BUDGET STATEMENT FOR THE FISCAL YEAR 2016/2017 BY CHARLES K. MUGE EXECUTIVE COMMITTEE MEMBER FOR FINANCE, ECONOMIC PLANNING AND ICT.
THE COUNTY GOVERNMENT OF NANDI
BUDGET STATEMENT FOR THE FISCAL YEAR 2016/2017
(1ST JULY 2016 – 30TH JUNE 2017)
“ACHIEVING EQUITABLE SOCIAL AND ECONOMIC DEVELOPMENT IN NANDI COUNTY”
CHARLES K. MUGE EXECUTIVE COMMITTEE MEMBER FOR
FINANCE, ECONOMIC PLANNING AND ICT.
21ST JUNE 2016
The Hon. Members of the County Assembly,
Residents of Nandi County,
Distinguished guests present,
Members of the 4th Estate,
Ladies and gentlemen.
BUDGET STATEMENT DELIVERED TO THE COUNTY ASSEMBLY, NANDI COUNTY GOVERNMENT, ON THIS DATE OF 21ST JUNE 2016, HIGHLIGHTING THE BUDGET POLICY AND REVENUE RAISING MEASURES FOR FISCAL YEAR 2016/2017.
INTRODUCTION AND OVERVIEW
Mr. Speaker, it is a great honor and privilege to present to this honorable house the highlights of the fourth budget, since the creation of the county government, for the fiscal year 2016/17 since our first budget of 2013, in accordance to section 130 (1) and (2) of the Public Finance Management Act, 2012 and Standing Order No. 206 of the County Assembly.
Mr. Speaker, let me, with enormous gratitude, thank the entire honorable house and especially the Budget and Appropriation Committee, under the able stewardship of Hon. John Keter, for the constructive engagement, synergy and time devoted during the
Assembly review of the Budget estimates that we presented earlier on as well as your support in the current financial year.
Mr. Speaker, the budgeting process is a subtle process that involves various stakeholders and procedures. Let me appreciate the County Executive Committee members and the Chief Officers on the programs to be undertaken by their respective departments which is forming the solid foundation of this policy statement which is in line with the programme based approach to budgeting .I also acknowledge my Finance and Economic Planning staff for their contribution and tireless efforts in consolidating this budget. As stipulated under section 125(2) of the Public Finance Management Act, 2012 and section 87 of the County Governments Act, my appreciation goes to the people of Nandi for their constructive input to this budget during the Public Participation forums which were held at Ward level.
Mr. Speaker, the Government has been properly structured by setting up appropriate structures and policies that are driven by the imperative service delivery. As a Government, we are all rightfully challenged to work and show results to the people of Nandi through development programs/projects. We are therefore petitioned to re-evaluate our strategies and to set more comprehensive and focused plan of action. We also need to reengineer all our systems and establish a new and better focus so that we can exploit our competencies, capabilities and resources to deal with our socio-economic constraints.
Mr. Speaker, the County Government is more than any time before, ready to work tirelessly to build a future by empowering our populace whereby all people can satisfactorily take pride and equitably share the accruing benefits. Hence, the budget theme “Achieving equitable social and economic development in Nandi County”
Mr. Speaker, various departments, in concurrence with the executive committee, under the leadership of H.E the Governor did propose and agree on a set of programs that will guide our financial interventions in the financial year ahead.
Mr. Speaker, the broad development policies of the County Government, as captured in the County Integrated Development Plan (CIDP) as echoed in the Governor’s state of the County address, does provide a clear and progressive approach to reignite an inclusive growth and trend the County upward to higher, better and promising level of prosperity.
Mr. Speaker, we have prepared the FY 2016/17 Budget against a backdrop of slower global growth and increased uncertainty which has lead to slowed pace of economic growth in many countries. This is due to:
-The impact of lower commodity prices on commodity importers is less positive than expected and commodity exporters have to adjust their economies in a more difficult environment.
World growth, therefore, slowed from 3.4 percent in 2014 to 3.1 percent in 2015 and is estimated to stabilise at 3.2 percent in 2016.
Growth in sub-Saharan Africa weakened from 5.1 percent in 2014 to 3.4 percent in 2015 and is projected to decline further to 3.0 percent in 2016. The slowdown primarily reflects the decline in commodity prices as well as lower demand from China, the largest single trading partner of Sub-Saharan African countries. In addition, the region’s frontier markets are adversely affected by tighter global financing conditions. Sub-Saharan African region growth is projected to pick up to 4.0percent in 2017, driven by sustained infrastructure investment; responsive service sectors, strong agricultural production, rebound in commodity prices and timely policy implementation.
Mr. Speaker, on the domestic front, our economy remains resilient and registered relatively strong growth amidst the global economic slowdown, thanks to the ongoing infrastructural investment, increased investor and consumer confidence and improved agricultural production.
Today, Mr. Speaker, Kenya’s growth is relatively much stronger at 5.6 percent in 2015 and it’s classified as among the top fastest growing economies in the world. Kenya is ranked as one of the 7 best countries for investments and the second biggest market for retail investors in Africa. In 2016, the economy is anticipated to grow by 6.0 percent and by 7.0 percent in the medium term.
Therefore, the 2016/17 budget in line with the Medium Term Expenditure Framework (MTEF) allocates resources to priority areas aimed at impacting livelihoods of the greater population to address poverty and unemployment challenges mainly:
a) Creating a business-friendly environment that encourages innovation, entrepreneurship and growth through mass infrastructural development.
b) Boosting quality of health care services in our health facilities.
c) Ensuring increased access to water through expansion of the existing water schemes, purification and desalination of water sources and development of water storage capacity in form of construction and supply of tanks and finally ensure sanitation improvement.
d) Attainment of better levels of food security through diverse investments in agriculture.
e) Ensuring fiscal prudency and efficiency in public expenditure in order to have value for our money.
f) Promoting the quality of education and training through construction and equipping of ECD centres and vocational training centres.
Through such strategic interventions, Mr. Speaker, we will empower our people thereby bailing them out of poverty. We are therefore, in this coming financial year, cognizant with the thematic preoccupation of this budget, consciously taking care of the poor and the vulnerable, the youth, and women as well as emerging entrepreneurial entities as the basis of achieving these development objectives.
Mr. Speaker, in relation to many good programs we would admire to execute, we are facing serious budget constraints, namely:
– Slow and technical use of automation in finance management (IFMIS) – especially e-procurement and unstable network strengths. I propose that continuous capacity building, provision of enough infrastructures and up-scaling of the network would be necessary.
– Delayed exchequer releases from the National treasury to the County treasury. I have proposed measures to address this by sticking to the stipulated credit period on our suppliers, while at the same time liaising with the National Treasury to make timely exchequer releases.
– Public expenditure pressures especially on recurrent expenditure thus limiting the continued funding for development expenditure.
– Unclear devolved functions due to lack of specific guidelines on devolved functions which majorly affects payroll management.
Through this budget therefore, Mr. Speaker, we will continue to focus on implementing strategies that are not only addressing these challenges but also improving the livelihoods and creating wealth for our people.
Budget Estimates for FY 2016/2017
Mr. Speaker Sir, allow me to now turn to the financial projections for FY 2016/2017 budget. Our development agenda is to build a foundation for poverty reduction, improved livelihood, job creation and consequently wealth creation.
The total proposed expenditure estimates for F/Y 2016/2017 amounts to Ksh. 6.4 Billion comprising of Kshs.3.90 Billion for recurrent and Kshs 2.5 Billion developments. This translates to 61% recurrent and 39% development. Personnel Expenditure translates to 30%, operations 27.8% and maintenance being 2.2% of the total Estimates.
Mr. Speaker, we intend to implement our budget of the Kshs.6.4 Billion using our county revenue which is projected at Kshs.273.28 Million, National Government Transfers of Kshs 5.13Billion, capitalization of unspent recurrent and pending bills of about Kshs 822 Million and other grants to the county that amounts to Kshs 378.35 Million.
Mr. Speaker Sir, to achieve our revenue targets the County is revising her Valuation roll and shall impose property rates as well as other tax, user fees and charges as envisaged in the Finance Act 2015 as approved by the County Assembly. The Government has also put in place a revenue collection and management system which is aimed at improving our collections as well as curbing on revenue leakages.
Mr. Speaker Sir, I will now highlight the various programmes we are going to implement in various sectors as well as share with the Honorable Members the tax measures in the FY 2016/2017.
Making water accessible to all households
Mr. Speaker Sir, as Honorable Members may recall, this Government came to power on a strong promise to provide Nandi County People with adequate water for both domestic and agricultural purposes. To address this challenge Mr. Speaker, the government has rolled out a comprehensive water programme which entails completion and extension of the Water Supply System in the County. As part of this process, the government has therefore put in place Ksh. 350 Million in order to ensure access to clean and piped water to all residents of Nandi.
Enhancing Access to Quality Health Care Services for all
• Mr. Speaker Sir, we have made tremendous progress in the last three years on health sector namely; provision of ambulances in every sub- county hospital, provision of drugs in our health facilities as well as the ongoing programme of construction and rehabilitation of dispensaries and health centres in every ward. It is worth noting also that the Kapsabet County Referral and Nandi hills hospitals are among our facilities that benefited from the National government modern medical equipment and the related services which includes; Theatre Equipment, MRI/Renal and Radiology Equipment among others. These will go a long way in enhancing the quality of the services in the sector.
However in this financial, we experienced a health workers’ industrial action dispute which negatively affected service delivery at our health centres. Mr Speaker, am happy to report that the relevant arms of government are working to ensure that an amicable and lasting solution is arrived at to end the industrial action. In order to improve this sector, this budget will provide for employment of more health workers so as to reduce the doctor:patient ratio in Nandi. Despite the strides we have made in providing health care, more still needs to be done to achieve the WHO standards of a hospital in every 5 kilometers. In this regard therefore, to further support the health sector in the 2016/2017 budget, I am proposing:
• A total of Ksh. 313 Million for Acquisition of Drugs, non-pharmaceuticals and lab reagents.
• Ksh. 27 Million for Construction of a morque at Nandi hills hospital.
• Ksh.165 Million for Construction of health facilities including dispensaries across the County.
• Ksh.10 Million for Refurbishment of existing health facilities
• Kshs.7Million for purchase and improvement of medical equipment.
Facilitating Infrastructure Development
Mr. Speaker Sir, developed infrastructure is a key pre-requisite to sustained economic development due to the linkages it provides to other sectors in the economy. In this regard therefore, Mr Speaker, this sector requires substantial resources to expand the road network, rehabilitate the existing roads and maintain all the existing infrastructure facilities. This will in-turn promote competitiveness, reduce cost of transport, open up the rural areas for ease movement of human capital, agricultural inputs, products and services and more inclusive growth of our economy for employment creation and poverty reduction.
Mr Speaker Sir, in the last financial year we committed substantial resources to this sector to purchase roadwork equipment which includes: excavators, graders and tippers this has gone a long way in ensuring sustainable roadwork maintainance, rehabilitating and tarmacking of roads which will lead to improved road network within the county. To further enhance development of our infrastructure I am proposing in this budget a
• Ksh. 300 Million for Acquisition of more plant and equipment,
• Ksh. 150 Million for construction of feeder roads
• Ksh.90 Million for Construction of tarmac roads/cabro block paving.
• A further Ksh.153 Million has been provided for routine maintenance of our existing roads.
• KSh.20 Million for street lighting
• KSh.30 Million for acquisition of land for the dump site in the County.
Disaster management and mitigation
Mr. Speaker, the County Government has purchased 2 (two) Fire Engines capable of not only fighting fire, but also have the capacity of rescue operations on collapsed buildings through enhanced additional equipment. The engines were delivered in the month of June 2016 and are now operational. In order to ensure the fire engines operate effectively, I have allocated KSh.10 Million for the construction of a fire station to house the fire machines.
Creating conducive Business environment
Mr. Speaker, Investment and Trade are key drivers of economic growth given their potential for wealth and employment creation as well as poverty reduction. As such, the Government in the current budget has rolled out a programme of constructing Market shades, boda boda shades and toilets to create an enabling business environment for small scale businesses which will continue in FY 2016/17.
Mr Speaker Sir, we will endeavor to ensure a sustainable and vibrant environment for investment through;
• Promotion of fair trade practices through consumer awareness, calibration and verification of weight and measures equipment.
• Promotion of private sector development through enterprise and entrepreneurship development
• Construction of Jua Kali shades.
Mr Speaker Sir, to further underscore the importance the Government attaches in creation of conducive business and investment environment, in the FY 2016/17, I have proposed a total of:
• Ksh. 66 Million for the following projects;
– Market land acquisition and fence at Kiboswa market,
– Construction of modern kiosks at Mosoriot,
– Construction of Industrial shades at Kobujoi and Nandi Hills,
– Completion of Amani market in Mosop,
– Construction of Meteitei modern kiosks,
– Development of Mutwot business resource centre,
– Construction of Kabiyet bodaboda shades and
– Completion of purchase of an auction yard at Chepterit among others.
Ensuring Food Security
Mr. Speaker Sir, agriculture sustains not only our economy but also the livelihood of our people especially in the rural areas. Majority of our people in rural areas are still food insecure and live in poverty. Investing in this sector Mr. Speaker, will lead to increased productivity, increased food supply, reduced food related prices, bring down the cost of living as well as create employment and overall rural development in the County. In this Financial year, the government through the relevant ministry has rolled out the Subsidized AI services programme to improve on Milk productivity as well as the animal breeds. Land size continues to be smaller due to land subdivision owing to population growth yet food is a necessity, the county department in partnership with Ministry of Agriculture has imported dopper rams and goats known for high milk yield to reduce high dependency on cow milk which is decreasing yearly.
Mr Speaker Sir, we will continue to invest in this sector through development of Kaimosi Agricultural Training Centre and further put in place structures to tap on the potential of livestock, agriculture and fisheries development. Mr Speaker to fast track the implementation of these projects, I have allocated;
• A total of Ksh.19 Million to Kaimosi ATC for Purchase of a tractor, construction of principal’s house, installation of radio WiFi, renovation of conference hall, completion and renovation of dairy units, extension of tea farms and establishment of coffee farm at Kaimosi Agricultural Training Centre.
• Ksh.30 Million to support agricultural extension services through purchase of motorbikes, soil mapping, irish potato production, promotion of green house farming among other activities in the agriculture sector.
• Ksh. 174 million for veterinary services that includes; A.I services, purchase of Vaccines and sera, construction of new cattle dips and supply of acaricides.
• Ksh.12 Million for fisheries activities that include hatchery expansion, green house development, deep freezers and purchase of motor bikes to promote fish farming in Nandi County.
Promoting tourism, Culture, Sports and Cooperative Development
Mr. Speaker, the economic effects of tourism extends well beyond the core sectors. The trickledown effect is an instant economic gain for the local people through the spending of the tourists. To ensure competitiveness and attraction of both domestic and international visitors, I am proposing a total of Ksh.30 Million for implementation of the following programs in support of the sector:
• Improvement of coffee factories and pulpers at Ksh.8 million
• Construction of a Conference/Cultural centre at Ksh. 10 million and
• Ksh.7 Million for branding of Nandi County as a Tourist destination.
• Kshs.5 Million for dairy products value addition.
Mr Speaker, we have managed to supply 25,000 coffee seedlings to support our farmers to promote coffee farming and strengthen our cooperatives. This initiative Mr Speaker shall continue in the coming years.
Mr Speaker Sir, development and support of sports remains a key priority of government so as to nurture the talent of our youth. Nandi being the source of champions will this year host the Shujaa Sevens (Kenya’s national rugby team) in Nandi hills as they prepare for Rio De Janeiro Olympics 2016.Mr. Speaker, to further reaffirm our status as the champions powerhouse, you will note that the Kapsabet Stadium will in this year enter its phase two in construction and once its complete, it will be rated as the best stadium outside Nairobi in Kenya. To further demonstrate this fact, the stadium is currently hosting the Kenya Volleyball Championships with renown teams like GSU, Kenya Pipeline, Kenya Prisons amongst others participating with most teams composed of players who are sons and daughters of this great county. This implies that our stadiums have to be developed to meet the minimum world standards so as to attract more of these sporting activities. For this reason Mr. Speaker, in this budget
• Ksh. 57 Million has been set aside for completion of Kipchoge Stadium at Kapsabet,
• Ksh. 19 Million for Nandi Hills Stadium Phase II
• Ksh. 3 Million has been allocated for construction and equipping of Kaptumo resource centre and
• A further Ksh.19 million for construction and equipping of other sporting facilities in the county.
Promotion of Education and Youth Empowerment
Mr. Speaker Sir, the Government aims at providing quality early child hood development education as well as quality skills for our youth through the youth polytechnics and training centers. In a bid to support and build the capacity of our polytechnics, Mr Speaker Sir,vou remember in my last year’s budget statement I indicated that we were to handover all boarded vehicles to youth polytechnics for their practicals. however this was not possible due to the massive exercise that was being carried out by the Transition Authority of enumerating all the county and national government assets,we are following up with national treasury to be handed over the county assets register to enable us transfer all boarded vehicles to our training institutions.
– As you are all aware, we have not been able to disburse our bursary to the needy students but I want to thank this honorable house for passing the requisite legislation and am happy to report that the government will be disbursing the bursaries for 2015/2016 F/Y in the within one month.
-For the Financial Year 2016/17 budget, I have allocated funds for the following projects:
• Construction of ECD class rooms at Ksh.75 Million
• Construction and equipping of existing Vocational training Centres at Ksh. 55 Million
Social protection for Vulnerable groups.
Mr. Speaker, as a government that deeply cares for its vulnerable in the society we have set aside Ksh 3 Million for the construction of an Orphaned and Vulnerable Children rescue Centre.
In additional Mr Speaker, to ensure that the 30% government tenders goes to the youth, women, and people living with disability, the relevant department intends to support the groups acquire certificates at the county level in line with the constitution to ensure equity in award of tenders to the marginalized and minority groups.
In this financial year while keen in observing the 30% rule, we allocated most ECD construction and cattle dips contracts to these groups.
As an affirmative action, the county government in the coming financial year,will be taking a deliberate effort to exempting the persons living with disabilities from payments of fees and charges to the county..
Revenue Enhancement and Management
Mr. Speaker Sir, for the Government to continue improving the quality of services provided to its citizens, it needs to generate her internal revenue for sustainable development. In these tough economic times, strong revenue base and consequent management is fundamental to the financial sustainability of the County Government. The reality is that we are faced with development backlogs and poverty.
The expenditure required to address these challenges will inevitably always exceed available funding; hence difficult choices have to be made in relation to our fees and charges and balancing expenditures against realistically anticipated revenues. We are committed to getting the most we can out of revenue sources that are legally and administratively available. Towards this, the government has, put in place a wide ranging series of improvements to our policies, procedures, staffing and organizational structure to maximize on our local revenue.
In a bid to ensure effective and efficient revenue collection, Mr. Speaker, we have automated all our revenue collection and now have the Nandi County Revenue Collection and Management System. This is a Revenue Mobilization tool that provides realistic information on the revenue since it’s a real time process. It also supports a full range of business process on revenue mobilization ranging from billing, licensing applications and renewals, permits issuance, penalties etc. and the tracking of the same and this is expected to ease the way of doing business in the County.
In the long run, Mr Speaker, Revenue automation will seal revenue leakages and carry over frauds while reducing the human resource costs that hampers the revenue collected as well as improving efficiency.
Further, Mr.Speaker Sir, the system supports payment through multiple electronic payment options such as, mobile money from major mobile money payment platforms and bank agency/branch network.
In the current financial year, we have awarded a tender to a consultancy firm to carry out the Phase 1 of revision of Valuation Roll to cover: Kapsabet & Nandi hills towns, Leasehold and government property as a measure to enhance our revenue base. Further, I have allocated Kshs.45 Million for phase 11 to cover other areas within the County.
-Mr Speaker, the government through my ministry intends to waive interest and penalties on land rates defaulters. The requisite bills are currently at the Government printer for publishing. This will give us the legal framework to undertake the exercise and the necessary approvals shall be sought to undertake the exercise. I want to appeal to the people of nandi to take advantage of this waiver once announced and to ensure prompt payments of their land rates going forward.
Mr Speaker Sir, I will in due course be issuing policy guidelines to the County treasury that will inform legal action that shall take into account the aforementioned measures.
In conclusion Mr. Speaker, this Government under the Leadership of H.E Dr. Cleophas Lagat has succeeded in putting in place the foundation for faster and more inclusive growth in the years ahead. This is therefore a budget of the people of Nandi County .It is a budget that responds to the concerns of all our citizens. I therefore urge Honorable members and all the citizens of Nandi County to join us in building the County we want.
Finally Mr. Speaker, I once again express my utmost appreciation to all the people of Nandi who responded to my call for “budget submission “with insightful suggestions on how to move the county forward. I would also want to thank all the Honorable members for playing their oversight role, their co-operation, support and timely approval of budget. In the same vein Mr. Speaker, my gratitude goes to all County Executive Committee Members and their Chief Officers who collectively own this budget and the programmes to be implemented.
Mr Speaker, I submit to this house the budget estimates for implementation of the above proposal. I am requesting your approval of the above proposals and policies in order to facilitate the finalization and implementation of the Fiscal year 2016/2017.
I humbly request the Honorable Members of this Honourable County Assembly to interrogate the attached estimates and to approve them so that together, we can embark on our journey to change the livelihoods of our people as we make Nandi County the great County.
God Bless Nandi, God Bless Kenya.