Treasury in Budget plan to abolish CDF

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Agnes Mukiri do her studies at the newly constructed Isiolo library on March 24, 2012. The facility is among CDF funded project to a tune of Sh3million. The CDF board was in the region in the weekend touring the projects but they were constrained within Isiolo town due the ongoing community conflicts in the area. Photo/JOSEPH KANYI 

By ALPHONCE SHIUNDU ashiundu@ke.nationmedia.com
Posted  Tuesday, April 17  2012 at  22:30

IN SUMMARY

• Members of Parliament to have no role in the allocation of cash at the county level

The government wants to abolish the Constituency Development Fund and replace it with a new kitty which conforms to the Constitution.

The proposal to replace the popular fund forms the core of the Budget Policy Statement tabled on Tuesday in the House.

Brought by Finance minister Njeru Githae, the policy also recommends that MPs stop being patrons of the fund that replaces CDF.

MPs have been fighting to retain control over CDF – one of the avenues through which they fulfilled their campaign promises — ever since the Constitution took effect 20 months ago.

“The participation of MPs in the allocation of resources may be inconsistent with the Constitution,” the Treasury said, noting that according to the law the governor and his deputy are the bosses at the county.

The Treasury anticipates opposition from MPs, but states that once there’s agreement, a decision will be made whether to have the equivalent of CDF included in the money to counties, or if it will be sent to the constituencies as a “conditional grant” (to be used specifically for a particular project in a given constituency).

The government hopes to spend Sh1.152 trillion in the next fiscal year, of which Sh370.2 billion will be pumped into building of roads, the standard gauge railway and geothermal power plants. The bulk of the budget will be sourced from tax revenues estimated at Sh936.5 billion.

The total cost for the devolved governments is also pegged at Sh160 billion, but this does not include the “one-off expenditures for setting up the necessary infrastructure in counties in preparation of the new devolved system of government”.

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The Treasury has asked ministries to do determine the functions they will devolve and the cost for that, so that it can estimate the cost of devolution.

The Treasury says given the complexities of rolling out the new structures, “the earliest the county governments can take full charge” in making their own budget will be June 2013.

“To avoid the disruption of service delivery to counties, the national government is expected to continue performing the functions that have been assigned to the counties until such a time, not exceeding three years, when the county governments are able to take over their functions,” it says.

The budget levels for 2012/2013 are almost the same as those of the current financial year, which lapses in June. The Treasury said that “one-off items” such as the military incursion in Somalia were no longer the government’s responsibility, after the Kenyan troops joined the African Union Mission in Somalia.

The BPS also revealed that the spending appetite in the government had increased by Sh175 billion following the push for better pay by government employees like doctors, nurses and other civil servants. The implementation of the Constitution – setting up of commissions — and Operation Linda Nchi, also increased demands on the Treasury.

But amid this, the government failed to spend Sh101.6 billion. This is because the old story of poor planning, mind boggling procurement, a long convoluted process in getting donors to issue the “no objections” and sometimes ministries “under-reporting’ their actual expenses.

The cost of the next elections is estimated at Sh13.5 billion, but the figure could be raised once the Independent Electoral and Boundaries Commission completes the budget for the polls.

About 20 million Kenyans are expected to vote for six offices: president, governor, MP, senator, county women representative, and the County Assembly representative. 
Parliament’s Budget Office had put the cost of the elections at Sh15 billion.

In the Budget Policy Statement, the Treasury has also earmarked Sh13 billion for Constitution Implementation, and added Sh6.7 billion for grants to marginalized areas. The rollout of new administrative structures will suck Sh6 billion out of the Exchequer.