Share 4,241,100,000 4,842,174,698 73 5,084,283,433 5,338,497,605

2 Loans and Grants 1,052,894,523 1,379,682,318 21 1,448,666,434 1,521,099,756

3 Own Source Revenue 363,000,000 370,000,000 6 388,500,000 407,925,000

5,656,994,523 6,591,857,016 100 6,921,449,867 7,267,522,360


34

The projection is based on the assumption that there will be high absorption capacities for the spending agencies for development funds and that there will be continued implementation of the county government’s development agenda by investment in high impact initiatives and other projects as outlined in the CIDP County’s Broad Priorities for FY 2021/2022 and the medium term

The major policy thrust of the MTEF 2020/21-2022/23 is accelerated social-economic

transformation with special emphasis to food security and wealth creation. This is aimed at;

a) Improving access to clean and potable water for both urban and rural areas

b) Increasing agricultural and livestock productivity for food security and wealth

creation;

c) Improving access to quality and affordable social services-including quality Health

care and education

d) Social-economic empowerment of the youth, Women and PWDs through

employment creation and ease of access to credit

e) Reduction in the cost of doing business and attracting investments through

development of key infrastructure including roads network and energy.


35

CHAPTER FOUR: MEDIUM TERM EXPENDITURE ESTIMATES AND

DEPARTMENTAL CEILINGS

The sectoral allocation for the FY 2021/2022 and the medium term is influenced by the

necessity to finance projects that directly support wealth creation, food security and

reduction in poverty levels.

Attention will be given to projects and programmes that support the County Covid-19 Social

Economic Re-engineering and Recovery Strategy 2020/21 – 2022/23. This Strategy is meant

to facilitate the re-engineering and recovery of the County Governments economies from the

impact of Covid-19 pandemic. The Strategy has five pillars for re-engineering and recovery

of County economies namely; (i) boosting private sector; (ii) strengthening ICT capacity; (iii)

human capital development; (iv) policy, legislative and institutional reforms; and, (v)

strengthening County Governments preparedness and response to pandemic and disasters.

Given that the sectoral huge demand for funds from the 2020 Annual Development Plan and

given the limited resources available, it is important to come up with a fair way of allocating

resources. The following criterion has been used in the proposed FY 2021/2022

departmental allocations.

1. In the recurrent expenditure category non-discretionary expenditures/Statutory

obligations such as salaries take first priority.

2. Citizens prioritization during the 2020 CADP and the 2021 CFSP public participation

exercises have guided the allocation of development expenditure.

3. On-going and Critical infrastructure improvement projects

4. The baseline estimates also reflects the current departmental spending levels-Current

absorption rates

Details of Sectoral and Departmental Priorities and Baseline Ceilings

Based on the resource envelop projected above and the broad county priorities, County

departments have been allocated funds as discussed below and detailed in Annexes 1and 2.

Priority Area I: Improving access to clean and potable water for both urban and rural areas

3267 Water, Environment, Sanitation, Climate Change and Natural Resources

During the FY 2021/2022 and the medium term, the Strategic Priorities to be implemented

by the department of Water, Environment and Sanitation include:

1. Increasing access to portable and affordable water in rural areas and urban centers 2. Provision of water for livestock 3. Promotion of water harvesting 4. Securing and conserving the critical water catchment areas 5. Management of storm water. 6. Promotion of Solid and liquid waste management


36

7. Increasing access to clean and sustainable environment To execute its mandate, the department has been allocated Kshs 15.6 Million for recurrent expenditure and Kshs 60.5 Million for capital projects. A further Kshs 400 Million is expected as loans and grants from the development partners Priority Area II: Increasing agricultural and livestock productivity for food security and wealth creation; 3265 Agriculture, Livestock and Irrigation Development

During the FY 2021/2022 and the medium term, the department has lined up priority projects and programmes which include:

a) Crops development( Value Chain development for bananas, Avocado, Macadamia, Sorghum, Rice and Cotton

b) Promotion of Drought tolerant crops c) Revitalization of Horticultural Production Centres (HPC) d) Strengthening extension services, e) Enhancing accessibility to affordable inputs and credit, f) Promotion of sustainable land use practices - rehabilitation of gullies and water

catchment areas g) Soil fertility and water management, h) Rehabilitation of seed farms, i) Revitalization of agriculture mechanization services, j) Promotion of Agro – forestry k) Promotion of Climate smart Agriculture. l) Promotions of livestock value addition ventures such as dairy, beef, poultry and

leather processing. m) Promotion of sustainable utilization of inland capture fisheries through:

strengthening the BMUs; n) Range rehabilitation and water improvement for livestock in the ranches; o) Maintenance of facilities at livestock multiplication centres in Bachuma and

Mwatate p) Maintenance and Improvement of facilities for livestock Holding Grounds; q) Enhancing fish safety, quality assurance, value addition and marketing; r) Promotion of appropriate fish handling and preservation technologies s) Support development of water pans and farm ponds t) Rehabilitation of existing irrigation canals u) Expansion of irrigable areas v) Construction of dams and pans

To achieve its mandate, the department has been allocated Kshs 16.5 Million for recurrent expenditure and Kshs 63 Million for Development expenditure. A further Kshs 360 Million is expected for World bank and EU funded projects Priority Area III: Improving access to quality and affordable health care services 3269 Health Services

During the FY 2021/2022 and the medium term, the department of Health services will implement key priority projects that will

a. Ensure access to affordable and quality prenentive and promotive health care. b. Ensure improvement and availability of critical health infrastructure c. Ensure equipping of main health facilities d. Equipping of all health facilities with the necessary medical equipment, drugs

and personnel. To deliver these priorities, the department has been allocated Kshs 161.5 Million for


37

recurrent expenditure and Kshs 93.5 Million for health sector infrastructure development. Priority Area IV: Improving access to quality and affordable education including bursaries 3268 Education, Library Services and VTCs

The key priorities for FY 2021/2022 and the medium-term will include:

1. Promotion of access, retention and completion rates for secondary and tertiary institutions through enhancement of education fund to adequately address the demand for scholarships, loans and bursaries, mentor ship and career guidance and Scholarship for specialized courses.

2. Strengthen Early Childhood Education through Infrastructure improvement, staffing, grants, community sensitization, feeding program, growth monitoring, teaching/learning materials and graduation.

3. Promote reading culture and access to reading materials through library infrastructure improvement, Mobile library services and community sensitization

4. Promotion of access to quality and affordable Vocational Training In the FY 2021/2022, the department has been allocated Kshs 77 Million for development expenditure which includes Kshs 60 Million for development of VTCs. The department has been allocated Kshs 45 Million for recurrent expenditure, while an allocation of Kshs 150 Million is set aside for the Education Funds Board Priority Area V: Reduction in the cost of doing business and attracting investments through development of key infrastructure including roads network and energy.

3272 Public Works, Transport and infrastructure

In the FY 2021/2022, the department will continue implementing the following priorities:

1. Improvement of existing roads network 2. New road formation 3. Street lighting using renewable energy sources 4. Provision of technical infrastructure

In the FY 2021/2022 the department has been allocated Kshs.182Million for development

which includes Kshs 160 Million ring-fenced for county roads maintenance. The department

has an allocation of Kshs 20.4 Million for operations and maintenance

3270 Trade, Tourism, Cooperatives and Industrialization

The department has lined up the following priorities for FY 2021/2022 and the medium term:- a. Promotion of trade development by supporting SMEs b. Enhance investment in the county through legislation and ease of doing business index; c. Promotion of value addition and undertake economic empowerment through creation

and training of cooperatives d. Promotion of local and international tourism through development of tourism

infrastructure


38

The department has an allocation of Kshs 35.6 Million for development and Kshs 17.6

Million for recurrent expenditure. The County Liquor Licensing Board has benn allocated

Kshs. 6 Million for its operations

3273 Lands, Mining and Energy

In the FY 2021/2022, the department will implement the following priorities

a) Completion of the County Spatial Plan b) Updating the valuation roll c) Promotion of solar energy through installation of solar systems at the County

headquarters and the main health facilities In the FY 2021/2022, the department has been allocated Kshs 15.7 Million for development expenditure and Kshs 23.4 Million for recurrent expenditure. Priority Area VI: Social-economic empowerment of the youth, Women and PWDs through employment creation and ease of access to credit

3276 Youths, Sports, Gender, Culture and Social Services

The department will continue to implement its core mandate by pursuing the following

Strategic Priorities for 2021/2022:

a) Sports development-Through establishment of sports facilities and equipment;

b) Youth empowerment

c) Social development

d) Gender mainstreaming and development.

e) Promote economic empowerment of the community.

To deliver the mentioned priorities, in FY 2021/2022, the department has been allocated Kshs 57 Million for development and Kshs15 for operations and maintenance.

Priority Area VII: Public Administration and intergovernmental Affairs

3261 County Assembly

The County Assembly is the legislative arm in the County, with the primary responsibility of creating and passing local laws for the benefit of the County’s development and within the framework of the constitution and other laws. In executing its mandate, the County Assembly: - plays an oversight role on the County

executive committee and any other County executive organs; receives, debates and approves

policies and development plans prepared by the County Executive; Vets and approves

nominees for appointment to county public offices; approves County Government budget and

expenditure and approves county the borrowing plans.

In FY 2021/2022, the County Assembly has been allocated Kshs 601 Million for recurrent

expenditure and Kshs 12 Million for development expenditure.

Kshs 400 Million has been set aside for Ward Equalization Projects to be implemented by

respective departments. The amount does not include Kshs 100 Million already allocated for

bursaries and a further Kshs 100 allocation for roads maintenance.


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3262 Devolution, Public Service and Administration

The department is planning to implement the following strategic priorities:-

1. Promote Public Participation in Decision-Making and Development Process 2. Promote Effective Service Delivery through well Coordination of service provision 3. The Promote peace, security and more resilient communities to disaster in the county 4. Human Resource management and Performance management system

The department has been allocated Kshs 14 Million for development and Kshs 66.5 Million

for operations and maintenance. This amount includes Kshs 45 Million conditional allocation

for KDSP

3263 Gubernatorial

In the FY 2021/2022 and the medium term, the major priority areas to be pursued will be

provision of strategic leadership and coordination of county government business. The office

will also coordinate special programmes, service delivery, ICT and promote activities of

County Budget and Economic Forum.

The office has been allocated Kshs 20 Million for recurrent and Kshs 125 Million for

operations and maintenance

3264 Finance and Economic Planning

The department’s Strategic Priorities for 2021/2022 and the medium term include:

1. Prudent financial management: through strengthening of controls; development of sound policies and laws; Automation of accounting and procurement processes,

2. Economic development Planning: through coordination of the preparation of County Annual Development Plans and other planning and budgeting documents,

3. Resource Mobilization: Through automation of revenue management, 4. Monitoring and evaluation: Strengthen the continuous tracking of progress in the

implementation of programmes

In the FY 2021/2022, the department has an allocation of Kshs 3.5 Million for development

expenditure and Kshs 126.9 Million for recurrent expenditure. A total of Kshs 30 Million has

been allocated to the County Emergency Fund, Kshs 30 Million for car loans and Mortgage

while Kshs 100 Million has been set aside for procurement of New County motor vehicles.

3271 County Public Service Board (CPSB)

In the FY 2021/2022 the CPSB’s key priorities will be:

1. Promotion of Ethics and Discipline in the County Public service and the general; 2. Provision of human Resource Capacity to the County government and Provision of

adequate administration services to the Board and its stakeholders.


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In the FY 2021/2022, the Board has been allocated Kshs 3.5 Million for development and

Kshs 11 Million for development expenditure


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Annex 1: 2021/2022 Recurrent Budget Ceilings

FY 2020-2021 FY 2021-2022 FY 2022-2023 FY 2023-2024

VOTE DEPARTMENT/ARM APPROVED REVISED PROPOSED FUNDS/GRA

NTS

TOTAL PROJECTED PROJECTED

3261 County Assembly 601,000,000 647,775,000 601,000,000 601,000,000 631,050,000 662,602,500

3262 DPSA-Salaries and wages 2,135,398,325 2,400,973,325 2,550,000,000 2,550,000,000 2,677,500,000 2,811,375,000

3262 Devolution, Public Service and Administration 30,230,161 17,271,419 21,519,039 45,000,000 66,519,039 69,844,991 73,337,240

3263 Gubernatorial 115,112,105 116,088,977 83,141,541 83,141,541 87,298,618 91,663,549

3264 Finance and Economic Planning 325,142,917 356,642,917 126,978,878 100,000,000 226,978,878 238,327,822 250,244,213

3265 Agriculture, livestock, Fisheries and Irrigation 27,864,505 22,413,412 16,553,107 16,553,107 17,380,762 18,249,800

3267 Water, Environment and Climate Change 27,249,225 15,894,925 15,626,133 15,626,133 16,407,439 17,227,811

3268 Education, Libraries and VTCs 172,569,828 154,720,795 45,024,451 150,000,000 195,024,451 204,775,673 215,014,457

3269 Health Services 275,054,781 239,100,185 161,558,323 161,558,323 169,636,239 178,118,051

3270 Trade, Tourism, Industrialization and

Cooperatives

29,712,921 20,945,923 17,679,049 6,000,000 23,679,049 24,863,002 26,106,152

3271 County Public Service Board 12,878,820 9,943,820 11,578,367 11,578,367 12,157,285 12,765,149

3272 Public Works, Housing and Infrastructure 23,650,000 25,960,875 20,459,640 20,459,640 21,482,622 22,556,753


3273 Lands, Mining and Energy 14,823,742 16,355,000 13,441,123 10,000,000 23,441,123 24,613,179 25,843,838

3276 Youth, Gender, Sports, Culture and Social

Services

22,566,195 16,628,325 15,147,410 15,147,410 15,904,781 16,700,020

Provision for Recurrent Pending Bills 150,000,000 150,000,000 157,500,000 165,375,000

3,813,253,525 4,060,714,898 3,699,707,060 311,000,000 4,160,707,060 4,368,742,413 4,421,804,534

Note: Kshs 311 Million comprises of :

◆ Kshs 150 Million allocation to Education Fund Board under Education, Libraries and VTCs

◆ Kshs 10 Million allocation to Mwatate Municipality under Lands and Mining

◆ Kshs 30 Million for County Emergency Fund, 30 Million for Car loans and Mortgage and Kshs 40 Million for Purchase of M/vehicles under Finance and Planning

◆ Kshs 45 Million conditional allocation for KDSP under Devolution, Public Service and Administration

◆ Ksh 6 Million allocation for Liquor Licensing Board under Trade, Tourism, Industrialization and Cooperatives


Annex 2 : Departmental Development ceilings

FY 2020-2021 FY 2021-2022 FY 2022-2023 FY 2023-2024

VOTE DEPARTMENT/ARM APPROVED REVISED PROPOSED GRANTS TOTAL PROJECTED PROJECTED

3261 County Assembly 52,000,000 52,000,000 8,565,712 - 8,565,712 15,000,000 15,000,000

3262 Devolution, Public Service and

Administration

5,000,000 5,000,000 14,276,187 - 14,276,187 23,000,000 25,000,000

3263 Gubernatorial 12,000,000 5,640,000 7,138,094 - 7,138,094 15,000,000 15,000,000

3264 Finance and economic Planning 103,300,000 133,300,000 3,569,047 - 3,569,047 10,000,000 10,000,000

3265 Agriculture, livestock, Fisheries and

Irrigation

433,282,953 428,128,808 62,989,102 - 62,989,102 584,800,000 599,800,000

3267 Water, Environment and Climate Change 485,550,000 491,947,516 60,531,034 - 60,531,034 559,552,454 559,552,454

3268 Education, Libraries and VTCs 54,350,000 132,797,100 17,805,220 60,000,000 77,805,220 180,888,902 190,888,902

3269 Health Services 216,489,150 207,819,150 93,509,026 - 93,509,026 300,000,008 350,000,008

3270 Trade, Tourism,Industrialization 59,740,000 31,050,000 35,690,468 - 35,690,468 80,234,660 108,234,660

3271 County Public Service Board 5,000,000 5,000,000 3,569,047 - 3,569,047 10,000,000 5,000,000

3272 Public Works, Housing and Infrastructure 266,119,001 324,930,346 21,735,196 161,000,000 182,735,196 378,713,990 398,713,990

3273 Lands, Mining and Energy 8,000,000 5,500,000 15,703,806 - 15,703,806 20,000,000 43,004,656

3276 Youth, Gender, Sports, Culture and Social 266,584,894 200,901,304 57,461,653 - 57,461,653 122,876,509 140,876,509


Services

Loans and Grants from Development

Partners

1,334,682,318 1,334,682,318 1,401,416,434 1,471,487,256

Provision for Development Pending Bills 380,000,000 - 380,000,000

Provision for Ward Equalization Projects 400,000,000 - 400,000,000 420,000,000 441,000,000

1,967,415,998 2,024,014,224 1,182,543,592 1,555,682,318 2,738,225,910 4,121,482,957 4,373,558,435

Notes::

◆ Kshs 161 Million is ring-fenced allocation for Roads maintenance previously conditional fund

◆ Kshs 60 Million is ring-fenced allocation for development of VTCs previously conditional fund

◆ Kshs 400Million is allocation for ward projects( not to including road maintenance and bursaries already taken care of) Kshs 1.334 Billion conditional grants from development partners yet to be dis aggregated in the 2021 CARA


Annex 3: Consolidated 2021 CFSP Public Proposals

MWATATE SUB-COUNTY

BROAD PRIORITIES

WUSI-KISHAMBA MWATATE CHAWIA RONG'E BURA

Food security Health Water supply Education Water Supply

Water supply Education Health Roads infrastructure Health services

Health Services Water supply Food security Water supply Food security

Roads infrastructure Food security Education Health Roads infrastructure

Education and VTCs Roads infrastructure Roads infrastructure Food security Education

Socioeconomic empowerment

VOI SUB-COUNTY

BROAD PRIORITIES

MARUNGU NGOLIA SAGALLA KASIGAU MBOLOLO KALOLENI

Education and Health Food security Health Water Supply Water supply Roads infrastructure

Food security Education Water Supply Food security Health and Education Social Economic

empowerment

Socioeconomic

Empowerment

Water Supply Education Roads infrastructure Food security Water Supply

Water Supply Health care Roads infrastructure Health services Roads infrastructure Education

Roads infrastructure Roads infrastructure Socioeconomic

Empowerment

Socioeconomic Empowerment Socioeconomic

Empowerment

Heath services

Food security

WUNDANYI SUB-COUNTY

BROAD PRIORITIES

WUNDANYI/MBALE WERUGHA KISHUSHE/WUMINGU MGHANGE/MWANDA

Water Supply Water supply Food security Water Supply

Market infrastructure Health services Water Supply Roads Infrastructure


Roads infrastructure Education/bursaries Roads infrastructure Health services

Health services Food security Health and Education Education

Education Roads infrastructure Social-Economic

Empowerment

Socioeconomic Empowerment

TAVETA SUB-COUNTY

BROAD PRIORITIES

CHALLA BOMENI MAHOO MBOGHONI MATA

Water supply Health services Water Supply Roads Infrastructure Food security

Food security Water supply Roads Infrastructure Health services Water Supply

Health and Education Education Education Education Roads infrastructure

Roads infrastructure Roads infrastructure

and physical planning

Health services Food security Health care

Socioeconomic

Empowerment

Ease of doing

business

Socioeconomic

Empowerment

Water supply Socioeconomic

Empowerment


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county government of taita taveta

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