fiscal strategy paper - kisumu · this is the second fiscal strategy prepared by the county paper...

COUNTY GOVERNMENT OF KISUMU

FISCAL STRATEGY PAPER

FOR FY 2015/2016

ECONOMIC TRANSFORMATION FOR THE RESIDENTS OF KISUMU COUNTY

FEBRUARY 2015

i 2015 County Fiscal Strategy Paper


© County Fiscal Strategy paper (CFSP) 2015 For copies of the document, please contact:

County Treasury County government of Kisumu P. O. Box 2738-40100 KISUMU, KENYA Tel: +254-20-2252-299 Fax: +254-20-341-082

The document is also available on the internet at: www.kisumu.go.ke

ii 2015 County Fiscal Strategy Paper

COUNTY GOVERNMENT OF KISUMU Foreword This is the second Fiscal Strategy Paper prepared by the County under a new constitutional dispensation of devolved governance. Considering the challenges experienced with the FY 2014-2015 budgeting process, the County Government of Kisumu, sets out the it‘s priority programs to be implemented in the FY 2015-2016 . It is framed against a focus of improving national economic prospects, underpinned by gradual strengthening of the advanced economies and continued robust growth in sub-Saharan Africa. It is evident also that there is renewed investor interest in Kisumu County, following recent upgrading of the Kisumu Airport to international standards, and the ongoing road works on the major highways. This will accelerate economic growth prospects, employment and improved livelihood in the county of Kisumu. However it should be noted that high poverty level and unemployment are among the major socio-economic challenges in Kisumu County. It is estimated that over 60 per cent of the population are poor compared with the national average of 46 per cent as at 2006. The main causes of poverty include HIV and AIDS pandemic, collapse of local industries, unemployment, low agricultural and fish production. Food insecurity, inaccessibility to affordable healthcare, lack of proper storage facilities, erratic and unreliable rainfall, poor and inaccessible road network, frequent floods, problems with the sugar, rice, cotton and fish industries, lack of title deeds, poor water and sanitation systems, malaria, and water borne diseases worsens poverty situation in the county. In order to tackle this challenge, this Strategy emphasizes on socio-economic transformation in five major areas: (i) Investing in quality and accessible healthcare services and early childhood

education as well as social safety net to reduce burden on the households and complement and sustain long term growth and development;

(ii) Creation of conducive economic environment in order to encourage innovation, investment, growth and expansion of economic and employment opportunities;

(iii) Investing in agricultural transformation by encouraging farm mechanization, availing fertilizers and approved seeds to farmers, value addition and promoting irrigation. This will ensure food security, expand food supply, reduce food prices, support expansion of agro-processing industries and therefore reduce unemployment.

(iv) Improving transport logistics investing in key infrastructure, including roads, bridges and water ways to reduce cost of doing business and improve competitiveness; and

(v) Ensuring effective cascading of devolution to the lowest level for better service delivery and enhanced rural economic development through strengthening of sub-county, ward and village administration.

This Fiscal Strategy Paper, therefore, sets out priority areas for economic transformation and building a shared prosperity to be implemented in the Medium Term Expenditure Framework for 2015/16–2016/17.

iii 2015 County Fiscal Strategy Paper


Acknowledgement

This is the second Fiscal Strategy Paper prepared by the County Government of Kisumu. I cannot fail to take cognizance of the citizens who participated in preparation of the CIDP and whom we have consulted from time to time on budgeting process. I also take this opportunity to appreciate Members of County Assembly who have been championing the needs of the public during preparation of the CIDP and budget process.. My appreciation also goes to the departmental heads in the County Government whose resourceful contribution made this exercise a success. We thank members of the public who took part in the public participation forums for the budget. We hail H.E. the Governor of Kisumu for his moral support and for providing a conducive environment created for accomplishment of fiscal strategy paper formulation, personal input and other forms of support. GEORGE OKOTH-ONGAYA EXECUTIVE COMMITTEE MEMBER-FINANCE AND PLANNING

iv 2015 County Fiscal Strategy Paper


Table of Contents

Foreword ................................................................................................................................................. ii

Acknowledgement ................................................................................................................................. iii

Chapter 1 ................................................................................................................................................. 1

Legal Basis for the Publication of the Fiscal Strategy Paper .................................................................. 1

Fiscal Responsibility Principles for the National and County Governments .......................................... 1

Organization of the 2015/16 County Fiscal Strategy Paper .................................................................... 6

Chapter 2 ................................................................................................................................................. 8

Recent Economic Developments and Policy Outlook ............................................................................ 8

Growth Update ................................................................................................................................... 8

Inflation within single digit ................................................................................................................ 9

Interest Rates have eased progressively ........................................................................................... 9

The shilling Exchange rate demonstrates mixed performance ...................................................... 10

County Fiscal Performance and Challenges ................................................................................. 11

Challenges ......................................................................................................................................... 13

Chapter 3 ............................................................................................................................................... 14

Fiscal Policy and Budget Framework ................................................................................................... 14

3.1 Fiscal Responsibility Principals .................................................................................................. 14

3.2 Fiscal Structural Reforms............................................................................................................ 15

3.3 County Sector Priorities .............................................................................................................. 16

Chapter 4 .............................................................................................................................................. 21

RESOURCE ENVELOPE AND CRITERIA FOR RESOURCE ALLOCATION ...................... 21

4.1 Determination of Resource Envelope ...................................................................................... 21

4.2 Criteria for Resource Sharing ................................................................................................. 23

1 2015 County Fiscal Strategy Paper


Chapter 1

Legal Basis for the Publication of the Fiscal Strategy Paper This Fiscal Strategy Paper is prepared in pursuant to Public Finance Management Act, 2012 which stipulates thus: Responsibilities of county government with respect to the County Budget Process –Section 117. (1) The County, Treasury shall prepare and submit to the County Executive Committee the County Fiscal Strategy Paper for approval and the County Treasury shall submit the approved Fiscal Strategy Paper to the county assembly, by the 28th February of each year. (2) The County Treasury shall align its County Fiscal Strategy Paper with the national objectives in the Budget Policy Statement. (3) In preparing the County Fiscal Strategy Paper. the County Treasury shall specify the broad strategic priorities and policy goals that will guide the county government in preparing its budget for the coming financial year and over the medium term. (4) The County Treasury shall include in its County Fiscal Strategy Paper the financial outlook with respect to county government revenues, expenditures and borrowing for the coming financial year and over the medium term. (5) In preparing the County Fiscal Strategy Paper, the County Treasury shall seek and take into account the views of —

(a) the Commission on Revenue Allocation; (b) the public; (c) any interested persons or groups; and (d) any other forum that is established by legislation.

(6) Not later than fourteen days after submitting the County Fiscal Strategy Paper to the county assembly, the county assembly shall consider and may adopt it with or without amendments. (7) The County Treasury shall consider any recommendations made by the county assembly when finalising the budget proposal for the financial year concerned.

Fiscal Responsibility Principles for the National and County Governments

In line with the Constitution, the new Public Finance Management (PFM) Act, 2012, sets out the fiscal responsibility principles to ensure prudent and transparent Management of public resources. The PFM law (Section 107) states that:

(1) A County Treasury shall manage its public finances in accordance with the principles of fiscal responsibility set out in subsection (2), and shall not exceed the limits stated in the regulations.



(2) In managing the county government’s public finances, the County Treasury shall enforce the following fiscal responsibility principles-

(a) The county government’s recurrent expenditure shall not exceed the county government’s total revenue; (b) Over the medium term a minimum of thirty percent of the county government’s budget shall be allocated to the development expenditure; (c) the county government’s expenditure on wages and benefits for its public officers shall not exceed a percentage of the county government’s total revenue as prescribed by the County Executive member for finance in regulations and approved by the County Assembly; (d) Over the medium term, the government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure; (e) the county debt shall be maintained at a sustainable level as approved by county assembly; (f) the fiscal risks shall be managed prudently; and (g) a reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, taking into account any tax reforms that may be made in the future.

(3) For the purposes of subsection (2) (d), short term borrowing shall be restricted to management of cash flows and shall not exceed five percent of the most recent audited county government revenue (4) Every county government shall ensure that its level of debt at any particular time does not exceed a percentage of its annual revenue specified in respect of each financial year by a resolution of the county assembly. (5) The regulations may add to the list of fiscal responsibility principles set out in subsection Overview

The 2015 County Fiscal Strategy paper is the second to be prepared under the Kisumu County Government and emphasizes the seven pillars of prosperity including (1) Agriculture The implementation of the programmes under these pillars is expected to act as catalyst for industrial and agricultural productivity which in turn will secure food sustainability and jobs creation for Kisumu residents. This CFSP compares well with the 2015 Draft Budget policy Statement presented to National Assembly for approval on various fronts; Pillar 1: Agriculture and food security The prosperity for Kisumu County will be accelerated if the County makes substantive investment in agriculture. The pillar aims at among other things promotion of market access and product development, promotion of sustainable land use, access to credit and agricultural inputs, fish safety and quality assurance and value addition.



The Pillar compares well to Agricultural transformation and food security pillar in the Budget policy statement which prioritizes investment in agricultural reforms and productivity enhancement as a way of raising rural incomes and making lasting inroads into poverty reduction. In the County sorghum and rice are grown in large-scale in the Kano plains. Most of the water for irrigation comes from river Nyando, whose annual floods displace huge numbers of people. Kano plains also hosts sugarcane fields that supply Kibos, Muhoroni and Chemelil sugar factories located within the County. Fishing sector is also faced with challenges of over fishing, unsustainable fishing methods and hyacinth menace. The strategy to promote the gains so far realized by the County in agriculture will include agricultural mechanization to increase acreage under production, making available high yielding seeds, zoning and earmarking specific crops for high yield regions and forging partnerships with the National Government to ensure availability of subsidized fertilizer. The county will also be investing in 40 new water projects by the end of 30th June 2015 to enhance access to clean water for both domestic use and irrigation. Given the challenges in the Agricultural sector, the County will also put in place the following mitigation measures to reverse their adverse effects: de-siltation of the river banks particularly along river Nyando and Miriu; encouraging farmers to adopt the drought – tolerant crops such as sorghum and cassava, investment in smallholder irrigation schemes. Pillar II: Industrialization and Enterprise Development The objective of pillar II is to spur innovation and investment, foster growth and employment creation. This is line with the National Government pillar on creating a conducive business environment for employment. Kisumu city and the surrounding areas have a number of industries including agro-chemical and Food Company, Homa line company ltd, Prime Steel Industry and sugar industries such as Kibos, Chemelil and Muhoroni. There are also light industries in the County namely molasses, fish processing and other manufacturing industries. The county is also keen in developing road infrastructure with the objective of facilitating fast movement of goods and services. Towards this end, the county will be investing in 200 new road projects which covers 625km.This will be in addition to 525km of road opened /improved in 2013/14 financial year. Many shopping malls are also springing in the City with the latest ones being west end, tuff foam and Dubai centre. However, the County is also faced with weak cooperative societies, low participation of women and youth in cooperative movement and lack of access to credit facilities by small and medium term enterprises.



To encourage innovation and expand industrial base the County will construct industrial development and incubation centres. At least one new Youth polytechnic / vocational centre will be constructed and equipped in each sub County by June 2017. The department of Industrialization and Enterprise development will endeavour to facilitate the transfer of appropriate technical skill to small and medium enterprises and cooperative societies. The County will further be formulating policy and legal framework aimed at strengthening the cooperative societies by June 2016. The Lake links the County not only with three other lakeside counties but also with the countries of Tanzania and Uganda. As such, the port of Kisumu despite being inactive at the moment, it has the potential to become a regional Centre of Lake Transport and a gateway for Kenya into the rest of the African Great Lakes region. Therefore, the County Government is holding talks with the neighbouring Counties to explore ways of revamping the Lake Transport. Besides, construction of Phase II of the standard gauge railway line from Nairobi to Kisumu (at the port with the shortest access to EAC) will begin in FY 2015/16 under design and build framework. The upgrading of railway line from Nakuru to Kisumu will also commence in the course of FY 2015/16. These will lead to faster and cheaper movement of freight and passengers and enhance competitiveness of the County. Pillar III: Tourism The County is also prioritizing investment in tourism sector with the aim of developing new and/ or conserving tourism attraction sites, deepening both internal and external tourism opportunities and expansion of hotel infrastructure. This will definitely lead to increased employment opportunities and have trickle-down effect on incomes of the residents of Kisumu.

Kisumu County has unique features such as the shoreline of Lake Victoria, Kit Mikayi, Ndere Island National park (which hosts an amazing variety of wildlife), Impala Park among others which collectively make Kisumu a major tourist destination. The Kisumu international Airport now has the potential to deliver international tourists directly into the county.

Diversification and development of tourism products will be pursued by the County to avoid over-dependent on old products. For instance, the County commenced hosting of cultural event in 2014, and the event will be conducted annually by the County Government in every month of December. There is also annual miss tourism event every November, which began in 2013.These are expected to continue in the medium term as a way of re-inventing tourism products. The County will also formulate policy and legal framework to strengthen the regulatory environment and encourage new investments in the sector. As the County turns around the tourism sector, use of ICT will be critical as an enabler of tourism information management system as well as creation of awareness.



Promotion of Lake recreational fishing and sports alone, although not yet started, has the potential to double the number of tourists visiting the County. Therefore, going forward, the County Government will, in 2016 establish (i) an inter-departmental committee for the bi-annual Lake Victoria recreational fishing sport, and (ii) establish recreational fishing sport fund Kisumu Urban Project (KUP). The County Government will also be exploring the possibility of converting Kisumu City to a tourism resort City. Towards this end, the Government has started talks with the management of Kenya Tourism Fund to finance the development of a floating restaurant in Lake Victoria. Pillar IV Technology The County further prioritizes investment in Information and Communication Technology with the objective of enhancing Information dissemination and optimizing revenues from local sources. The Government remains fully committed to scaling up the implementation of e-revenue to reduce cost of revenue collection, ceil pilferages and reduce human interface in the collection process. The County will be rolling-out e-ticketing in 2015 targeting parking fees and market fees. GIS mapping will also be implemented and linked to revenue collection module beginning April 2015, which is expected to maximize revenue from property levies. In order to facilitate access to information, the County will be establishing a radio station, develop digital villages and operationalize free Wi-Fi. Pillar V Sports and talent development This strategy aims at entrenching the sporting culture and enhancing empowerment of the youth through developing of sports talents. The sporting culture must result in a high number of healthy youth who can be productively engaged in economic development. As part of this process, the County will also be establishing one youth talent academy to aid in identification and nurturing of talents. Construction of Community playgrounds will also be considered due to their potential to act as incubators of talents. Pillar VI Health In line with the National Government strategy on healthcare reforms which aims at building a lasting healthy Kenya with higher productivity for sustained economic transformation and given that health is largely a responsibility of the County Governments, we will prioritize investment in the health sector. To date, the County has completed the construction of 20 and Improved Health facilities that were inherited from defunct local authorities and National Government. The County is also hosting the state of the art Intensive Care Unit (ICU) at Jaramogi Oginga Odinga teaching and referral hospital. However, there are challenges preventing the sector from offering



effective and efficient services. These include inadequate staffing, staff turnover, Knowledge practice gaps, stock out of drugs and medical supplies. Over the medium term, the County Government will continue to expand the existing facilities, complete the on-going construction of new facilities and develop systems to support and expand health care services and sanitation at the community level. The County will also be recruiting more health workers in 2015. In order to streamline the management of public resources and medical supplies at the facility levels, an efficient and effective framework will be put in place. Pillar VII Education The County Government has made tremendous progress in ensuring increased access to education in order to scale up the literacy levels in the County in line with vision 2030 and millennium development goals. There are over 640 ECD Centres, 655 primary schools and 158 secondary schools. Other educational institutions include three universities, five university colleges, one national polytechnic, one Medical Training College, Kenya Utalii College campus, together with other private institutions. In fulfilling its constitutional mandate to provide pre-primary education and vocational education, the county Government strategies, that will focus on upgrading schools’ physical infrastructure, upholding quality and skills development will involve; (i) ECD physical structure modernization, (ii) expansion and modernization of technical institutions and village polytechnics, (iii) employment of ECD teachers, and (iv)strengthening quality control through enhanced supervision. The County Government will be constructing at least one model youth polytechnic/ vocational centres in each sub-county beginning 2016. Construction / renovation of workshops in the existing village polytechnics will also be continued. The county will construct 10 new youth polytechnic and equip the youths with the requisite skills, knowledge and enhance capacity to engage in meaningful economic activities. The county is also construct 60 new ECD schools in 2014/15 and additional 10 ,Community Hall/Resource centre.

Organization of the 2015/16 County Fiscal Strategy Paper Chapter two outlines the recent economic developments and policy outlook. It provides the economic context of the 2015/16 MTEF budget formulation. These mainly centre on the national scene. Chapter three covers the fiscal policy and budget framework. It explores the framework that will support growth over the medium term, while continuing to pursue seamless resource flow while ensuring sustainable public debt. Chapter four presents the resource envelope and spending priorities for the proposed 2015/16 MTEF Budget and in the medium term. Sector priorities are also reviewed for the 2015/16.



Chapter 2

Recent Economic Developments and Policy Outlook The rebased GDP estimates in nominal terms for 2013 is Ksh 4,757.5 billion which represents 25.3 percent increase from the previous estimates. This translates to US$ 1,269 in GDP per capita in 2013 up from US$ 994 in 2013, placing Kenya at lower middle income economy. Kenya’s economy is now ranked as the 9th largest in Africa. Growth Update The economy grew by 5.7 percent in 2013, up from 4.5 percent growth in 2012. The increase in growth in 2013 was supported by improved activities in agriculture, forestry and fishing (5.1 percent), manufacturing (5.9 percent), wholesale and retail trade (9.2 percent), financial and insurance activities (9.3 percent) and information and communication (13.5 percent). In the first three quarters of 2014 the economy expanded by 5.2 percent on average compared with 6.6 percent in the same period in 2013. On account of performance during the first three quarters and the projected growth of 5.3 percent in 2014, the fourth quarter growth of 2014 is estimated to be at 5.5 percent. The economy is estimated to have expanded by 5.5 percent in the third quarter of 2014 compared to a revised estimate of 6.2 percent in the same period of 2013. The growth was mainly supported by robust growths in; construction (11.0 percent), finance and insurance (9.9 percent), wholesale and retail trade (7.2 percent); information and communication (6.6 per cent); and agriculture and forestry (6.2 per cent). All the sectors of the economy recorded positive growths except accommodation and food services (hotels and restaurants) which has consistently been on the decline since last year.

Comparison in GDP Growth Rates

Source: KNBS



Going forward, the growth outlook is promising due to continued implementation of bold economic policies and structural reforms as well as sound economic management. The economy is projected to grow by 5.3 percent, 6.9 percent in 2014 and 2015, respectively, and 7.0 percent over the medium term. This level of growth will be underpinned by the continued good performance in agriculture, forestry and fishing, manufacturing, real estate, wholesale and retail trade, financial and insurance activities and information and communication. Inflation within single digit Overall month on month inflation declined further to 6.0 percent in December 2014 from 6.1 percent in November 2014 and 6.4 percent in October 2014. On average, the annual inflation rate was 6.9 percent in December 2014 compared to 5.7 percent in December 2013.

Inflation Rate

Source: KNBS and CBK

The decline in overall inflation in December 2014 was largely attributed to lower fuel inflation. Fuel inflation eased from 6.4 percent in November 2014 to 6.0 percent in December 2014 reflecting a fall in the retail price of kerosene, diesel and petrol. Non-food non-fuel inflation also eased from 3.8 percent in November 2014 to 3.7 percent in December 2014. Food inflation however, rose from 7.4 percent in November 2014 to 7.5 percent in December 2014. This reflects the 12-month change in the ‘food and non-alcoholic beverages’ index, which rose from 7.5 percent in November 2014 to 7.7 percent in December 2014. Interest Rates have eased progressively The Central Bank Rate remained at 8.5 percent in December 2014 and the short term interest rates oscillated around the CBR. The average interbank rate averaged 6.9 percent in December and November 2014 from 6.8 percent in October 2014.



The 91-day Treasury bill rate declined to 8.6 percent in December 2014 from 8.7 percent in November 2014 and 8.7 percent in October 2014. The 182 day Treasury bill increased to 9.6 percent in December 2014 from 9.2 percent in November 2014 and 8.9 percent in October 2014 while the 364 day Treasury bill rate averaged at 10.5 percent in December and November 2014 from 10.3 percent in October 2014.

Short-Term Interest Rates

Source: CBK The shilling Exchange rate demonstrates mixed performance

The Kenya Shilling exchange rate demonstrated mixed performance against major international currencies. The currency depreciated against the US dollar to Ksh 90.5 in December 2014 from Ksh 90.0 in November 2014 and Ksh 89.2 in October 2014. Against the sterling pound, the shilling appreciated to Ksh 141.4 in December 2014 from Ksh 142.0 in November 2014 and Ksh 143.7 in October 2014 and against the Euro it appreciated to Ksh 111.5 in December 2014 from Ksh 112.3 in November 2014 and Ksh 113.2 in October 2014. Diaspora remittances, increased foreign investor participation in the NSE and enhanced confidence following successful issuance of the sovereign bond continues to support the Kenya shilling exchange. Kenya Shillings Exchange Rates



Source: CBK

County Fiscal Performance and Challenges Fiscal Performance Revenue Total cumulative revenue amounted to Ksh 4.09 billion in the first half of the FY 2014-2015 compared to the target in the in the approved budget of Ksh 11.4 billion. The local revenue realized in the same period was Ksh 442.8 million accounting for 47.3% of the annual target of Khs 935,307 (revised). Other revenue streams showed a similar trend by falling short of the target for the period. Expenditure Total expenditure in the first half of the FY 2014-2015 amounted to Kshs 2.2 billion against a revised target for the year of Kshs 9.4 billion representing an under spending of Kshs 2.5 billion for the period. Recurrent expenditure in the first half of the financial year amounted to Kshs 1.7 billion against a target of Kshs 5.4 billion for the financial year. This is about Ksh 1 billion below projection for the period (i.e. half the revised budget for the whole year). Development expenditure in the same period was only Kshs 529 million compared to a target of Kshs. 4.1 billion for the whole year. This represented an under-spending by 75% for the period (or 87 % deviation from the revised development expenditure for the whole year). The table below presents the fiscal performance for the period July – December 2014 and the deviations from the approved and revised budget estimates. Table 2.1 Fiscal Outturn July – December 2014



Target Actual ‘000

Dec 2014 ‘000

Deviation Performance

Approved Estimates 2014/15

‘000

Revised Estimates 2014/2015

‘000

From Approved

From Revised

% of Appro

ved

% of Rev. Est

A. TOTAL REVENUE 11,430,815 7,375,290 4,089,998 -299,377 -1,855,444 26.1 25.1 Balances B/F Re-voted in the Budget 2014/15

1,335,293 1,023,878 1,023,878 -311,415 0 23.3 0

Equitable Share of National Revenue

5,207,581 5,153,400 2,616,220 -2,380,832 -2,340,851 45.7 45.4

DANIDA Grants 14,200 14,200 7,100 -7,100 -7,100 50.0 50.0

Level 5 Conditional Grant 0 248,505 0 0 0 - -

KUP Donor Funds 2,030,971 0 0 0 0 - -

Annual Local Revenue Target 2,842,770 935,307 442,800 -2,399,970 -492,507 17.3 47.3

B. EXPENDITURE 10,607,403 9,470,314 2,250,962 -8,356,441 -7,219,352 78.7 76.2 1. Recurrent Compensation to Employees Use of Goods and Services Other recurrent (Loans & Mortgage)

5,626,608 5,371,230 1,721,737 -3,904,871 -3,649,493 69.4 67.9

2. Capital Expenditure

4,980,795 4,099,084 529,225 -4,451,570 -3,569,859 89.3 87.0

Table 2.2 Local Revenue Projection for 2014-15 and Collections as at Dec 2014

Revenue Stream Projected Actual Dec 2014

Deviation % Deviation

Market Fees 149,850,766 38,274,982 -111,575,784 -74.5

Parking Fees 347,700,326 86,937,685 -260,762,641 -75.0

Estate/Institution /Shop/ Stall/ Lock up - 18,096,768 18,096,768 0.0

Land rates 536,604,626 44,972,984 -491,631,642 -91.6

Occ. Permit/Plot transfer/ Ground rent 197,050,112 2,497,227 -194,552,885 -98.7

Signboard, Promotion & Advert 48,935,152 17,293,194 -31,641,958 -64.7

Single Business Permit 93,700,394 9,388,079 -84,312,315 -90.0

Public Health & Medical Levies 3,661,384 3,252,060 -409,324 -11.2

Others 89,762,936 - - -



Sub-total for Main Revenue Streams 1,511,457,002 220,712,979 -1,290,744,023 -85.4

Source: Kisumu County Treasury Table 2.3 Other Revenue Sources

Revenue Stream Projected Actual Dec 2014 Facility Improvement Fund 738,369,690 184,606,042 Vocational/ Training fees - 46,850 Water Sales & lease of water network - 3,424,909 Court Fines & Charges - 498,098 Building Plans - 10,672,921 Survey/ subdivision/ extension - 3,335,490 Cess - 8,755,314 Stock - 1,795,650 Weights and Measures 2,556,945 143,870 Livestock/Agriculture/ Fisheries Levies 20,000,000 2,978,000 Micellaneous 5,866,332 Sub-Total Other Revenues 222,123,476 Total Local Revenue 442,836,455

Challenges The underperformance in revenue collections was largely on account of a combination of over-ambitious and unrealistic projections as can be seen in table below. For example, land rates arrears/penalties where the county budgeted to recover arrears in the tune of Ksh.536,604,626 and Kisumu Urban Projects (KUP) fund disbursement of Ksh. 2,030,971, that did not materialize and others. Administrative challenges in all areas of revenue collections are also key factors behind the revenue shortfall. Tighter administrative measure will be instituted in addition to requirement for regular reporting will enable taking appropriate action to reverse this trend. Inadequate county structure in terms of filling the full establishment and low absorption capacity of the various departments charged with development expenditure. The under-performance in development is attributable to a combination of delays in procurement and inadequate capacity in project management thus leading to low absorption of development budget.



Chapter 3

Fiscal Policy and Budget Framework The 2015 CFSP is geared towards sustained economic growth and effective service delivery to improve the lively hood of the residents of Kisumu County. In the medium term the policy aims at ensuring more public resources are allocated to development expenditure and this will be achieved through;

• A minimum of 30% of the budget shall be allocated to development expenditure with an additional 5% allocated to the Ward development fund.

• The PE ratio which is currently at 38% shall be progressively reduced. • In line with PFM regulations 2014 borrowing will be restricted to strictly fund

development expenditure. The County government of Kisumu since inception has not resorted to short term borrowing to fund its recurrent expenditure and this shall be maintained.

• Increased engagement with the donor community to fund some programs and also fast track development of PPP policy.

• Prudent fiscal risk management. The government will continuously make reference to the national macro-economic forecasts and projections to gauge its implications to the budget.

• Strict adherence to the CRA, SRC and Controller of budget guide lines.

3.1 Fiscal Responsibility Principals

In line with the constitution, the new Public Finance Management (PFM) Act, 2012 and in keeping with prudence and transparent management of public resources, the County Government has adhered to the fiscal responsibility principles in the statutes as follows:

(1) Balanced Budgets are mandatory:

The County Government’s expenditure shall not exceed its total revenue;

(2) Thirty percent of total expenditure is dedicated to development expenditure:

Over the medium term over thirty percent of the County Government’s budget shall be allocated to the development expenditure;

(3) Limit county wage bill to thirty five per cent of the County Government’s total revenue:



The County Government’s expenditure on wages and benefits for its public officers currently exceeds thirty five per cent of the County Government’s total revenue. The County Government will maintain a higher growth in development, operations and maintenance expenditure in order to achieve the minimum personnel expenditure level of 35% by financial year 2017/2018

(4) County debt financing only used for development:

Over the medium term, the County Government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure;

(5) Sustainable debt:

The county’s debt shall be maintained at a sustainable level not exceeding fifteen percent of the County Government’s total revenue as approved by the County Assembly; short term borrowing shall be restricted to management of cash flows and shall not exceed five percent of the most recent audited County Government revenue;

(6) Prudent risk management:

Fiscal risks shall be managed prudently. That is the CEC Member for Finance should outline key areas of uncertainty that may have a material effect on the fiscal outlook and the potential policy decisions they may portend;

(7) Predictable taxes:

A reasonable degree of predictability to the level of tax rates and tax bases shall be maintained, taking into account any tax reforms that may be made in the future.

3.2 Fiscal Structural Reforms

This policy aims at allocating more resources to development expenditure as opposed to recurrent expenditure. This will be achieved through the following reform

(1) Enhancing revenue mobilization; Rolling out the e-revenue, GIS property mapping linkage to revenue collection modules and identifying new revenue streams.

(2) Expenditure rationalization; Freezing new employment and implementing staff rationalization report.



(3) Expenditure efficiency and effective implementation of budget programs; Rolling out of IFMIS to all department, implementing e-procurement, full implementation of G-pay and preparation of budget through IFMIS.

Training, roll out and use of financial operations process manual.

In the financial years 2013/2014 and 2014/2015, despite devolution challenges the government concentrated on its enablers as stipulated in its CIDP (County Integrated Development Programs). In the medium term expenditure focus will now shift to financing the seven pillars of development.

The government current debts and the inherited historical debts from the defunct local authority which have not yet been fully settled shall be profiled in the county debt management strategy paper. This will be finalized once the Transitional authority completes verification of assets and liabilities.

3.3 County Sector Priorities This fiscal strategy paper is focusing on the county government’s seven pillars for sustained growth which are meant to help achieve the county’s vision. The vision for this strategy paper is “economic transformation for the residents of Kisumu County”. The seven pillars are aligned to objectives and aspirations of the Kenya vision 2030, the MDGs and the Second Medium Term Plan 2013-2017 and are anchored on key enablers as the foundation. Agriculture, Livestock and Fisheries

The major services/outputs to be provided in this sector in the MTEF period 2014/15 – 2016/17 include: Agricultural advisory services, Fisheries advisory services, Pest and disease control services, subsidized agricultural machinery services. The objective of the sector is a revival of the agriculture sector within the county to meet needs of food security and value addition The main programmes for the sector aims at: - improving effectiveness and institutional efficiency in service delivery; promoting sustainable land use, environmental conservation and climate change; increasing agricultural productivity and outputs; increasing accessibility to affordable credit and agricultural inputs as well as promoting market access and product development.

Industrialization, Enterprise Development

The Industrialization, Enterprise Development Sector’s objectives are: to facilitate creation of conducive business environment for enterprises to develop and to create enabling policies and infrastructure for industrial development. The main programmes of the department in the MTEF period 2014/15 – 2016/17 will be: - Administration planning and support programme; Cooperative development; Enterprise development and Industrial Development.



This will be achieved by setting up an industrial park in Kisumu and through policy, legal and institutional reforms in the Co-operatives sub-sector. Other initiatives include capacity building of co-operative societies and promotion of co-operative marketing and value addition. Other priorities will include facilitation of appropriate technical skills in deserving MSEs; promotion, formation and registration of MSE sectoral associations; development of a comprehensive data bank of County MSEs and development of business incubation centres and linking them to markets. Commerce, Tourism and Heritage

The sector mission is to offer high quality tourism products, facilities and services as well as an enabling environment for trade and investment to thrive. To achieve this, the department intends to undertake the following programmes: - to provide overall management and central administrative support services to the department; creation of conducive business environment for enterprise development and to facilitate competitive trade; to enhance fair trade practices and consumer protection; to increase the number of tourist arrivals and earnings from tourists Health Services The Department of Health, Kisumu County, intends to deliver its mandate of health services delivery to the people of Kisumu County through preventive, curative and rehabilitative services. In the MTEF period 2014/15 – 2016/17, the department will put more emphasis on promotive and preventive health service delivery through targeted investments in community health. Therefore, the FY 2015/16 budget will give priority to activities aimed at scaling up primary health care services at the community level. However, because of the high disease burden already existing in the County, curative services will also be scaled up. Education, Youth, Culture, and Social Services

The mission of the sector is to provide and promote social equity to the residents of Kisumu County through education, youth and women empowerment, sports culture and child protection. The department will aim at: providing effective and efficient services to departments, organizations and the public in Kisumu County; providing quality pre-primary services to all children including the vulnerable and marginalized in Kisumu County; empowering the youth with appropriate and adequate vocational skills, knowledge and attitudes to realize full potential for individual and national development; showcasing, nurture, developing sporting, cultural and arts talents and facilities to foster national unity and economic empowerment and mainstreaming gender and disability.



Water, Energy and Natural Resources

The department’s mission is to facilitate provision of clean, sustainable, affordable, reliable, secure water and energy for national development while protecting the environment. Working in collaboration with development partners, the department has significantly reduce the average distance families need to travel to a safe water source. People residing in poor settlements access water of low quality as they are not considered viable markets for utility companies or the water service providers (WSPs). Sustainability of water sources and resources as well as availability and access to water and sanitation services are priority goals during this MTEF period. Other priorities of the department include raising the forest cover of the county for provision of wood-fuel, timber and environmental conservation and conservation of the Lake Victoria bio-diversity.

County Assembly

Article 185 of the Constitution provides for the legislative authority of the County Assemblies, vesting the legislative authority of a County and the exercise of that authority in its County Assembly. The Assembly has powers to make any laws that are necessary for, or incidental to, the effective performance of the functions and exercise of the powers of the County Government under the fourth schedule

For effective delivery of its mandate, the Assembly intends to construct a modern building that will provide an ambience conducive for its legislative functions.

The main programmes to be undertaken by the Assembly in the MTEF period 2014/15 – 2016/17 include the following: General Administration and Planning Services; legislation and oversight, services; policy services (Speaker’s office); representation services and public participation.

Physical Planning, Roads and Public Works

The department will institute proper physical planning and infrastructure development that will support development in the County that are geared towards attainment of Vision 2030. The objectives are to: identify, survey and protect public land; prepare Kisumu county spatial plan and local physical development plans for markets, informal settlements and upgrading of houses; ensure all county nodes are planned and building codes observed; alleviate the conditions of dilapidated housing units to habitable levels

In order to achieve this, the department has the following programmes: County Survey Services; Physical planning and housing development; Physical planning services; county housing management Energy and Mining

The department’s mission is to facilitate sustainable provision of affordable, reliable, secure energy and mineral resources for national development. The department aims at providing



efficient services to affiliated bodies/departments; developing, rehabilitating and sustaining energy facilities as well as streamlining and exploring mining activities within the County. To achieve this, the department will implement the following in the MTEF period 2014/15 – 2016/17: Administration; Planning and Support Services; Energy Services; and County Mining and Geology Governance and Administration The mission of Governance and Administration Department is to provide strategic leadership, policy direction and set the agenda for achieving socio-economic and political development of people of Kisumu County. The 2014/2015 budget, was expected to address the following strategic priority areas; improve service delivery through establishment of the sub-county and ward administration structures, address insecurity issues by establishing community policing, effective intergovernmental relations, improve public participation by constantly engaging the citizens most of which were achieved. To continue with its mandate the department will continue with the following programmes in the MTEF period 2014/15 – 2016/17: General Administration and planning services, Management of County affairs & special programmes. Inter-governmental Relations, Communication & Protocol, County public services

Finance and Planning Finance and Planning is composed of the County Treasury and the department of Communication, Planning and Development.

The County Treasury’s role is to provide overall management and general administrative upport services to the Departments. The treasury will ensure maximum revenue collection and management of public financial resources. During the MTEF period of 2014/15-2016/2017 the department expects to introduce electronic system of revenue collection to increase revenue as well as minimize loss of revenue. Audit department will be strengthened to support its oversight role in ensuring that funds are prudently utilized. Among the activities to be undertaken by the treasury are: revenue mobilization, assets management services, management of public financial resources, budget formulation, coordination and management services, and public debt management. The Communication, Planning and Development department will undertake the following: result tracking, monitoring and evaluation system; capacity building and training; formulation of county planning policy; as well as establishment of information and documentation centres. Under communication the department will undertake: The marketing of Kisumu County; communication and citizen information; media relations and investments; and ccorporate social responsibility.



Kisumu City

The City is Charged with the provision of public services to the residents and with the implementation of devolution; the citizens have higher expectations in the areas of provision of better health care, improved urban environment, infrastructure development, Early Childhood Education, among others calling for up-scaling of these services for public satisfaction. To realize this there is need for an improved Revenue Enhancement Plan for the City to meet the rising demand. A successful REP for the City of Kisumu will take into account the following pertinent challenges: Low realization of property taxes (Rates) due to lack of proper GIS linkage with revenue Collection Module and also the lands registry, unreliable rates and SBP data base, lack of adequate staff to supervise/enforce compliance, continued use of unconventional revenue collection methods i.e. manual receipting, human interface with revenue collected thus exposing us to pilferages and linkages, unexploited revenue potentials among others.

The City therefore intends to implement the following programmes in the MTEF period of 2014/15-2016/2017: General Administration and planning Services; Revenue Generation and Management; Early Childhood Education management; Promote Preventive health Care Services; Environmental management Services; urban planning and Development; and Kisumu Urban Project (KUP).



Chapter 4

RESOURCE ENVELOPE AND CRITERIA FOR RESOURCE ALLOCATION

4.1 Determination of Resource Envelope 3.1.1 The resource envelope available for allocation among the spending entities in Kisumu County comprises of:

Share of National Revenue, which finances about 75 per cent; consists of equitable share and provincial & level 5 hospitals.

Locally Collected revenue including property rates, entertainment taxes, levies, fees and charges

Table 4.1 shows that revenues are expected to rise in FY2015/16 by approximately Kshs 110.6 million (1.3 percent increase from 2014/2015 revenues) excluding balances expected to be revoted in FY 2015/16.

• Allocation for Equitable share of National Revenue increased from Kshs 4,550,934,547 in 2013/14 to Kshs. 4,957,071,160 in 2014/15, accounting for 9% increase.

• In the Year 2013, CRA made a recommendation of the vertical share of National Revenue of Kshs 279 billion for the 47 Counties while the National Treasury had a counter proposal of Ksh 248 billion for 2014/2015 Fiscal Year.

• In the end, parliament approved total allocation of Kshs 226 billion to the Counties (43% of the total government revenue based on 2009/10 audited & certified accounts).

• Whereas there is need to be cautious when determining the figure for 2015/2016 Share of National Revenue, the recent agitations for more funds by the Counties through ‘Okoa Kenya Initiative’ and ‘Pesa Mashinani’ provides a favourable political environment for Counties to receive higher allocations.

• CRA has recommended Kshs 279 billion to 47 Counties, of which Kisumu is to receive Kshs 6.35 billion. But guided by prudence, the revenue outlook in 2015/16 is projected as shown below;



Table 4.1: Resource Envelope (Kenya shillings ‘millions’)

2016/2017 2017/2018

Equitable Distribution 6,439.99 6,427.15 7,069.87 7,776.85 (CRA)Locally collected revenue:Market fees 113.24 124.56 137.02 150.72 Parking fees 77.73 85.50 94.05 103.46 Rents 33.68 37.05 40.75 44.83 Land rates 171.90 189.09 208.00 228.80 Single Business Permit 71.50 78.65 86.52 95.17 Building plans 35.26 38.79 42.66 46.93 Liquor Licences - - - - Signboard,promotions etc 67.21 73.93 81.32 89.46 Public Health and others - - - - Others 156.04 171.64 188.81 207.69 Sub-total 7,166.55 7,226.37 7,949.00 8,743.90

Other Revenue Sources:Health:Cost sharing 396.00 435.60 479.16 527.08 Agriculture: - Agricultural mechanization 5.40 5.94 6.53 7.19 veterinary levies 2.76 3.04 3.34 3.67 Fisheries 0.60 0.66 0.73 0.80 Commerce and Industry: - weights and measures - - - - Industrailization/Cooperatives: - Audit and supervisory fees 0.50 0.55 0.61 0.67 Educ,Sports,s/services: - Licences renewals(casinos) 1.26 1.39 1.52 1.68 Funfare licence 1.20 1.32 1.45 1.60 Pool table licences 0.16 0.18 0.19 0.21 ECD Registration - - - - Physical planning/public wks - plan approvals - - - - Total Rev from other source 407.88 448.67 493.53 542.89 GRAND REVENUE TOTAL 7,574.43 7,675.03 8,442.54 9,286.79

Revised Estimates 2014/2015

Projected Estimates 2015/2016

PROJECTIONS

Revenue Streams



4.2 Criteria for Resource Sharing The allocation ceilings to the departments over the medium term are shown in Table 4.2. The resources available are shared using the following criteria:

i. Non-discretionary expenditure: In the recurrent expenditure category, non- discretionary expenditures take the first charge and includes statutory obligations such as salaries, gratuity and pension that are financed by the Kisumu County Government. These expenditures are projected at 39.4 per cent of the total revenue.

ii. Operations and maintenance: This entails Departments/ County entities expenditure for basic operations and maintenance. It accounts for 27.9 per cent of the total estimated revenue. County Health Services and Finance & Planning account for 13.7 per cent while the rest is what is available to be shared among other departments/ entities to fund their programmes.

iii. Overall, recurrent expenditure on non-discretionary, compensation of employees and operations and maintenance account for 67.3 per cent of the total estimated revenue. The balance of 32.7 per cent from the total estimated revenues is the resources available to fund planned development projects/ programmes.

iv. Development expenditures are shared out on the basis of CIDP priorities as well as strategic interventions to boost revenue base and stimulate the economic growth as outlined in the Governor’s blueprint.

o On-going projects: emphasis is given to completion of on-going projects with high impact on poverty reduction, social injustices, employment and wealth.

o Infrastructure projects: with the County Government’s commitment to improve infrastructure, construction of roads, development of water and sanitation network, energy and construction of offices will be given priority.

o Strategic policy interventions: emphasis is on policy interventions addressing food security, industrialization, tourism, technology, sports and talent. The revenue generating assets are also prioritized in order to reverse contraction in revenues from local sources.



Table 4.2: Medium Term Departmental Ceilings, 2014/15 – 2017/18 (Kshs. ‘Million’)

2016/17 2017/18

Agriculture, Livestock & Fisheries Sub-total 308.22 534.38 587.818 646.5998 4.1% 7.0% 7.0% 7.0%

Rec. Gross 298.22 323.08 355.388 390.9268 3.9% 4.2% 4.2% 4.2%

Dev. Gross 10.00 211.30 232.43 255.673 0.1% 2.8% 2.8% 2.8%

Health Sub-total 2,083.20 2,398.42 2638.262 2902.0882 27.5% 31.2% 31.2% 31.2%

Rec. Gross 1,981.20 2,127.99 2340.789 2574.8679 26.2% 27.7% 27.7% 27.7%

Dev. Gross 102 270.43 297.473 327.2203 1.3% 3.5% 3.5% 3.5%

Education, Youth, Sports and Culture Sub-total 357.61 393.83 433.213 476.5343 4.7% 5.1% 5.1% 5.1%

Rec. Gross 94.36 212.65 233.915 257.3065 1.2% 2.8% 2.8% 2.8%

Dev. Gross 263.25 181.18 199.298 219.2278 3.5% 2.4% 2.4% 2.4%

Office of the Governor and County Administration* Sub-total 458.40 424.44 466.884 513.5724 6.1% 5.5% 5.5% 5.5%

Rec. Gross 375.57 324.02 356.422 392.0642 5.0% 4.2% 4.2% 4.2%

Dev. Gross 82.83 100.42 110.462 121.5082 1.1% 1.3% 1.3% 1.3%

Transport & Infrastructure Sub-total 627.3 658.03 723.833 796.2163 8.3% 8.6% 8.6% 8.6%

Rec. Gross 109.21 120.16 132.176 145.3936 1.4% 1.6% 1.6% 1.6%

Dev. Gross 518.09 537.87 591.657 650.8227 6.8% 7.0% 7.0% 7.0%

Finance & Planning Sub-total 2,070.94 576.61 634.271 697.6981 27.3% 7.5% 7.5% 7.5%

Rec. Gross 822.07 474.22 521.642 573.8062 10.9% 6.2% 6.2% 6.2%

Dev. Gross 1,248.87 102.39 112.629 123.8919 16.5% 1.3% 1.3% 1.3%

ICT & Communication Sub-total 43.35 132.97 146.267 160.8937 0.6% 1.7% 1.7% 1.7%

Rec. Gross 34.35 54.43 59.873 65.8603 0.5% 0.7% 0.7% 0.7%

Dev. Gross 9.00 78.54 86.394 95.0334 0.1% 1.0% 1.0% 1.0%

Industrialization & Enterprise Development Sub-total 52.74 170.83 187.913 206.7043 0.7% 2.2% 2.2% 2.2%

Rec. Gross 40.74 45.3 49.83 54.813 0.5% 0.6% 0.6% 0.6%

Dev. Gross 12.00 125.53 138.083 151.8913 0.2% 1.6% 1.6% 1.6%

Kisumu City Sub-total 757.58 986.2 1084.82 1193.302 10.00% 12.8% 12.8% 12.8%

Rec. Gross 757.58 851.23 936.353 1029.9883 10.00% 11.1% 11.1% 11.1%

Dev. Gross 0 134.97 148.467 163.3137 0.00% 1.8% 1.8% 1.8%

Lands, Housing and Physical Planning Sub-total 83.59 166.21 182.831 201.1141 1.1% 2.2% 2.2% 2.2%

Rec. Gross 28.59 31.41 34.551 38.0061 0.4% 0.4% 0.4% 0.4%

Dev. Gross 55.00 134.80 148.28 163.108 0.7% 1.8% 1.8% 1.8%

Tourism, Trade & Heritage Sub-total 128.62 208.00 228.8 251.68 1.7% 2.7% 2.7% 2.7%

Rec. Gross 64.71 68.72 75.592 83.1512 0.9% 0.9% 0.9% 0.9%

Dev. Gross 63.91 139.28 153.208 168.5288 0.8% 1.8% 1.8% 1.8%

Energy and Mining Sub-total 68.61 122.47 134.717 148.1887 0.9% 1.6% 1.6% 1.6%

Rec. Gross 24.21 27.73 30.503 33.5533 0.3% 0.4% 0.4% 0.4%

Dev. Gross 44.40 94.74 104.214 114.6354 0.6% 1.2% 1.2% 1.2%

Water, Environ't & Natural Resources Sub-total 162.93 344.17 378.587 416.4457 2.2% 4.5% 4.5% 4.5%

Rec. Gross 86.83 95.15 104.665 115.1315 1.1% 1.2% 1.2% 1.2%

Dev. Gross 76.10 249.02 273.922 301.3142 1.0% 3.2% 3.2% 3.2%

County Assembly* Sub-total 371.34 558.47 614.317 675.7487 4.9% 7.3% 7.3% 7.3%

Rec. Gross 371.34 408.47 449.317 494.2487 4.9% 5.3% 5.3% 5.3%

Dev. Gross 0.00 150.00 165 181.5 0 2.0% 2.0% 2.0%

TOTAL Total 7,574.43 7,675.03 8,442.53 9,286.79 100% 100.0% 100.0% 100.0%

Rec. Gross 5,088.98 5,164.56 5,681.02 6,249.12 67% 67.3% 67.3% 67.3%

Dev. Gross 2,485.45 2,510.47 2,761.52 3,037.67 33% 32.7% 32.7% 32.7%

* CRA Cealings apply

DEPARTMENTS PROJECTIONS % SHARE OF TOTAL EXPENDITURECategory 2014/15 REVISED

ESTIMATES

2015/16 CEILINGS CFSP

Ceiling 2015/16

PROJECTIONS2014/15 ESTIMATE

S2016/17 2017/18



Annex 1: Medium Term Recurrent Expenditure Cealings, 2014/15 -2017/18 (Kshs. Million)

2016/17 2017/18

Agriculture, Livestock & Fisheries Gross 298.22 307.08 337.79 371.57 5.9% 5.7% 5.7% 5.7%

P/E 192.59 206.13 226.74 249.42 3.8% 3.8% 3.8% 3.8%

O&M 105.63 100.95 111.05 122.15 2.1% 1.9% 1.9% 1.9%

Health Gross 1,981.20 2,127.99 2340.79 2574.87 38.9% 39.6% 39.6% 39.6%

P/E 1,321.31 1,404.29 1544.72 1699.19 26.0% 26.1% 26.1% 26.1%

O&M 659.89 723.70 796.07 875.68 13.0% 13.5% 13.5% 13.5%

Education, Youth, Sports and Culture Gross 94.36 194.65 214.12 235.53 1.9% 3.6% 3.6% 3.6%

P/E 60.56 64.82 71.30 78.43 1.2% 1.2% 1.2% 1.2%

O&M 33.8 129.83 142.81 157.09 0.7% 2.4% 2.4% 2.4%

Office of the Governor and County Administration* Gross 375.57 392.02 431.22 474.34 7.4% 7.3% 7.3% 7.3%

P/E 104.23 111.56 122.72 134.99 2.0% 2.1% 2.1% 2.1%

O&M 271.34 280.46 308.51 339.36 5.3% 5.2% 5.2% 5.2%

Transport & Infrastructure Gross 109.21 120.16 132.18 145.39 2.1% 2.2% 2.2% 2.2%

P/E 59.93 64.14 70.55 77.61 1.2% 1.2% 1.2% 1.2%

O&M 49.28 56.02 61.62 67.78 1.0% 1.0% 1.0% 1.0%

Finance & Planning Gross 790.29 508.22 559.04 614.95 15.5% 9.5% 9.5% 9.5%

P/E 137.04 146.68 161.35 177.48 2.7% 2.7% 2.7% 2.7%

O&M 685.03 361.54 397.69 437.46 13.5% 6.7% 6.7% 6.7%

ICT & Communication Gross 34.35 72.43 79.67 87.64 0.7% 1.3% 1.3% 1.3%

P/E 10.57 21.31 23.44 25.79 0.2% 0.4% 0.4% 0.4%

O&M 23.78 51.12 56.23 61.86 0.5% 1.0% 1.0% 1.0%

Industrialization, Energy & Enterprise Development Gross 64.95 80.02 88.02 96.82 1.3% 1.5% 1.5% 1.5%

P/E 24.70 26.43 29.07 31.98 0.5% 0.5% 0.5% 0.5%

O&M 40.25 53.59 58.95 64.84 0.8% 1.0% 1.0% 1.0%

Kisumu City Gross 757.58 851.23 936.35 1029.99 14.9% 15.8% 15.8% 15.8%

P/E 662.63 709.23 780.15 858.17 13.0% 13.2% 13.2% 13.2%

O&M 94.95 142.00 156.20 171.82 1.9% 2.6% 2.6% 2.6%

Lands, Housing and Physical Planning Gross 28.59 31.41 34.55 38.01 0.6% 0.6% 0.6% 0.6%

P/E 14.53 15.55 17.11 18.82 0.3% 0.3% 0.3% 0.3%

O&M 14.06 15.86 17.45 19.19 0.3% 0.3% 0.3% 0.3%

Tourism, Trade & Heritage Gross 64.71 68.73 75.60 83.16 1.3% 1.3% 1.3% 1.3%

P/E 25.63 27.43 30.17 33.19 0.5% 0.5% 0.5% 0.5%

O&M 39.08 41.3 45.43 49.97 0.8% 0.8% 0.8% 0.8%

Water, Environ't & Natural Resources Gross 86.83 98.15 107.97 118.76 1.7% 1.8% 1.8% 1.8%

P/E 44.50 47.63 52.39 57.63 0.9% 0.9% 0.9% 0.9%

O&M 42.33 50.52 55.57 61.13 0.8% 0.9% 0.9% 0.9%

County Assembly* Gross 371.34 520 572.00 629.20 7.3% 9.7% 9.7% 9.7%

P/E 168.24 180.07 198.08 217.88 3.3% 3.4% 3.4% 3.4%

O&M 203.10 339.93 373.92 411.32 4.0% 6.3% 6.3% 6.3%

TOTAL Gross 5,088.98 5,372.09 5909.30 6500.23 100.0% 100.0% 100.0% 100.0%

P/E 2,826.46 3,025.27 3327.80 3660.58 0.56 0.56 0.56 0.56

O&M 2,262.52 2,346.82 2581.50 2839.65 0.44 0.44 0.44 0.44

* CRA Cealings apply

PROJECTIONS

DEPARTMENTS Category 2014/15 REVISED

ESTIMATES

2015/16 CEILING

S

PROJECTIONS % SHARE OF TOTAL EXPENDITURE

2016/17 2017/182014/15

ESTIMATES

C S Ceiling 2015/16

fiscal strategy paper - kisumu · this is the second fiscal strategy prepared by the county paper...

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