MURANGA COUNTY GOVERNMENT BUDGET REVIEW AND OUTLOOK PAPER SEPTEMBER 2017 Foreword This is the fourth Murang’a County Budget Review and Outlook Paper. It presents us with an opportunity to asses and review the budget implementation for the year 2016/2017, highlight on the current year budget implementation while at the same time setting the base for the next financial year budget(2018/2019). A lot of effort was expended in the last Government to ensuring that we deliver the mandated services to our residents. Key to effective service delivery is the ability to develop solid plans, mobilize the necessary financial resources and implement the budgets cost effectively. The last three County budgets have enabled us make notable strides in the implementation of our integrated development plan but not without challenges. Realization of the budgeted revenues has remained elusive due to delayed funds releases by the national treasury to the extent that full implementation of the budget within a financial year has remained difficult. It is our hope that timely disbursement of the current financial year equitable share will be made to facilitate the completion of new budgeted programmes and the critical ongoing ones. We have also made concrete strategies to ensure a significant increase in local revenue collection in line with the budget. DAVID WAKABA WAWERU COUNTY EXECUTIVE COMMITTEE MEMBER - FINANCE ICT AND ECONOMIC PLANNING 1 Contents Foreword ................................................................................................................................................ 1 Abbreviations and Acronyms ........................................................................................................... 3 BACKGROUND ..................................................................................................................................... 3 Legal basis for the preparation of the Budget Review and Outlook Paper ................................... 3 I. INTRODUCTION ............................................................................................................................ 4 OBJECTIVES OF CBROP ................................................................................................................... 4 II. REVIEW OF FISCAL PERFORMANCE IN 2016/2017 ............................................................... 5 A. Overview ..................................................................................................................................... 5 B. 2016/2017 Fiscal Performance ..................................................................................................... 5 EXPENDITURE ...................................................................................................................................... 9 III. COMPLIANCE OF FY 2015/2016 REALIZED BUDGET TO THE FISCAL RESPONSIBILITY PRINCIPLES ...................................................................................................... 10 iv. IMPLEMENTATION OF 2016/2017 BUDGET .......................................................................... 10 UPDATED ECONOMIC AND FINANCIAL FORECASTS ............................................................ 12 UPDATED FINANCIAL FORECASTS ............................................................................................. 14 MEDIUM TERM FISCAL FRAMEWORK ........................................................................................ 14 Risks to the Outlook. ......................................................................................................................... 14 V. RESOURCE ALLOCATION FRAMEWORK 2018/2019 .......................................................... 15 A. (I) 2017/2018 Budget ................................................................................................................... 15 (II) Adjustment to the 2017/2018 Budget ...................................................................................... 25 A. MEDIUM TERM EXPENDITURE FRAMEWORK ............................................................... 25 V. 2018/2019 BUDGET FRAMEWORK ........................................................................................... 26 PROPOSED FINANCIAL RESOURCES ALLOCATION CEILINGS ......................................... 27 CONCLUSION ...................................................................................................................................... 28 2 Abbreviations and Acronyms MFET-Medium Term Expenditure Framework PFM-Public Finance Management CFSP- County Fiscal Strategy Paper IFMIS- Integrated Financial Management Information System CIDP- County Integrated Development Plan BACKGROUND Legal basis for the preparation of the Budget Review and Outlook Paper The Budget Review and Outlook Paper (BROP) is prepared in accordance with section 118 of the Public Finance Management Act, 2012. The law states that: 3 1. The county Treasury shall prepare and submit to county executive for approval, by 30th September in each financial year, a BROP which shall include: a. Actual fiscal performance of the previous financial year compared to the budget appropriation for the year. b. Information on how actual financial performance for the previous financial year may have affected compliance with the fiscal responsibility principles or the financial objectives in the latest Fiscal strategy paper and c. The reasons for any deviation from the financial objectives together with proposals to address the deviation and the time estimated to do so. 2. County Executive shall consider the BROP with a view to approving it , without amendments, not later than fourteen days after its submission. 3. Not later than seven days after the BROP has been approved by County executive, the County Treasury shall: a. Submit the paper to the county Assembly and ; b. Publicize the paper not later than fifteen days after laying the paper before the county assembly. I. INTRODUCTION The Budget Review and Outlook Paper (BROP) is a key document in the budget process it is meant to give a review of 2016/2017budget and as well present an outlook on the budgeted items in the 2018/2019 budget. OBJECTIVES OF CBROP 1. Review the implementation of 2016/2017 budget 2. Highlight on the progress made in implementing 2017/2018 budget 3. Give indicative sector ceiling for 2018/2019budget 4 II. REVIEW OF FISCAL PERFORMANCE IN 2016/2017 A. Overview The year 2016/2017 has seen the county implement numerous programme as per departmental strategic plans/CIDP and annual plans. B. 2016/2017 Fiscal Performance Local Revenue The total revenue collected from local sources was Ksh 617.6 million against a budgeted target of Kshs 850 million. The table below presents a breakdown of the total revenues as per the approved budget. REVENUE SOURCE 2014/2015 2015/2016 VARIANCE LICENCES 91,352,399 101,037,870 9,685,471 LAND RATES 43,097,517 48,341,146 5,243,629 MARKET FEES 44,983,309 50,231,815 5,248,506 PENALTIES 4,560,415 2,701,982 -1,858,433 BUILDING MATERIAL CESS 72,851,539 70,653,549 -2,197,990 BUS PARK FEES 33,519,865 34,140,150 620,285 PARKING FEE 17,777,510 21,439,740 3,662,230 MOTOR BIKES 10,748,905 10,998,690 249,785 LIQOUR LICENCE 18,401,900 39,136,100 20,734,200 PLAN APPROVAL 11,919,366 21,248,784 9,329,418 CONSERVANCY 12,274,260 13,484,790 1,210,530 OTHER CESS REVENUE 2,816,099 1,077,920 -1,738,179 SALE OF FORMS 11,346,485 11,425,650 79,165 TENDER FORMS 542,300 146,500 -395,800 ADVERVISEMENTS 6,050,775 9,438,404 3,387,629 SELF HELP GROUP 2,383,150 1,899,470 -483,680 LAND SUBDIVISION/TRANSFER 9,230,830 11,282,340 2,051,510 HOUSE/STALLS RENT/S.HALL 5,996,130 5,881,123 -115,007 OTHER LAND BASED REVENUE 4,151,395 3,429,400 -721,995 MORGUE FEES 1,689,550 1,715,000 25,450 SLAUGHTER FEES 1,166,685 779,660 -387,025 5 IMPOUNDING 3,752,750 5,736,400 1,983,650 COFFEE CESS 1,418,875 11,686,680 10,267,805 EDUCATION & POLYTECHNICS 937,490 660,650 -276,840 FIRE CHARGES 156,650 156,650 MISCELLANOES REVENUES 16,524,052 3,880,287 -12,643,765 HOSPITALS CHARGES 80,248,600 85,933,391 5,684,791 PUBLIC HEALTH CHARGES 15,982,120 26,148,580 10,166,460 LIVESTOCK (A.I) 10,547,820 5,302,745 -5,245,075 MEAT INSPECTION 9,612,880 9,867,840 254,960 VET.CLINICAL SERVICES 2,858,080 2,230,630 -627,450 FISHERIES 98,040 103,790 5,750 COOPERATIVES 1,028,890 579,970 -448,920 HOUSING & PHYSICAL PLANNING 1,665,396 736,956 -928,440 WEIGHT & MEASURES 992,580 1,353,880 361,300 MARIIRA FARM 9,422,172 2,301,710 -7,120,462 WATER 277,315 521,373 244,058 NEMA FEES 6,000 6,000 SUB-TOTAL 132,733,983 135,086,865 2,352,882 TOTAL 562,227,534 617,697,615 55,470,081 Targeted REVENUE SOURCE Actual Revenue revenue(KSHS) Variance LICENCES 149,582,757 101,037,870 48,544,887 LAND RATE 70,674,675 48,341,146 22,333,529 OTHER CESS REVENUE 4,567,059 11,686,680 -7,119,621 HOUSE RENT/STALL/HALL 9,212,842 5,881,123 3,331,719 BUS PARK FEE 48,876,152 34,140,150 14,736,002 PARKING FEE 26,286,158 21,439,740 4,846,418 BARTER MARKET FEE 72,499,500 50,231,815 22,267,685 PLAN APPROVAL 14,640,676 21,248,784 -6,608,108 SELF HELP GROUP 3,613,779 1,899,470 1,714,309 MORG. FEE 2,411,431 1,715,000 696,431 SUB DIVISION/TRANSFER 11,385,565 11,282,340 103,225 6 LIQUOR 32,765,978 39,136,100 -6,370,122 MOTOR BIKES 14,401,267 10,998,690 3,402,577 SLAUGHTER 1,757,312 779,660 977,652 BULDG MTS & OTHER CESS 106,698,221 70,653,549 36,044,672 ADVERTISEMENT 7,887,623 9,438,404 -1,550,781 EDUCATION & POLY 1,267,943 660,650 607,293 OTHER LAND BASED REVENUE 6,881,922 3,429,400 3,452,522 SALE OF FORMS 17,676,441 11,425,650 6,250,791 CONSERVANCY 20,102,574 13,484,790 6,617,784 IMPOUNDING FEES 1,549,141 5,736,400 -4,187,259 PENALTIES 2,027,337 2,701,982 -674,645 TENDER FORMS 285,160 146,500 138,660 OTHERS 27,304,156 5,120,857 22,183,299 LAND HSG & PHY. PLANNING 3,623,949 736,956 2,886,993 MARIIRA FARM 15,035,495 2,301,710 12,733,785 COOPERATIVES (AUDIT) 1,689,330 579,970 1,109,360 WATER 262,280 521,373 -259,093 LIVESTOCK (A.I) 16,122,319 5,302,745 10,819,574 MEAT INSPECTION 13,529,694 9,867,840 3,661,854 VET. CLINICAL SERVICE 4,514,024 2,230,630 2,283,394 HOSPITALS /H.C 117,380,294 85,933,391 31,446,903 PUBLIC HEALTH 21,978,152 26,148,580 -4,170,428 WEIGHT & MEASURES 1,350,562 1,353,880 3,318 FISHERIES 158,232 103,790 54,442 GRAND TOTAL 850,000,000 617,697,615 232,302,385 REVENUE TYPE FY 2013/3014 FY 2014/2015 FY 2015/2016 FY 2016-17 Local revenue 419,989,717 562,227,534 617000000 500,000,000 Equitable share 3,917,321,109 4,673,157,909 5,355,997,309 5,779,189,434 DANIDA fund 22,430,000 24,810,000 12,595,000 Total County Revenue excluding 4,337,310,826 5,235,385,443 5972997309 6,641,784,434 special grants 7 NATIONAL GOVERNMENT TRANSFER The county budgeted to receive KShs 5,779,189,434 as the equitable share an increase from KShs. 5,355,997,309 received in the FY 2015/2016. YEAR EQUITABLE SHARE % GROWTH 2013/2014 3,917,321,109 2014/2015 4,673,157,909 19 2014/2015 5,355,997,309 15 2016/2017 5,779,189,434 8 2017/2018 6,191,000,000 7 SHARE REVENUE GROWTH 7,000,000,000 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 - 2013/2014 2014/2015 2014/2015 2016/2017 2017/2018 8 EXPENDITURE The total expenditure for 2015/2016 financial year amounted to ksh 6,077,956,491 up from Kshs 5,261,798,499 spent in the FY 2014/2015. The recurrent expenditures amounted to ksh 3,437,417,721 with development expenditures totaling Kshs 2,640,538,770 as tabulated below. APPROVED TOTAL TITLE AND DETAILS BUDGET EXPENDITURE VARIANCE Ksh. Ksh. Ksh. C OUNTY ASSEMBLY 588,991,000 418,326,238 170,664,762 GOVERNORSHIP 218,372,000 179,730,044 38,641,956 FINANCE & ECONOMIC PLANNING 276,214,530 299,088,370 (22,873,840) AGRICUTURE LIVESTOCK AND FISHERIES 141,343,000 96,982,787 44,360,213 TRANSPORT ROADS AND INFRUSTRACTURE 54,722,000 27,633,412 27,088,588 TRADE COMMERCE AND INDUSTRIES 6,130,000 6,326,786 (196,786) EDUCATION AND TECHNICAL TRAINING 172,800,000 272,107,680 (99,307,680) HEALTH AND SANITATION 1,252,205,000 1,592,685,509 (340,480,509) LANDS AND PHYSICAL PLANNING 11,284,000 4,022,577 7,261,423 PUBLIC SERVICE BOARD 40,004,000 10,741,679 29,262,321 CULTURE AND SOCIAL SERVICES 49,652,200 63,340,708 (13,688,508) ENVIRONMENT AND NATURAL RESOURCES 9,100,000 7,309,025 1,790,975 PUBLIC SERVICE DEPARTMENT 727,625,000 478,071,559 249,553,441 GROSS RECURRENT EXPENDITURE 3,548,442,730 3,437,417,720 111,025,010 - D EVELOPMENT EXPENDITURE - - COUNTY ASSEMBLY 255,583,000 - 255,583,000 GOVERNORSHIP 6,100,000 - 6,100,000 FINANCE IT AND ECONOMICALPLANNING 873,200,000 244,643,585 628,556,415 AGRICUTURE LIVESTOCK AND FISHERIES 102,264,000 154,044,729 (51,780,729) TRANSPORT ROADS AND INFRASTRACTURE 708,500,000 895,909,994 (187,409,994) TRADE COMMERCE AND INDUSTRIES 146,000,000 78,766,853 67,233,147 EDUCATION AND TECHNICAL TRAINING 92,000,000 177,424,380 (85,424,380) HEALTH AND SANITATION 437,048,000 642,649,188 (205,601,188) LAND HOUSING AND PHYSICAL 103,280,000 1,022,382 102,257,618 PUBLIC SERVICE BOARD 5,500,000 - 5,500,000 YOUTH, CULTURE AND SOCIAL SERVICES 464,240,000 392,016,852 72,223,148 ENVIROMENT AND NATURAL RESOURCES 82,625,000 4,352,533 78,272,467 PUBLIC SERVICE DEPARTMENT 25,400,000 - 25,400,000 9 GROSS DEVELOPMENT EXPENDITURE 3,301,740,000 2,640,538,770 661,201,230 - - T OTAL 6,850,182,730 6,077,956,491 772,226,239 OVERALL BALANCE AND FINANCING The County realized revenues totaling Kshs 5,973,694,924 against an expenditure of Kshs 6,077,956,491 reflecting a balance carried forward deficit of Kshs 104,261,567 III. COMPLIANCE OF FY 2015/2016 REALIZED BUDGET TO THE FISCAL RESPONSIBILITY PRINCIPLES The approved budget for 2015/2016 was Kshs 3,301,740,000 for development against a total expenditure of Kshs 6,850,182,730. The realized budget was Kshs 2,640,538,770 development against a total expenditure of Kshs 6,077,956,491. The realized development ratio for the Financial year is 43% against the minimum set by the PFM Act of 30% of total expenditure in the medium term. The budgeted development ratio to the total budget was 48% but could not be achieved due to;  Some works done within the financial year were not paid timely due to late release of June 2015 allocation.  Local revenue was not realized 100% and the deficit reduced what was available for programs financing. Fiscal risks have continued to be managed prudently by the County Treasury. As well the county has continued to manage local revenue collection prudently with a view to maintaining a reasonable degree of predictability on our fees and charges.. IV. IMPLEMENTATION OF 2016/2017 BUDGET Governorship The department has continued to effectively and efficiently manage Muranga county government affairs as defined in the county integrated development plan among other policy documents. We have also reasonably developed capacity to promptly respond effectively to disaster occurring in the county. County Assembly 10 The county assembly has maintained the implementation of its key mandate of Legislation, oversight and administration to ensure that our county continues enjoying the fruits of devolution. Finance ICT and Economic planning The Finance, IT and Economic Planning department is obligated with ensuring availability of finances to meet various county needs as envisioned in the departmental plans/Annual Development Plan and the County Integrated Development Plan (CIDP).The main planned projects for the year is partial implementation of a revenue management system at a cost of 10 million. The implementation of the system is progressing and is expected to help seal revenue leakages and enhance revenue collection, communication and reporting. Agriculture The department of Agriculture, Livestock and Irrigation is mandated with promotion and facilitation of food and agricultural raw materials production with the objective of availing opportunities to earn and at the same time promote food security. Energy Transport And Infrastructure The department has continued distributing water pipes for completion of previously stalled community water projects, improve county earth roads to gravel standards to provide better accesses to markets as well as Town Paving ,street lighting and micro- Irrigation projects. Commerce, Trade, Industry, Tourism And Cooperatives We have continued to facilitate competitive trade and growth of industries in the county to enhance fair trade practices and consumer protection. Additionally the department has maintained continuous enhancement of agribusiness and market linkages for agricultural producers. Health and Sanitation The County department of health will continue undertaking programmes aimed at providing health services that are affordable, accessible, effective and responsive to health needs. This will ensure that the population is healthy enough to engage in economic activities that drives the county forward. 11 Land Housing And Physical Planning Provision of accessible, affordable, quality and well managed housing in the county continue being the number one priority, other initiatives are geared toward provision of rating services, real estate transaction services and development of capital infrastructure related to physical planning and housing. Public Service Department The current budget will largely ensure payment of staff emolument as well as planning for capacity development. Education and Technical Training The department is implementing free ECDE feeding programme, bursary for the needy students, and Technical Training especially through Ufundi kwa Vijana initiative. Youth, Culture, Social Service And Cooperative Development The department has continued giving out assistive devices to persons with disabilities, support orphans elderly and vulnerable. Environment and Natural Resources The development of a safe waste management system has remained apriority in addition to setting policies and developing bills on environment conservation and preservation. Public Service Board The board continues has continued implementing plans to facilitate the development of coherent, integrated human resource strategy alongside promotion of national values in the county. UPDATED ECONOMIC AND FINANCIAL FORECASTS Kenya’s economy continues to perform well although severe drought in 2016 weighed on growth hence the first quarter of 2017 registered a slightly lower growth than in the same period in 2016 and pushed up inflation. Real GDP growth reached 5.8 percent in 12 2016, up from 5.7 percent in 2015. The growth was supported by public investment spending, lower global oil prices, and a strong recovery in tourism. Though inflation increased significantly in recent months, reflecting mainly the onset of the drought and the increase in global fuel prices, the measures taken by the government progressively reduced pressures on food prices. Consequently, inflation converged to the Government target band in July 2017. The foreign exchange market has remained stable supported by a generally lower current account deficit. The current account deficit narrowed to 6.0 percent of GDP in July 2017 from 6.4 percent in May and June 2017. This reflects lower international oil prices, improved tea and horticulture exports, strong remittance inflows and a recovery of tourism. The narrowing of the current account deficit together with strong capital inflows, has led to the stabilization of the shilling in the foreign exchange market. The CBK’s international reserves increased to US$ 8.5 billion (5.7 months of import cover) as at June 2017, compared to US$ 7.4 billion (5.3 months of import cover) at end of January 2017. The increase was largely attributed to planned external borrowings by the Government. The economy is on track and is expected to expand by 5.5 percent in 2017. This growth is lower than the 6.0 percent growth projected in the 2017 Budget Policy Statement (BPS) as a result of poor performance of the agricultural sector due to adverse weather conditions and a slowdown in the uptake of credit to the private sector. The growth in 2017 will be supported by ongoing infrastructural investments, resilient domestic demand, continued recovery in the tourism sector and growth of exports in the sub region. In addition, strong consumer demand and private sector investment as well as stable macroeconomic environment will help reinforce this growth. B. Recent Developments Real Sector According to the latest report by the central bank of Kenya the inflation rate has remained stable at between 5.8 and 6.4 percent between July and august, the exchange rates has remained manageable in the recent past. Also with the assenting of the interest capping bill within the month of August by the president within the month of 13 august the interest rates shall not exceed 14.5 percent. All the above indicators are expected to favourably affect budget implementation both at the County and National level. UPDATED FINANCIAL FORECASTS The implementation of 2017/2018 Budget has continued but with major challenges, the release of Equitable share allocation has being quite erratic in the first quarter and the business environment appears not quite as friendly due to political jitters occasioned by the repeat elections scheduled within the month of October. The slower level of economic performance has led to the County Treasury closely monitoring its revenue projections and thus managing its expenditure framework to ensure it closely adheres to fiscal responsibility principles. MEDIUM TERM FISCAL FRAMEWORK THE County has continued to utilise MTEF as a tool linking Policy, Planning and Budgeting. The MTEF consists of a top-down resource envelope, and a bottom-up estimation of the current and medium-term costs of existing policy and, ultimately, the matching of these costs with available resources. The departments will soon undertake a MTEF public participation to properly align the revised stakeholder’s priorities with the available resources. The County Equitable share is projected to grow by seven percent (7%) and the own source revenues by ten percent(10%)in the medium term. Expenditures will be balanced to the available resources as no borrowing is being contemplated within the medium term other than what is expressly for cash flow management. Risks to the Outlook. The likely risks of the outlook for 2017 and medium term include:  Slowdown of economic activities due to the current highly charged political environment.  High inflation rate that may render some cost estimates unrealistic,  Extreme weather conditions negatively affecting agricultural production ,  Late disbursement of funds by the National Treasury making funds absorption targets levels not to be realized. 14  Inadequate resources to support some of the development projects/programmes that may lead to non-completion within the planned time frames.  Unrealized targets on revenue collection  Disharmony between critical stakeholders leading to derailment of programmes  Shifting departmental priorities necessitating changes to the current outlook. V. RESOURCE ALLOCATION FRAMEWORK 2018/2019 (I) 2017/2018 Budget The current year departmental budget allocation in percentages is as per the as per the below table. DEPARTMENT TOTAL 2016/2017 2017/2018 2018/2019 2019/2020 BUDGET BUDGET BUDGET BUDGET % BUDGET % PROPOSE ALLOCATIO % ALLOCAT D % N ALLOCA ION ALLOCAT TION ION Kshs(000) Kshs(000) Kshs(000) Kshs(000) Office of the 3.30% 3.30% 3.30% 3.30% Governor and 244,858,973 Deputy Governor County 667,797,200 10% 10% 9% 9% Assembly Finance ICT and 341,318,569 4.60% 4.60% 4.60% 4.60% Planning 15 Agriculture 5.20% 5.20% 5.20% 5.20% Livestock and fisheries 385,838,382 Energy 1,061,055,551 22.3 22.3 14.30% 14.30% Transport and Infrastructure Development Commerce, 74,199,689 1.00% 1.00% 1.00% 1.00% Trade, Industry, Tourism and Cooperative Development Health and 2,745,388,488 27.00% 27.00% 37.00% 37.00% Sanitation Land Housing 0.90% 0.90% 0.90% 0.90% and Physical Planning 66,779,720 Public Service 927,496,111 12.50% 12.50% 12.50% 12.50% and Administration 16 Education and 586,177,542 7.90% 7.90% 7.90% 7.90% Technical Training Youth, Culture 222,599,067 4% 4% 3% 3% Gender, Social Services and Special Programs Environment 66,779,720 0.90% 0.90% 0.90% 0.90% and Natural Resource County Public 29,679,876 0.40% 0.40% 0.40% 0.40% Service Board TOTAL 7,419,968,887 100% 100% 100% 100% COUNTY BUDGET 2018/2019 2018/2019 DEPARTMENT TOTAL % RECCURE DEVELOPME TOTAL BUDGET ALLOCAT NT NT ION Kshs(000) Kshs(000) Kshs(000) Kshs(000) Office of the 3.30% - Governor and 244,858,973 Deputy Governor 17 County 190,000 0 190,000 coordination Enforcement and 20,000 0 20,000 Compliance Disaster Control 20,000 0 20,000 Policy 14,858 0 14,858 Formulation and Audit 244,858 244,858 County 667,797,200 9% Assembly legislation and 225,000 0 225,000 representation Oversight 195,000 0 195,000 Administration 247,797 0 247,797 and support 667,797 667,797 Finance ICT and 341,318,569 4.60% Planning ICT Development 100,000 0 100000 programme Financial 50,000 50,000 Management programme 18 Administration 88,922 102,395 191,317 and support 238,922 102,395 341,317 Agriculture 5.20% Livestock and fisheries 385,838,382 Cash crop 5,000 39,293 44,293 Development Promotion of food 9,995 100,000 109,995 security programme Livestock and 5,250 30,000 35,250 Fisheries Development Veterinary 6,300 20,000 26,300 Services Agricultural 10,000 10,000 20,000 Training Centre- Mariira Administration 150,000 0 150,000 and support 186,545 199,293 385,838 Energy 1,061,055,551 14.30% Transport and 19 Infrastructure Development Administration 70,000 0 70,000 and support Water 10,000 400,000 410,000 development Road 5,000 514,000 519,000 Development programme programme Market & Urban 5,000 41,000 46,000 Development programme Energy 6,000 10,055 16,055 Development programme 96,000 965,055 1,061,055 Commerce, 1% Trade, Industry, Tourism and Cooperative Development 74,199,689 General 21,000 0 21,000 Administration and support Trade and 8,000 12000 20,000 Industries Development 20 Program Programme 3: 6,000 0 6,000 Consumer Protection Tourism 7,000 5000 12,000 development and management Agribusiness and 10,000 5,199 15,199 marketing 52,000 22,199 74,199 Health and 2,745,388,488 37% Sanitation Curative health 200,000 550,000 750,000 Programme Health 6,371 51017 57,388 Infrastructure Health 1,900,000 1,900,000 administration planning and support programme Public health and 12,000 12,000 sanitation services Alcoholic 6,000 6,000 Programme HIV Programme 20,000 20,000 21 2,144,371 601,017 2,745,388 Land Housing 0.90% and Physical Planning 66,779,720 Estate 4,000 0 4,000 management and Housing programme Land valuation 4,000 0 4,000 and administration programme Land survey and 4,000 20,033 24,033 GIS programme Development 4,746 0 4,746 control and planning programme Administration 30,000 30,000 and Support 38,000 20,033 66,779 Public Service 12.50% and Administration 22 927,496,111 General 927,496 0 927,496 Administration programme Education and 586,177,542 7.90% Technical Training Education 0 30,000 30,000 intervention Programmes Youth 55,000 34,853 89,853 Polytechnics & Vocational training Early childhood 190,000 256,324 446,324 Development Administration 20,000 0 20,000 and Support 0 0 0 265,000 321,177.00 586,177 Youth, Culture 222,599,067 3% Gender, Social Services and Special Programs 23 Cooperative 42,000 20,000 62,000 Development programme Sport 32,000 0 32,000 Development programme Culture 6,000 0 6,000 Development programme Youth 3,000 11,000 14,000 Empowerment programme Gender 3,000 11,599 14,599 Empowerment Social 12,000 0 12,000 Development Administration 82,000 0 82,000 and Support 180,000 42,599 222,599 Environment 0.90% and Natural 66,779,720 Resource Administration 12,000 0 12,000 and support Waste 20,579 30,000 50,579 Management Programme Pollution Control 1,000 0 1,000 24 Programme Environmental 2,000 0 2,000 Conservation Programme Environmental 1,200 0 1,200 Leadership and Governance 36,779 30,000 66,779 County Public 29,679,876 0.40% Service Board Human resource 11,000 0 11,000 Management and Development National Value 2,200 0 2,200 General Admn 14,479 2,000 16,479 and Support 25,200 2,000 29,679 TOTAL 7,419,968,887 100% 4,717,125 2,092,875 7,419,968 COUNTY BUDGET (II) Adjustment to the 2017/2018 Budget A. MEDIUM TERM EXPENDITURE FRAMEWORK As outlined in the county planning framework, we shall continue to implement the priority programmes and projects. The MTEF allows for rolling over of programmes 25 beyond one financial year where necessary due to implementation time demands or financing constraints. We remain cognizant of the critical role that the County continues playing in serving the residents and especially in provision of the constitutionally mandated services. We propose to maintain the same broad percentage allocation to department in the medium term. Sectors/department have the latitude to engage and allocate 2018/2019 ceiling to programme . DEPARTMENT BUDGET 2017/2018 2018/2019 2019/2020 2020/2021 2017/2018 BUDGET BUDGET BUDGET % BUDGET % % % Office of the Governor and Deputy 272,257,812 3.3 3.30 3.30 3.30 Governor County Assembly 936,403,857 11.0 0.10 0.10 0.10 Finance ICT and Planning 217,500,128 3.0 0.05 0.05 0.05 Agriculture Livestock and fisheries 590,426,741 7.0 0.05 0.05 0.05 Energy Transport and Infrastructure 1,264,442,837 15.0 22.30 22.30 22.30 Development Commerce, Trade, Industry, Tourism 106,123,086 1.0 0.01 0.01 0.01 and Cooperative Development Health and Sanitation 3,163,409,167 36.0 0.28 0.28 0.28 Land Housing and Physical Planning 90,617,091 1.0 0.01 0.01 0.01 Public Service and Administration 803,709,198 9.0 0.13 0.13 0.13 Education and Technical Training 724,007,901 8.0 0.08 0.08 0.08 Youth, Culture Gender, Social 396,534,030 5.0 0.04 0.04 0.04 Services and Special Programs Environment and Natural Resource 16,986,845 0.3 0.01 0.01 0.01 County Public Service Board 30,735,983 0.4 0.4 0.4 0.4 TOTAL COUNTY BUDGET 8,613,154,676 100% 100% 100% 100% V. 2018/2019 BUDGET FRAMEWORK The 2018/2019 budget will be developed as per the priorities of the Annual Development Plan 2018-2019, County Fiscal Strategy Paper 2018 and the CIDP. 26 Revenue collection projections The 2018/2019 budget will target revenue collection of ksh 800 million and the Equitable County allocation of about ksh 6.6 billion. The total local revenue collection and the disbursement from the National Government combined will be expected to raise ksh. 7.4 billion. Expenditure Forecasts In 2018/2019, overall expenditures are projected to be about ksh. 7.4 billion. The County will prepare a balanced budget. Departmental expenditures will be as proposed by users and stakeholders but within the approved sector/departmental ceilings. PROPOSED FINANCIAL RESOURCES ALLOCATION CEILINGS The 2018/2019 will be guided by the already prepared Annual Development Plans and firmed up by the county Fiscal Strategy Paper to be submitted to the County Assembly by 28th February 2018. To guide stakeholders on the proposed resource envelope for departments, the following are the proposed indicative ceilings both in percentages and in figures. DEPARTMENT 2018/2019 BUDGET MINIMUM MINIMUM DEV % ALLOCATION DEV % ALL. Office of the Governor and Deputy 3.3 - - Governor County Assembly 11.0 - - Finance ICT and Planning 3.0 - - Agriculture Livestock and fisheries 7.0 60.0 310,800,000.0 Energy Transport and Infrastructure 15.0 90.0 999,000,000.0 Development Commerce, Trade, Industry, Tourism and 1.0 30.0 22,200,000.0 Cooperative Development Health and Sanitation 36.0 30.0 799,200,000.0 Land Housing and Physical Planning 1.0 30.0 22,200,000.0 Public Service and Administration 9.0 - - Education and Technical Training 8.0 50.0 296,000,000.0 Youth, Culture Gender, Social Services 5.0 60.0 222,000,000.0 and Special Programs Environment and Natural Resource 0.3 - - County Public Service Board 0.4 - - TOTAL COUNTY MINIMUM DEV. BUDGET 2,671,400,000.0 27 MINIMUM DEV % 36.1 The above % resource allocation will be firmed up in the County Fiscal Strategy Paper whose consultations are underway. CONCLUSION The FY 2018/2019 CBROP lays the foundation for the next year budget and sets the base for a new planning term. While reasonable progress was made in achieving the development objectives of the 2013-2017 CIDP, many challenges were encountered to the extent that many of the desired outcomes could not be accomplished due to limited resources and other emerging competing priorities by the populace. While in a way the first government’s plans were quite ambitious, our successes and failures have made us more prepared to consolidate the 2013-2017 achievements and propel our county to even greater heights. The infrastructural investments made in agricultural value addition, transport and irrigation have formed a solid base upon which we shall launch a more holistic, achievable and sustainable socio – economic transformation of Murang’a County in this now devolved governance system. Finally I take this opportunity to most sincerely thank all of you for the effort and teamwork you have put, that has enabled us achieve the many milestones that we are truly proud of as a county. Thanking you for the continued support. DAVID WAKABA WAWERU CECM – FINANCE, ICT AND PLANNING 28