REPUBLIC OF KENYA COUNTY GOVERNMENT OF NAKURU THE COUNTY TREASURY COUNTY BUDGET REVIEW AND OUTLOOK P APER 2020 OCTOBER 2020 © County Budget Review and Outlook Paper (CBROP) 2020 To obtain copies of the document, please contact; County Executive Committee Member, Finance and Economic Planning The Nakuru County Treasury Governors Building, P. O. Box 2870-20100. Nakuru, KENYA, The document will be published after approval on County website: www.nakuru.go.ke CBROP 2020 Page | 2 FOREWORD The 2020 County Budget Review and Outlook Paper (CBROP) has been prepared against the backdrop of contracting economy occasioned by the effects of the COVID 19 pandemic as Nations worldwide take containment measures to avoid the spread of the virus. This has seen people lose livelihoods and businesses due to restrictions in travel, lockdowns and measures put in place to reduce the spread of the virus globally. The CBROP has been prepared in accordance with the Public Financial Management (PFM) Act 2012. It presents recent economic developments and actual fiscal performance of the Financial Year 2019/2020 and makes comparison to budget appropriations for the same year. It further provides updated economic and financial forecast to show changes from projections outlined in County Fiscal Strategy of 2020. The National outlook projects a National economic growth of 4.0 percent in 2020/21 and around 4.9 percent in the medium term. This coming from a depressed economic performance of 2.6 percent in 2019/20 resulting from outbreak and the rapid spread of the Covid-19 Pandemic. The Pandemic and the containment measures has led to contraction of the global economy disrupting businesses including international trade and leading to loss of livelihoods for millions. These containment measures affected economic activities within the County including, Tourism, Transport, Hospitality, Education among other sectors. Locally the County fiscal analysis for FY 2019/2020 revealed a decline in revenue performances compared to similar period in FY 2017/2018. Receipts from County Own Source of Revenue (OSR) declined from Kshs 2.8 billion collected in FY 2018/19 to Kshs 2.44 billion in FY 2019/20. This shortfall was occasioned by the effects of COVID 19 pandemic and the containment measures undertaken by the National Government i.e. restriction of movement into and out of Nairobi, imposing of Curfew, closure of bars restaurants and closure of all learning CBROP 2020 Page | 3 institutions. At the County level, there was relocation of traders and matatus, closure of barber shops and salons. Overall County OSR missed its targeted forecast by Ksh 745 million or approximately 21 percent. The total County receipts amounted to Ksh 19.88 billion (approximately 91 percent of the total projected receipts) against a target of Ksh 21.9 billion. There was a shortfall from the receipts from the National Transfers amounting to Kshs 900 million which was disbursed in August 2020 after the closure of the financial year. Total County expenditure amounted to Kshs 14.59 billion against a target of Kshs 21.9 billion. From the County expenditure performance, the budget absorption rate was approximately 66 percent. Budget absorption challenge occurred due to slowed activities during the containment measures after the outbreak of the COVID-19. The limited absorption of the capital expenditure however continued to be linked to delay in disbursement of funds by the National Treasury. As the County prepares FY 2021/22 budget, emphasis will be on strategic interventions with linkage to the ‘Big Four’ Agenda either as drivers or enablers; programmes in MTP III of the Vision 2030, CIDP 2018-2022 Annual Development Plan 2021/2022 and Integrated Development Plans for Urban areas 2019-2023 and programmes outlined in the Governor’s Manifesto. County Government overall expenditure will equal the forecasted County receipts for FY 2021/2022. In this regard the County Government total expenditure will reach Ksh 17.3 billion the FY 2021/2022 approximately growth of 27 percent. Compensation to employees will account for 37 percent of the total County budget approximately Ksh 6.5 billion. Total County development expenditure will reach Ksh 5.6 billion from Ksh 4.35 billion in the as per the CFSP 2020 projections. DR. PETER KETYENYA COUNTY EXECUTIVE COMMITTEE MEMBER, FINANCE AND ECONOMIC PLANNING CBROP 2020 Page | 4 ACKNOWLEDGEMENT The CBROP 2020 has been prepared in accordance with the PFM Act, 2012 and its Regulations. The document provides the fiscal outturn for the FY 2019/20, the macro-economic projections and sets the sector ceilings for the FY 2021/22 and the Medium-Term Budget. The preparation of the 2020 CBROP was a collaborative effort of all the County Government Departments and Entities. My gratitude goes to the County Executive Committee Member for Finance and Economic Planning for his overall stewardship of the County Treasury and County Government on financial matters. We thank all the Departments and Entities for providing the timely provision of data and inputs used to compile the CBROP 2020. The finalization of this document was made possible with the inputs from the departmental SWGs. May I take this early chance to thank each member of the Departmental SWGs through their respective Chief Officers who provided valuable inputs and comments on the performance for the year under review. Further I wish to acknowledge the continuous submission of view and suggestion from stakeholders and the public in the course of various stages of the County Budget preparations process. Finally, I take this chance to appreciate the efforts of the core team in the County Treasury which spent a significant amount of time putting together this report. I am particularly grateful to the Officers in Directorate of Finance including the Head of Accounting Units, Directorate of Internal Audit and Directorate of Economic Planning specifically the Budget Office for execution of this task. Finally, may I take this opportunity to thank the entire staff of the County Treasury for their continued commitment and dedication to the course of serving the County. KENNEDY MOMANYI OMBATI CHIEF OFFICER ECONOMIC PLANNING CBROP 2020 Page | 5 TABLE OF CONTENTS Foreword ........................................................................................................................ 3 Acknowledgement ....................................................................................................... 5 List Of Tables And Figures ............................................................................................. 8 Abbreviations And Acronyms ...................................................................................... 9 Legal Basis for the Preparation and Publication of the County Budget Review and Outlook Paper ............................................................................................................. 10 County Government Fiscal Responsibility Principles ............................................... 11 I. INTRODUCTION ......................................................................................................... 12 Background ............................................................................................................. 12 Objectives of the County Budget Review and Outlook Paper (CBROP) 2020 . 12 II. REVIEW OF FISCAL PERFORMANCE IN FY 2019/2020 ............................................ 14 FY 2019/20 Fiscal Performance .............................................................................. 14 County Expenditure Performance ......................................................................... 26 County Debt Management ................................................................................... 34 Overall Balance and Financing ............................................................................. 34 Continuing in Fiscal Discipline and Responsibility Principles ................................ 35 III. RECENT ECONOMIC DEVELOPMENTS AND FISCAL OUTLOOK ............................. 36 Assessment of Macroeconomic Variability .......................................................... 39 Medium Term Economic Outlook .......................................................................... 43 Risk to Fiscal Outlook ............................................................................................... 46 IV. RESOURCE ALLOCATION FRAMEWORK ................................................................ 47 Adjustment to 2020/21 Budget .............................................................................. 47 Medium-Term Expenditure Framework ................................................................. 48 Budget Framework FY2021/2022 ............................................................................ 51 V. CONCLUSION AND NEXT STEP ................................................................................ 53 ANNEXES ...................................................................................................................... 54 CBROP 2020 Page | 6 ANNEX I: County Government of Nakuru Operations FY 2021/22 - 2023/24 ..... 54 ANNEX II: Trend in Growth of Equitable Share of Revenue ................................. 57 Annex III: Total Expenditure Sector Ceilings for the Period 2021/22 - 2023/24 ... 58 Annex IV: Total Recurrent Expenditure Ceilings for the Period 2021/2022 - 2023/2024 ................................................................................................................. 62 Annex V: Total Development Expenditure Ceilings for the Period 2021/2022 - 2023/2024 ................................................................................................................. 65 Annex VI: Sector Composition and Sector Working Groups for MTEF Budget 2021/2022 - 2023/2024 ............................................................................................. 68 Annex VII: Nakuru County Budget Calendar for the FY2021/2022 .................... 69 CBROP 2020 Page | 7 LIST OF TABLES AND FIGURES Table 1: County Government Total Revenues FY 2019/2020 .................................. 17 Table 2: Exchequer Releases ..................................................................................... 19 Table 3: Own Source Revenue Streams ................................................................... 23 Table 4: Analysis of Local Revenue Performance From 2012/13-2019/20 ............. 24 Table 5: Appropriation in Aid (FIF) ............................................................................. 25 Table 6: Analysis of Facility Improvement Fund Performance From 2013/14 - 2019/20 ......................................................................................................................... 25 Table 7: Expenditure Performance by Economic Classification ............................ 28 Table 8: Departments Expenditure Performance for Period ending 30th June 2019 ...................................................................................................................................... 33 Table 9: Sectoral GDP Performance ......................................................................... 37 Table 10: Medium Term Sector Ceilings 2021/22 - 2023/24 ..................................... 50 Figure 1: County Total Receipts by Source ............................................................... 18 Figure 2: County Receipts Actual vs Target ............................................................. 18 Figure 3: Local Revenue Performance From 2012/13-2019/20 ............................... 24 Figure 4: FIF Performance From 2013/14 - 2019/20 .................................................. 26 Figure 5: Growth of Personnel Emoluments .............................................................. 30 Figure 6: Composition of Recurrent Expenses .......................................................... 31 Figure 7: Composition of Development Expenditure .............................................. 32 Figure 8: Local Electricity Generation ....................................................................... 38 Figure 9: International Visitors Arrival ......................................................................... 39 Figure 10: Inflation Rate (August 2017- August 2020) .............................................. 40 Figure 11: Main Contributors to Inflation ................................................................... 40 Figure 12: Kenya Shilling Exchange Rate .................................................................. 41 Figure 13: Commercial Bank Rates, Percent ............................................................ 42 CBROP 2020 Page | 8 ABBREVIATIONS AND ACRONYMS ADP Annual Development Plan AiA Appropriation in Aid CARA County Revenue Allocation Act CARPS Capacity Assessment and Rationalization Programme CBROP County Budget Review and Outlook Paper CDMS County Debt Management strategy CFSP County Fiscal Strategy paper CG County Government CIDP County Integrated Development Plan COB Controller of Budget COFOG Classification of Functions of Government COVID Corona Virus Disease CRA Commission of Revenue Allocation DORB Division of Revenue Bill DAs Department and Agencies DANIDA Danish International Development Agency FIF Facility Improvement Fund FMD Foot and Mouth Disease FY Financial Year IFMIS Integrated Financial Management Information Systems MTEF Medium Term Expenditure Framework OSR Own Source Revenue PBB Program Based Budget PFM Public Finance Management RMFLF Road Maintenance Fuel Levy Fund SMEs Small Microenterprises SRC Salaries and Remuneration Commission SWGs Sector Working Groups THS-UC Transforming Health Systems for Universal Care CBROP 2020 Page | 9 Legal Basis for the Preparation and Publication of the County Budget Review and Outlook Paper The County Budget Review and Outlook Paper is prepared in accordance with Section 118 of the Public Financial Management Act, 2012. The law states that: 1. The County Treasury shall prepare and submit to County Executive committee for approval, by 30th September in each financial year, a County Budget Review and Outlook Paper which shall include: a) Actual fiscal performance in the previous financial year compared to the budget Appropriation for that year; b) Updated economic and financial forecasts with sufficient information to show changes from the forecasts in the most recent County Fiscal strategy paper c) 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 County Fiscal strategy paper; and d) 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 committee shall consider the County Budget Review and outlook Paper with a view to approving it with or without amendments, not later than fourteen days after its submission. 3. Not later than seven days after the CBROP has been approved by Executive committee, the County Treasury shall: a) Submit the paper to the Budget and appropriation Committee of the County Assembly to be laid before the County assembly; and b) Publish and publicise the paper not later than fifteen days after laying the Paper before County Assembly. CBROP 2020 Page | 10 County Government Fiscal Responsibility Principles In line with chapter 12 of the Constitution of Kenya, Section 107 of the Public Financial Management (PFM) Act, 2012 1) The County Government’s recurrent expenditure shall not exceed the county government’s total revenue 2) Over the medium term, a minimum of 30% of the County budget shall be allocated to development expenditure 3) The County Government’s expenditure on wages and benefits for public officers shall not exceed a percentage of the County government revenue as prescribed by the regulations. 4) 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) Public debt and obligations shall be maintained at a sustainable level asapproved by County Government (CG) 6) Fiscal risks shall be managed prudently 7) 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 CBROP 2020 Page | 11 I. INTRODUCTION Background This County Budget Review and Outlook Paper (CBROP) is the third to be prepared under the current administration and takes into account the reorganisation of County Government function thereon as envisaged in PFM Regulation 2015. In line with the law, the CBROP contains a review of fiscal performance for the financial year 2019/20 and deviations from the Approved Estimates for FY 2019/2021. Objectives of the County Budget Review and Outlook Paper (CBROP) 2020 1. The 2020 CBROP aims to provide a review of the fiscal performance for the FY 2019/2020 and how the outcomes impact the County’s financial objectives as detailed in the County Fiscal Strategy Paper 2020 and fiscal responsibility principles as envisaged in the PFM Act 2012. This information together with the updated economic outlook provides a basis for revision of the current budget in the context of supplementary estimates and the broad fiscal parameters underpinning the next budget and the medium-term expenditure framework. Details of the fiscal framework, budget performance, medium term projections, priorities and sector ceilings will be firmed up in the CFSP 2020. 2. The CBROP continues to be a key document providing an important linkage between policy, planning and budgeting. The County is still implementing the 2nd CIDP which continues to provide a backdrop for budgetary preparation. The preparation of this paper falls well within the period in which the County is also assessing its medium-term performance of the CIDP 2018-2022. This year’s CBROP will be embedded on the strategic priorities adopted in the 2020 approved CFSP. 3. The PFM Act 2012 and PFM Regulations 2015 have set high standards for compliance with MTEF budgeting process. It is expected that sector ceilings as CBROP 2020 Page | 12 per the approved CFSP of 2020 will form the indicative baseline ceilings for the next budget of 2020/21 to 2022/2023 MTEF period. These sector ceilings have been modified to reflect reorganization of County Government functions as indicated in the Annex IV and V to CBROP and will set off the budget preparation process for the fiscal year 2020/2021. 4. With the constitution of the Naivasha and Nakuru Municipal Boards as indicated in Regulation 56 of the PFM Regulations 2015, the County has aligned its resource allocations in consideration of these new entities. Further, this paper will provide preliminary ceiling for budget preparation purposes. 5. The updated National economic outlook will be firmed up in the 2020 CFSP to reflect any changes in economic and financial conditions. In compliance with Section 117(2) of the PFM Act 2012, the to finalise the CFSP will be finalized after the release National budget policy statement. The CFSP will be submitted to the County Assembly by 28th February 2020 as per the set deadline under the PFM Act 2012. 6. The paper is organised into four sections: ➢ Section II provides a review of fiscal performance in FY 2019/2020 and its implications on the 2020 CFSP financial objectives; ➢ Section III investigates and analyses recent economic developments and the updated National and County macroeconomic outlook; ➢ Section IV and V provides the proposed sector budget ceilings and the conclusion respectively. CBROP 2020 Page | 13 II. REVIEW OF FISCAL PERFORMANCE IN FY 2019/2020 FY 2019/20 Fiscal Performance The fiscal year FY 2019/20 is the third for this administration. The fiscal performance for FY 2019/20 was premised on the normal operating environment across the globe. However, the performance was greatly affected by the global outbreak of the COVID-19 Pandemic. The pandemic worsened the revenue performance for the FY 2019/20 and is expected to spill over to the FY 2020/21 and in the medium term as many businesses have been affected by the declining incomes occasioned by the measures taken to curb the spread of the virus. The County experienced a decline in actual own source revenue generated to Kshs. 2.44 billion in 2019/20 compared to Kshs 2.8 billion generated in fiscal year 2018/19 against a set target of Kshs 3.1 Billion translating to 79 percent achievement. In the FY 2019/20, the County own source revenue steadily declined in the first and second half. The major decline was witnessed in the later half and was majorly attributed to the economic down turn due to the outbreak of COVID-19 a global pandemic that hindered full attainment of the projected budget. This was due to National Government imposed dawn to dusk curfew and lockdowns that resulted in cessation of movement hence affecting the major sectors including transport, tourism, hospitality and manufacturing. The cumulative County Revenues for the FY 2019/20 including the fiscal balance amounted to Kshs 19.883 billion against the revised target of Kshs. 21.951 billion. This comprised of exchequer release of Kshs 9.575 billion, conditional grants of Kshs 2.189 billion, OSR of Kshs 2.44 billion (including FIF) and fiscal balance of Kshs. 5.667 billion. The exchequer releases were 48 percent of the total receipts hence the highest, followed by the bank balances at 28.6 percent, OSR at 12.3 percent and conditional grants at 11 percent. CBROP 2020 Page | 14 The equitable share amounted to Kshs 9.575 billion against a target of Kshs 10.4 billion. This depicts a shortfall of Kshs 900 million occasioned by the delay of exchequer release for the month of June. Appropriation in Aid (A.I.A) amounted to Kshs 1.085 billion against a target of Kshs.1 billion. FIF met and exceeded the target due to the County’s increased expansion of various facilities and improved services in the health facilities. The County spent a total of Kshs 14.59 billion during the fear 2019/20 against a revised target of Kshs 21.9 billion. The budget execution rate was 66 percent for the year under review with recurrent expenditure at 96 percent and development at 37 percent. Fiscal Performance FY2019/2020 Performance of Revenues The cumulative revenue for the FY2019/20 was Ksh. 19,883,205,207 billion. This comprised of exchequer release of Ksh. 9,575,201,100 billion conditional grants of Ksh 2,109,426,964 billion, locally generated revenue of Ksh. 2,440,666,697 billion and the statement of refund balance of Ksh 5,677,405,446 as depicted in Table 1. An extra budgeted amount of Ksh. 80.505 million was also received from the Exchequer being allowances meant for front line workers (Health Workers) in the fight against COVID-19. The own source revenue attained was Kshs. 2.44 billion against a set target of Kshs. 3.1 billion depicting an achievement of 79 percent. This is comprised of Kshs 1.35 billion local revenue and Kshs.1.085 billion for FIF. The local revenue collected amounted to Kshs. 1.35 billion against a target of Kshs. 2.1 billion thus depicting a shortfall of Kshs 745 million or an overall achievement of 65 percent. However, the FIF collection amounted to Kshs 1.085 billion against a target 1.0 billion. The FIF surpassed the collection as result of automation of services in the health facilities and increased infrastructure development and improved service delivery in health services. The exchequer releases amounted to Kshs 9.5 billion against a CBROP 2020 Page | 15 target of Kshs. 10.4 billion depicting a shortfall of Kshs 900 million which was disbursed in the FY2020.2021. Further the County received Kshs. 2.109 billion as conditional grants against a target of Kshs. 2.697 billion depicting a shortfall of Kshs. 588 million. The County received 201 million from the Ministry of Health as COVID-19 emergency response funds that was geared towards the mitigation against the spread of COVID-19. CBROP 2020 Page | 16 Table 1: County Government Total Revenues FY 2019/2020 No. REVENUE SOURCE ACTUAL TARGET ACTUAL VARIANCE ANNUAL ANNUAL PERCENT OF PERCENT 2018/2019 2019/2020 2019/2020 GROWTH GROWTH ACHIEVEMENT OF IN TOTAL PERCENT REVENUE 1 Local Sources 1,857,627,306 2,100,000,000 1,354,763,813 (745,236,187) (502,863,493) -27% 65% 7% 2 Facility Improvement Fund 957,002,225 1,000,000,000 1,085,902,884 85,902,884 128,900,659 13% 109% 5% Own Source Revenue Sub 2,814,629,531 3,100,000,000 2,440,666,697 (659,333,303) (373,962,834) -13% 79% 12% Total 3 Balance in County Revenue 3,845,538,531 5,677,405,446 5,677,405,446 - 1,831,866,915 48% 100% 29% Fund (Fiscal Balance) 4 Conditional Grants 2,278,507,115 2,697,624,629 2,109,426,964 (588,197,665) (169,080,151) -7% 78% 11% 5 C.R.A Equitable Share 9,451,400,000 10,476,150,000 9,575,201,100 (900,948,900) 123,801,100 1% 91% 48% Transfers & Grants Sub 15,575,445,646 18,851,180,075 17,362,033,510 (1,489,146,565) 1,786,587,864 11% 92% 87% Total EXTRA BUDGETED 6 KSDP Level II 100,974,396 7 Allowances for Health 80,505,000 0.4% Workers TOTAL 18,491,049,573 21,951,180,075 19,883,205,207 (2,148,479,868) 1,412,625,030 8% 91% 100% Source: Draft Nakuru County Financial Statements Sept, 2020 Figures I and II below illustrate the total County receipts by source. As projected during the period under review, the County received the highest revenues from exchequer transfers. CBROP 2020 Page | 17 COUNTY RECEIPTS BY SOURCE 0.4% 7% Local Sources 5% Facility Improvement Fund 48% Balance in County Revenue Fund (Fiscal Balance) 29% Conditional Grants C.R.A Equitable Share Allowances for Health Workers 11% Figure 1: County Total Receipts by Source COUNTY RECEIPTS ACTUAL VS TARGET 17,500 16,154 15,253 15,000 12,500 10,000 7,500 5,000 2,698 2,100 2,190 2,500 1,355 1,000 1,086 0 Local Revenue FIF Conditional Grants Exchequer Releases TARGET 2019/2020 ACTUAL 2019/2020 Figure 2: County Receipts Actual vs Target CBROP 2020 Page | 18 Millions EXCHEQUER RELEASES The actual exchequer releases from the National Government amounted to Kshs 17.3 billion against the projected amount of Kshs. 18.8 billion depicting a shortfall of Kshs 900 million as indicated in Table 2 below. The shortfall was as a result of late disbursement of June exchequer release by the National Treasury. Table 2: Exchequer Releases REVENUE SOURCE ACTUAL TARGET ACTUAL VARIANCE ANNUAL ANNUAL PERCENTAGE 2018/2019 2019/2020 2019/2020 GROWTH GROWTH OF IN ACHIEVEMENT PERCENT Balance in County Revenue Fund 3,845,538,531 5,677,405,446 5,677,405,446 - 1,831,866,915 48% 100% C.R.A Equitable Share 9,451,400,000 10,476,150,000 9,575,201,100 (900,948,900) 123,801,100 1% 91% Balance in County Local Revenue Account - - Donor Grants (DANIDA) 43,972,213 41,107,213 38,901,162 (2,206,051) (5,071,051) -12% 95% Kenya Devolution Support Program (KDSP) 30,000,000 30,000,000 - 30,000,000 100% Level I Kenya Devolution Support Program (KDSP) 100,974,396 - (100,974,396) -100% Level II World bank National Agricultural and Rural 50,078,476 350,000,000 170,536,334 (179,463,666) 120,457,858 241% 49% Inclusive Growth Projects (NARIGP) Agricultural Sector Development Support 8,003,750 18,507,501 17,229,699 (1,277,802) 9,225,949 115% 93% Projects (ASDSP) Conditional Allocation to compensate Forgone 38,723,265 38,723,265 38,723,265 - - 0% 100% user fees Conditional Fund -Kenya Urban Support Project 1,084,843,300 1,084,843,300 775,922,013 (308,921,287) (308,921,287) -28% 72% (KUSP) Conditional Fund -Kenya Urban Support Project 41,200,000 8,800,000 8,800,000 - (32,400,000) -79% 100% (KUSP) Conditional Fund -Leasing of Medical Equipment 200,000,000 131,914,894 131,914,894 - (68,085,106) -34% 100% Conditional Fund -Free Maternal Health - - Road Maintenance Fuel Levy Fund (RMFLF) 248,847,131 297,372,469 223,029,352 (74,343,117) (25,817,779) -10% 75% CBROP 2020 Page | 19 REVENUE SOURCE ACTUAL TARGET ACTUAL VARIANCE ANNUAL ANNUAL PERCENTAGE 2018/2019 2019/2020 2019/2020 GROWTH GROWTH OF IN ACHIEVEMENT PERCENT Conditional Allocation For Level- 5 Hospital 373,872,832 373,872,832 373,872,832 - - 0% 100% Conditional Health Grant For Covid-19 201,073,000 201,073,000 - 201,073,000 100% Emergency Response World Bank THS-UC Conditional allocation 52,877,203 58,346,857 36,361,115 (21,985,742) (16,516,088) -31% 62% Conditional Allocation for Rehabilitation of Youth 36,089,000 63,063,298 63,063,298 - 26,974,298 75% 100% Polytechnics SUB TOTAL 15,576,420,097 18,851,180,075 17,362,033,510 (1,489,146,565) 1,785,613,413 11% 92% Allowances For Health Workers 80,505,000 80,505,000 80,505,000 GRAND TOTAL 15,576,420,097 18,851,180,075 17,442,538,510 (1,408,641,565) 1,866,118,413 12% 93% Source: Draft Nakuru County Financial Statement September, 2020 CBROP 2020 Page | 20 OWN SOURCE REVENUE PERFORMANCE The performance of Own Source Revenue comprising the local revenue and Facility Improvement Fund amounted to Kshs 2.44 billion against a target of 3.1 billion. The local revenues amounted to Kshs 1.354 billion compared to 1.857 billion in the FY 2018/19. This depicts 65 percent achievement for the local revenues. The FIF attained an actual collection of Kshs. 1.085 billion against a target of Kshs 1 billion depicting an overall performance of 109 percent. An analysis of OSR against each revenue stream indicates that the major contributor is Trade license at Kshs. 260million (19.2 percent). It’s followed closely by Parking fees at Kshs. 253 million (18.7 percent) with Royalties coming third at Kshs. 188 million (13.9 percent). The County park fees had the least contribution that stood at Kshs. 17,000 against a target of Kshs. 750,000. This was closely followed by slaughter fees at Kshs. 11.2 million (0.8 percent) and House rent stood at Kshs 20 million (1.5 percent). The performance of Own Source revenue was affected by various factors including: ➢ Adverse effects from the measures undertaken to curb the spread of COVID-19 virus. ➢ Closure of some businesses eg Bars, Hotel and night clubs ➢ Cessation of movement and curfew affected transport sector ➢ Slowdown of economic activities ➢ Closure and relocation of markets and matatus affected business. ➢ Adverse weather conditions affected revenues in parking, barriers and markets ➢ Delayed enactment of enabling laws e.g rating, housing, markets, trade licences etc ➢ Delayed revenue mapping ➢ Inconsistencies in the exciting revenue systems (ZIZI and LAIFOMS) CBROP 2020 Page | 21 ➢ Shortage of staff and an ageing workforce in the Directorate of Revenue ➢ Delayed approval of the valuation roll Table 3 shows the performance of the various revenue streams. CBROP 2020 Page | 22 Table 3: Own Source Revenue Streams Revenue Source Actual Target Actual Variance Annual Annual Percentage Percentage 2018/2019 2019/2020 2019/2020 Growth Growth Of To Local In Achievement Sources Percent Property tax (Plot rent and Land rates) 332,164,642 300,980,000 196,945,122 (104,034,878) (135,219,520) -41% 65% 14.5% Trade License 386,404,655 400,000,000 260,490,430 (139,509,570) (125,914,225) -33% 65% 19.2% Market Fees 63,565,826 107,220,000 50,046,240 (57,173,760) (13,519,586) -21% 47% 3.7% Building Approval 34,642,241 120,310,000 66,833,353 (53,476,647) 32,191,112 93% 56% 4.9% Cess 13,927,667 100,000,000 22,245,563 (77,754,437) 8,317,896 60% 22% 1.6% Royalties 217,040,996 204,460,000 188,948,337 (15,511,663) (28,092,659) -13% 92% 13.9% Stock/ Slaughter fees 3,875,685 23,000,000 11,235,679 (11,764,321) 7,359,994 190% 49% 0.8% House Rent 17,991,218 70,000,000 20,306,877 (49,693,123) 2,315,659 13% 29% 1.5% Advertising 104,967,636 100,000,000 95,703,056 (4,296,944) (9,264,580) -9% 96% 7.1% Parking fees 277,001,387 330,100,000 253,340,376 (76,759,624) (23,661,011) -9% 77% 18.7% Water and Sewerage - - - - 0.0% Liquor Licensing 95,801,573 72,150,000 39,345,240 (32,804,760) (56,456,333) -59% 55% 2.9% County Park Fees 73,400 750,000 17,000 (733,000) (56,400) -77% 2% 0.0% Health fees and charges 84,207,827 120,350,000 59,454,302 (60,895,698) (24,753,525) -29% 49% 4.4% Other Fees and Charges 225,962,553 150,680,000 89,852,238 (60,827,762) (136,110,315) -60% 60% 6.6% Sub Total Local Sources 1,857,627,306 2,100,000,000 1,354,763,813 (745,236,187) (502,863,493) -27% 65% 100.00% Facility Improvement Fund 957,002,225 1,000,000,000 1,085,902,884 85,902,884 128,900,659 13% 109% SUB TOTAL (AIA & Local Sources) 2,814,629,531 3,100,000,000 2,440,666,697 (659,333,303) (373,962,834) -13% 79% Source: Draft Nakuru County Financial Statement September, 2020 CBROP 2020 Page | 23 Table 4: Analysis of Local Revenue Performance From 2012/13-2019/20 FY TARGET ACTUAL VARIANCE PERCENTAGE OF ACHIEVEMENT 2012/2013 998,164,474 1,301,084,388 302,919,914 130% 2013/2014 2,554,738,273 1,372,049,460 (1,182,688,813) 54% 2014/2015 2,059,164,349 1,600,420,288 (458,744,061) 78% 2015/2016 2,361,149,689 1,780,654,967 (580,494,722) 75% 2016/2017 2,597,264,258 1,555,180,152 (1,042,084,106) 60% 2017/2018 2,500,000,000 1,682,970,850 (817,029,150) 67% 2018/2019 2,000,000,000 1,853,568,733 (146,431,267) 93% 2019/2020 2,100,000,000 1,354,763,813 (745,236,187) 65% TOTAL 17,170,481,043 12,500,692,651 (4,669,788,392) 73% Source: County Treasury Local Revenue Performance From 2012/13 - 2019/20 3,000,000,000 140% 2,500,000,000 120% 100% 2,000,000,000 80% 1,500,000,000 60% 1,000,000,000 40% 500,000,000 20% - 0% TARGET ACTUAL PERCENTAGE OF ACHIEVEMENT Figure 3: Local Revenue Performance From 2012/13-2019/20 Table 4 and Figure 3 above illustrate the County Government revenue performance excluding FIF. As shown FY 2012/13 and 2018/19 had the highest achievements against the target set. However, the performances have been going up and downs owing to various factors. Going forward the County Government will put in place measures for sustainable revenues performance. CBROP 2020 Page | 24 Amount % Achievement APPROPRIATION IN AID In the FY 2019/20 the Facility Improvement Fund had an actual allocation of Kshs. 1.085 billion against a target of Kshs. 1 billion. The County surpassed the collection by 85 million as indicated in Table 5 below. Improvement in revenue collection in FIF is attributed to continuous improvement in infrastructure development in the Health sector which has seen expansion of the major facilities. Further there has been an improvement in services delivery to citizens e.g. provision of comprehensive cancer care at PGH Nakuru. Table 5: Appropriation in Aid (FIF) REVENUE SOURCE ACTUAL TARGET ACTUAL VARIANCE ANNUAL PERCENT OF ANNUAL 2018/2019 2019/2020 2019/2020 GROWTH ACHIEVEMENT GROWTH IN PERCENTAGE Facility Improvement Fund 957,002,225 1,000,000,000 1,085,902,884 85,902,884 128,900,659 109% 13% Source: Draft Nakuru County Financial Statement September, 2020 Table 6: Analysis of Facility Improvement Fund Performance From 2013/14 - 2019/20 FY TARGET ACTUAL VARIANCE PERCENTAGE OF ACHIEVEMENT 2013/2014 522,000,000 424,485,122 (97,514,878) 81% 2014/2015 500,000,000 505,779,098 5,779,098 101% 2015/2016 550,000,000 514,680,179 (35,319,821) 94% 2016/2017 605,000,000 405,703,607 (199,296,393) 67% 2017/2018 611,050,000 597,551,764 (13,498,236) 98% 2018/2019 685,000,000 957,002,225 272,002,225 140% 2019/2020 1,000,000,000 1,085,902,884 85,902,884 109% TOTAL 4,473,050,000 4,491,104,879 18,054,879 100% CBROP 2020 Page | 25 FIF Performance From 2013/14 - 2019/20 1,200,000,000 160% 140% 1,000,000,000 120% 800,000,000 100% 600,000,000 80% 60% 400,000,000 40% 200,000,000 20% - 0% 2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 TARGET ACTUAL PERCENTAGE OF ACHIEVEMENT Figure 4: FIF Performance From 2013/14 - 2019/20 As illustrated in table 6 above, FIF has had a positive growth since 2017/18. This has seen the fund surpass the targeted revenues for the period 2014/15, 2018/19 and 2019/20. The achievement has been majorly due to improved infrastructure development in the health sector and improved services that seen increased services to the citizens of Nakuru County and neighbouring Counties. County Expenditure Performance The County’s expenditure for the FY 2019/20 was Ksh 14.59 billion against a revised target of Ksh 21.95 billion, depicting an absorption rate of 66 percent. This represents an underspending of Ksh 7.36 billion, and a 34 percent deviation from the revised budget. The underspending is majorly attributable to lower absorption of development expenditure, including conditional grants. The actual expenditure in nominal terms grew by 5 percent compared to the FY 2018/19, mainly accountable to improvement in development consumption by 58 percent. In absolute terms, the net growth in absorption was Ksh 2.03 billion. CBROP 2020 Page | 26 Amount % Achievement The recurrent expenditure for the County Government amounted to Ksh 10.48 billion against a total target of Ksh 10.97 billion, out of which 935.28M was consumed by the County Assembly. This represents an underspending of Ksh 491 million, and an absorption rate of 96 percent. The underspending was mainly in compensation to employees. Under the development budget, Ksh 4.11 billion was expended against a revised estimate of Ksh 10.98 billion. This represents an absorption rate of 37 percent of the planned expenditure. This was occasioned by the huge number of projects carried forward from the previous year, constraining the technical and fiscal capacities. Further, the presence of the COVID-19 pandemic during the last quarter of the financial year slackened the implementation of projects. Table 7 below shows the total County expenditure for FY 2019/2020 by economic classification. CBROP 2020 Page | 27 Table 7: Expenditure Performance by Economic Classification Economic Classification ACTUAL TARGET ACTUAL VARIANCE PERCENTAGE BUDGET PERCENT OF 2018/2019 2019/2020 2019/2020 GROWTH EXECUTION TOTAL RA TE EXP ND. Current Expenditure Compensation of employees 5,989,957,706 6,439,361,092 6,021,620,723 (417,740,369) 1% 94% 41% Use of Goods and Services 3,407,944,919 3,919,088,494 3,864,956,637 (54,131,857) 13% 99% 26% Transfers to other Government entities (County 551,729,063 611,856,599 592,685,546 (19,171,053) 7% 97% 4% Assembly) Other Grants and transfers Sub Total 9,949,631,688 10,970,306,185 10,479,262,906 (491,043,279) 5% 96% 72% Capital Expenditure Acquisition of Non-Financial Assets 1,530,092,694 6,219,318,130 2,375,602,501 (3,843,715,629) 55% 38% 16% Capital Grants to Governmental Agencies 918,009,568 4,482,643,154 1,509,296,549 (2,973,346,605) 64% 34% 10% Other Development (County Assembly) 162,280,478 278,912,607 228,970,265 (49,942,342) 41% 82% 2% Sub Total 2,610,382,740 10,980,873,891 4,113,869,315 (6,867,004,576) 58% 37% 28% Grand Total 12,560,014,428 21,951,180,075 14,593,132,221 (7,358,047,854) 16% 66% 100% Source: Draft Financial Statement Sept. 2020 Note: The balances carried over at the end of FY 2018/19 amounted Kshs 5.677 billion, crowding out the absorption capacity of budgeted funds in FY 2019/20. This was occasioned by late disbursement from exchequer and uncommitted project funds. An analysis of departmental expenditure reveals that absorption rate was highest in the Public Service, Training and Devolution Department (102%) who overshoot their planned budget on compensation to employees. This was followed by the County Assembly (94%), Health (89%), County Treasury (88%), and Office of the Governor (89%). CBROP 2020 Page | 28 The least absorption rates were registered in Nakuru Municipality (2%), Naivasha Municipality (3%), Lands Physical Planning and Housing (30%), Infrastructure (38%) and Water, Environment, Energy and Natural resources (39%). Recurrent Expenditure The actual recurrent expenditure stood at Ksh 10.48 billion, and its composition is further analysed under personnel costs, operation and maintenance hereunder; 1) Personnel Costs Expenditure on personnel costs excluding casual wages in the FY 2019/20 amounted to Ksh 6.02 billion, against a revised estimate of Ksh 6.44 billion. This represents an underspending of Ksh 417.7 million. The spending on personnel emoluments constituted of Ksh 5.68 billion by the Executive arm and Ksh 342.59 million by the County Assembly. Bulk of personnel emoluments belonged to the Health sector at over Ksh 3.4 Billion, whose wage bill has been rising significantly over the years due to annual recruitments, implementation of CBAs and natural increase. In the overall, there has been a continuous rise in the County Government’s personnel cost obligations over the years, occasioned by a number of factors such as natural growth, implementation of phased harmonisation of salaries by SRC, CBAs, recruitments of additional personnel in health and education sectors among others. The personnel expenditure registered an upward growth compared to the previous period, and contributed to 41 percent of the total County expenditures in the year under review. The growth was partially occasioned by reclassification of expenditures, such as contractual employees and casual wages from Use of goods and services, to personnel costs. Nevertheless, there is still growing demand across County Departments and Entities for additional staffing occasioned by natural attrition, ageing workforce CBROP 2020 Page | 29 imbalanced staffing between the managerial, technical and supportive cadres among others. This scenario calls for adoption of better staff planning and succession management practices. Figure 5: Growth of Personnel Emoluments Personnel Expenditure Trend FY 2016/17-2019/20 6,200 6,000 5,990 6,022 5,800 5,857 5,600 5,400 5,200 5,000 5,111 4,800 4,600 FY2016/17 FY2017/18 FY2018/19 FY2019/20 Source: Draft Nakuru County Financial Statement Sept. 2020 2) Operation and Maintenance Expenditure For the period under review, operation and maintenance expenses for the County Government amounted to Ksh 4.46 billion against a target of Ksh 4.53 billion. This comprised Ksh 3.86 billion expenditure by the Executive arm and Ksh 592.7 million by the County Assembly, and represents an absorption rate of 98 percent of the planned expenditure. Further, this expenditure contributed to 31 percent of total County expenditure during the period under review. In absolute terms, there was an increment in expenditure compared to the FY 2018/19 by Ksh 497.97 million, attributable to absorption by both the County Executive and the County Assembly. CBROP 2020 Page | 30 Kshs Millions Composition of recurrent expenditure in 2019/20 is depicted in the figure below: Figure 6: Composition of Recurrent Expenses Actual Recurrent Expenditure FY 2019/20 6% 37% 57% Compensation to employees(inclusive of County Assembly) Use of Goods and Services(County Executive) Use of goods and services(County Assembly) Source: Nakuru County Treasury Sept. 2020 Development Expenditure Development expenditure stood at Ksh 4.11 billion against a planned target of Ksh 10.98 billion. This represents an absorption rate of 37 percent, and an underspending of Ksh 6.87 billion. The year registered a significant growth in absorption of capital expenditure by Ksh 1.50 billion, from Ksh 2.6 billion in FY 2018/19 to Ksh 4.11 billion in 2019/20. Further, development expenses contributed to 28 percent of the total actual County expenditure in the year under review. Out of the Ksh 4.11 billion, Ksh 1.51 billion was expended under conditional grants amounting to 5.57 percent. Departmental projects consumed 57.8 percent, and 5.6 percent by the County Assembly, both financed by equitable share and own source revenues. CBROP 2020 Page | 31 The under-absorption rate of 63 percent is on account of both departmental projects funded under the equitable share and the donor funded projects, particularly the projects under Kenya Urban Support Programme. Both categories registered an absorption rate of 36 percent. The County Assembly registered a spending of 82 percent of the planned 278.9 million. The composition of actual expenditure is depicted in Figure 7 below. Figure 7: Composition of Development Expenditure Development Expenditure 2019/20 5.57% 36.69% 57.75% Acquisition of Non-Financial Assets Capital Grants to Governmental Agencies Other Development (County Assembly) The Departmental expenditure analysis reveals that highest absorption of development expenditure was attained by the County Assembly (82%), County Treasury (65%), Health (65%), Agriculture, Livestock and Fisheries (58%) and Trade (58%). The least spenders were Nakuru, Naivasha Municipal Boards, County Public service Board at zero (0) percent. Lands, Physical Planning and Housing; Water, Environment, Energy and Natural Resources; Office of the Governor; Infrastructure attained spending level below 30 percent. The departmental expenditure analysis is outlined in Table 6 below; CBROP 2020 Page | 32 Table 8: Departments Expenditure Performance for Period ending 30th June 2019 VOTE VOTE TITLE Recurrent Variance Development Variance Total Variance Rate of NO. Budget Actual 2019/20 Target 2019/20 Actual 2019/20 Target 2019/20 Actual 2019/20 Target 2019/20 Execution (%) 4561 Office of the Governor 328,612,102 335,824,259 (7,212,157) 25,184,560 124,744,644 (99,560,084) 353,796,662 460,568,903 (106,772,241) 77% and Deputy Governor 4562 County Treasury 1,210,507,568 1,260,192,383 (49,684,815) 285,174,463 439,809,057 (154,634,594) 1,495,682,031 1,700,001,440 (204,319,409) 88% 4563 County Public Service 40,823,752 62,708,804 (21,885,052) - 1,817,929 (1,817,929) 40,823,752 64,526,733 (23,702,981) 63% Board 4574 Public Service, 735,044,039 708,098,869 26,945,170 7,225,712 17,525,713 (10,300,001) 742,269,751 725,624,582 16,645,169 102% Training and Devolution 4565 Health Services 5,151,982,255 5,359,455,043 (207,472,788) 1,034,169,593 1,585,575,224 (551,405,631) 6,186,151,848 6,945,030,267 (758,878,419) 89% 4566 Trade, Industry, 118,347,735 136,936,225 (18,588,490) 248,149,659 427,217,032 (179,067,373) 366,497,394 564,153,257 (197,655,863) 65% Marketing and Tourism 4567 Infrastructure 348,105,666 376,551,736 (28,446,070) 655,372,916 2,236,916,209 (1,581,543,293) 1,003,478,582 2,613,467,945 (1,609,989,363) 38% 4575 Education, Vocational 405,446,220 444,227,690 (38,781,470) 375,251,380 968,439,747 (593,188,367) 780,697,600 1,412,667,437 (631,969,837) 55% training, ICT and E- Government 4569 Agriculture, Livestock 521,353,366 566,578,822 (45,225,456) 452,659,133 783,023,950 (330,364,817) 974,012,499 1,349,602,772 (375,590,273) 72% and Fisheries 4570 Land, Physical 130,062,537 139,161,130 (9,098,593) 348,160,365 1,441,520,582 (1,093,360,217) 478,222,902 1,580,681,712 (1,102,458,810) 30% Planning and Housing 4576 Youth, Culture, 252,403,692 263,950,039 (11,546,347) 59,716,545 172,076,446 (112,359,901) 312,120,237 436,026,485 (123,906,248) 72% Gender, Sports and Social Services. 4572 Water, Environment, 275,397,490 293,289,441 (17,891,951) 393,834,724 1,418,451,450 (1,024,616,726) 669,232,214 1,711,740,891 (1,042,508,677) 39% Energy and Natural Resources 4577 Nakuru Municipality 14,020,930 30,056,254 (16,035,324) - 740,767,800 (740,767,800) 14,020,930 770,824,054 (756,803,124) 2% 4578 Naivasha Municipality 11,877,169 30,056,254 (18,179,085) - 344,075,500 (344,075,500) 11,877,169 374,131,754 (362,254,585) 3% 4573 County Assembly 935,278,385 963,219,236 (27,940,851) 228,970,265 278,912,607 (49,942,342) 1,164,248,650 1,242,131,843 (77,883,193) 94% TOTAL 10,479,262,906 10,970,306,185 (491,043,279) 4,113,869,315 10,980,873,890 (6,867,004,575) 14,593,132,221 21,951,180,075 (7,358,047,854) 66% Source: Draft Nakuru County Financial Statement Sept. 2019 CBROP 2020 Page | 33 County Debt Management A special audit was carried out by the Office of the Auditor General that classified pending bills into ineligible and eligible pending bills. The ineligible pending bills audited as at June 2018 amounted to Ksh 2 billion. With the recommendation of the Auditor General the Pending Bills Committee was gazetted on 25th October 2019 to look into all the pending bills. The Committee analysed all the pending bills and have so far reclassified ineligible pending bills amounting to 762 million as eligible and cleared them for payment. The Pending Bills Committee is however still verifying pending bills worth Ksh. 812 million. The County has prioritized payment of the pending bills as per the Presidential directive. During the FY 2019/20 a total of Kshs. 160 million was spent under debt resolution. An amount of Kshs 180 million has been allocated in the FY 2020/21 for the payment of the pending bills. The County Treasury will continue to implement the recommendations of the Pending Bills Committee in order to clear the outstanding pending bills. This is in addition to the recommendations detailed in the County Medium Term Strategy Paper prepared and submitted to the County Assembly as envisaged in Section 123 of the PFM Act, 2012. Over the medium term, the County Government will continue to maintain a balanced budget with the revenue estimates equal to the expenditure. This will be done by ensuring realistic revenue projections, adhering to the PFM Act, 2012. Overall Balance and Financing Reflecting the above performance in revenue and expenditure, overall fiscal balance on a commitment basis (including FIF) was Kshs 5.6 billion for FY 2019/20 against the revised approved budget of Kshs 21.9 billion. Overall fiscal surplus/Deficit and after adjustment to cash basis totalled (Kshs 2.1 billion). The CBROP 2020 Page | 34 deficit was financed through the reduction of uncommitted projects with the fiscal balance accounting for the projects rolled over to financial year 2020/21. Continuing in Fiscal Discipline and Responsibility Principles During the year under review the County Government allocated 50.02 percent towards development expenditure thereby attaining the minimum 30 percent requirement set out in the PFM Act Section 107. There was a slowdown in execution of development budget where 37 percent of the total capital budget was absorbed in FY2019/20 compared 32 percent in FY 2018/19. The actual expenditure on compensation was 41 percent. This is still higher than the recommended ratio of 35 percent as set out in the PFM Regulations. Over the medium-term expenditure on salaries and wages will rise further on account of SRC recommendations for job evaluation and court determinations. The County Government has continued in its commitment to maintain debt at sustainable levels as per the County Medium Debt Strategy pursuant to Section 123 of the PFM Act. During the year under review the County Government serviced debt amounting to 160 million and will continue to monitor and encourage financial discipline across all Departments to avoid further accumulation of pending bills by spending units. Revenue performance in FY 2019/20 achieved 91 percent of the targeted forecast. The County Government will therefore continue to be more rational while projecting future revenue particularly putting into consideration past revenue trends and evaluation of new potential revenue streams. CBROP 2020 Page | 35 III. RECENT ECONOMIC DEVELOPMENTS AND FISCAL OUTLOOK The global outbreak of the COVID-19 pandemic and the resultant containment measure to reduce the spread is the most significant occurrence in the recent economic development. global economy and the free movement of labour, goods and services has been fundamentally disrupted. The slowdown has led to contraction global economy by 4.9 percent in 2020 from an actual target of 2.9 percent in 2019. The Kenya economy operates under the same global environment and as such the short-term to medium term effects of COVID-19 have significantly impacted on the national economy. The national economy has expanded by 4.9 percent in the first Quarter of 2020 against a projected target of 5.5 percent. The overall national economy outlook for 2020 is expected to grow by on 2.6 percent compared with 6.1 percent projection in the Budget Policy Statement (BPS 2020). Observing the linkages of the County Economy with Nairobi region and northern corridor transport route, the lockdown measures in the Nairobi metropolitan region disrupted the flow of goods and services into Nakuru County. As such the County suffered from the slowdown in business activities in the transport related sectors. Generally, all major sectors contributing to the County economy have been negatively affected by the immediate impact of the COVID-19 containment measures. This included the following; Agriculture tourism, transport, manufacturing, finance and insurance among other sectors. Based on the national statistics the value agriculture sector exports (significant of which that comes from Nakuru County in form of cut flowers) in the revealed a slump in the growth in the first Quarter of 2020. CBROP 2020 Page | 36 Table 9: Sectoral GDP Performance Source of Data: Kenya National Bureau of Statistics The County economy has experienced significant hit from the effects of COVID- 19 due to its strong linkages with the export market. The County experienced huge worker lay-off in the export-oriented sectors including cut flowers, tourism and hospitality among other. In this regard the County prepared a supplementary budget in order to address the immediate humanitarian initiatives that included supply of food rations to the affected target group mainly in the Naivasha region. County Own Source Revenues (OSR) excluding Facility Improvement Fund (FIF) shrank by 25 percent up from Ksh 1.8 Billion in FY 2018/2019 to Ksh 1.35 Billion in 2019/2020. Nonetheless the FIF demonstrated strong resilience to rise by 13.4 percent from Ksh 957 million in FY 2018/2019 to Ksh 1.085 billion in 2019/2020 mainly on account of its direct linkage with health in the wake of COVID-19 response strategies. In the period under review significant progress has been realised in the implementation of strategic national infrastructure within Nakuru County. This included the finalisation of Phase 2A of the Standard Gauge Railway, Establishment of the Naivasha Inland Container Terminal, approval for the CBROP 2020 Page | 37 Construction of the Nakuru Airport. This critical infrastructure are expected to significantly but positively impact the local economy through increased Nakuru County has significant geothermal energy potentials. So far the current geothermal (of 1236 million KWH) continues to contribute highest proportion on the national energy mix. Current geothermal productions (mainly exploited in Nakuru County) from approximately 27.6 percent in First Quarter of 2017 to approximately 47 percent in First Quarter of 2020. But despite the growing significance of the geothermal energy as a clean renewable energy, the County is still yet to benefit from this important natural resource as envisaged in the Energy Act 2019. Figure 8: Local Electricity Generation Source of Data: Budget Review and Outlook Paper 2020. Observing the wide variety of flora and fauna, as well as national parks within Nakuru, the County is among the major destination in the national tourism circuit. As such the grounding of air transport and travel restriction occasioned by COVID- 19 containment measures as well closure of hotels and restraints was a huge setback to the tourism sector which was on an upward trajectory before. Many livelihoods that depend on this sector were lost. From approximately 17,700 in First Quarter of 2015 to a high of 364,000 in First Quarter of 2020. CBROP 2020 Page | 38 Figure 9: International Visitors Arrival Source of Data: Kenya National Bureau of Statistics Assessment of Macroeconomic Variability Inflation Rate The National inflation rate has a pointer on price variations locally and is an important consideration during arriving at final budget framework. Over the last 3-4 years have trends have revealed a stable inflation rate and within the medium-term target of 5 percent with a variability +/- 2.5. This subdued control of the rate of inflation demonstrates the continued effectiveness of the monetary policy of the Central. CBROP 2020 Page | 39 Figure 10: Inflation Rate (August 2017- August 2020) Source of Data: Kenya National Bureau of Statistics Further, food inflation emerged as the highest contributor of the general inflation rate. However, the consistency in favourable weather pattern over the past several seasons have continued to present an opportunity for improved food productivity. The declining demand for crude oil in the global market in the wake of COVID-19 and further focus in renewable energy potentials may have contributed to the declining significance of fuel inflation. Figure 11: Main Contributors to Inflation Source of Data: Kenya National Bureau of Statistics CBROP 2020 Page | 40 Exchange Rate Recently Forex Market has been dependent on diaspora remissions, improving exports and a strong CBK monetary policy outlook. However, and as expected, the volatility of the forex market has resulted from both endogenous and exogenous shocks of COVID-19 and a general strengthening of the US dollar. The Kenya Shilling has however remained stable among regional currencies. In this regard it expected to improve trade earnings from East African market and beyond. But reliance on imported goods and serviced by the County Government is likely to reduce the ability to maximize on economy on efficiency envisaged in the MTEF budget framework. Figure 12: Kenya Shilling Exchange Rate Source of Data: Central Bank of Kenya. CBROP 2020 Page | 41 Interest Rates The Central Bank lending rate has been maintained at 7.0 percent in the last two Quarterly Review by the Monetary Policy Committee. The general access to capital for investments by County business entities is largely dependent on the prevailing interest rates. Affordability to available credit schemes is critical for the recovery of the SMEs in order to realise envisaged recovery from the impacts of COVID-19 in the Medium term. The County Government has in the review period developed the Cooperative and the Enterprise Funding Act to further improve access to capital by County SMEs. Figure 13: Commercial Bank Rates, Percent Source of Data: Central Bank of Kenya Money and Credit CBROP 2020 Page | 42 Medium Term Economic Outlook Global and Regional Outlook The global economy was significantly affected by adverse effects of COVID-19 containment measures. The global economies will contract by approximately 4.9 percent in 2020 up from 2.9 percent growth in 2019. The forecasted outlook reveals a strong recovery in the global economy in 2021 with a projected expansion of 5.4 percent buoyed by increased consumption and investment. The major world economies in Asia, Europe and North America are expected to contact by about 10 percent in 2019 and strong recovery by approximately 6.1 percent in 2021. Sub-Saharan regional economies are expected to also strongly by approximately 3.4 percent in 2021. This positive global outlook is expected to favour Nakuru County export-oriented sectors like agriculture, transport and tourism. National/Domestic Outlook The national economy had demonstrated strong resilience in pre- COVID-19 period despite the unattractive global macro environment buoyed by a favourable weather conditions for Agriculture sector. GDP expanded by 4.9 percent in the Quarter of 2020. Although the second Quarter performance is expected to suffer from the immediate effects of COVID19, the latest economic indicators point to direction of continued positive growth in Agriculture, which is one of the priorities in the national Big Four agenda. The national economic outlook envisages a strong recovery of with a projected national economic growth of 5.3 percent in 2021 and 5.9 over the medium-term period. The County will continue to hedge expected national improvements in the productive sectors such as agricultures, construction and manufacturing. Further better performance of the national economy has a direct linkage in the CBROP 2020 Page | 43 mobilisation of the nationally revenues which in turn impacts on the horizontal division of revenues. Monetary and Fiscal Outlook Observation from the recent economic developments has revealed the effectiveness of monetary policy amid a turbulent forex market and strong US dollar in the wake of COVID-19 disruptions. Lending in the local market has revealed consistency in the interest rate. National monetary policy outlook reveals more stability in targets for inflation rate, on the basis of better agriculture sector performance and the subdued oil market prices. This outlook favours the County economic recovery strategy which is hedged on stability in the cost of capital and access to the same by SMEs and other business entities. The implementation of the Ksh 53 billion National economic recovery stimulus package for COVID-19 by the National Government in the current fiscal year is further expected to inject the much-needed cash into the economy and further promote the recovery of the SMEs who are part of the target group ESP. Current National Government development initiatives within Nakuru County Include the operationalisation of Standard Gauge Railway (SGR) phase 2A, establishment of the Naivasha Inland Container Terminal and the development of the proposed industrial park, and the Construction of the phase one of the Nakuru Airport. The finalisations of these major development infrastructure are likely to stimulate local economy and create positive externalities that over the medium-term period. To this end the County will leverage on the multiplier effect of the National development interventions through creating synergies. CBROP 2020 Page | 44 County Fiscal Outlook (Revenue and Expenditure) The County Government fiscal framework will be guided by the projected recovery of the County economy and expected improvements in the national transfers as a result of the recently passed horizontal revenue allocation formula. In the current fiscal year, the County deviated from its stated financial objectives due to the disruptions of COVID-19. Nakuru County projects that during the 2021/2022 national transfers to increase by Ksh. 2.5 billion a growth of approximately 24 percent based on the recent agreed County Allocation Revenue Bill 2020. On the other hand, the County Own Source Revenues are expected to slowly recover in 2021 and beyond but the County is also adopting a more cautious approach as 2022 planned elections approaches. Formulation of the County finance bill 2020 and beyond will largely focus promoting recovery of the most business promises in the recent developments. Further FY 2021/2022 will mark the finalisation of ongoing investment in physical infrastructure and other flagship programmes/projects earmarked in the CIDP 2018-2022. This expansionary model in development of fiscal infrastructure is expected to increase access social infrastructure particularly in health and education. Further investment in other selected physical infrastructure (e.g. roads, transport, public works and market infrastructure) will lead into the realisation of the development transformation envisaged in the medium-term Integrated planning period (CIDP 2018-2022). As explained above the County Government has received more than Ksh. 2.2 billion in form of conditional grants mainly from World Bank. The County remains upbeat that the favourable factors that include prudency in public resource management and creating an enabling environment for external development partnership in bridging the budget gaps. CBROP 2020 Page | 45 Risk to Fiscal Outlook • Pending Bills; the delivery of County public goods and services is largely achieved through prequalified suppliers and contractors. Over the recent period the County pending bills has continued to accumulate to approximately Ksh. 1.574 billion as at June 2020 partly due to system inefficiency. The failure to promptly meet the financial obligations to its suppliers and contactors exposes the County to reputational risk as a poor debtor to its suppliers. • Budget Credibility; Over the period 2018/2019 -2019/2020 the County Government has record below per performance in budget execution resulting into carrying forward funds to subsequent financial years and delays in actualisation of planned development interventions. In this regard the realisation of the targets set in the approved estimates and the realisation of the stated financial objectives are put into question. • Wage bill Constraints; the Public Financial Management (County Government) Regulations prescribe that allocations for County Salaries and Wages should not exceed 35 percent. However, the County wage bill has continued to rise in absolute terms to reach Ksh. 6.9 billion in FY 2020/2021 due to implementation of planned recruitments and employee promotions based on existing Collective Bargaining Agreement. If left unchecked, the continued rise in personnel expenditure will affect the County ability to meet its financial obligations in other core expenditure areas. • Political Risk; the economic assumptions underpinning the Medium-Term Expenditure Framework (MTEF) and the fiscal forecast is further founded on stability in the political administration. The level of uncertainty and political mobilisation seen in past general elections may negatively affect fiscal forecast as the Country approach the 2022 general elections. CBROP 2020 Page | 46 IV. RESOURCE ALLOCATION FRAMEWORK Adjustment to 2020/21 Budget The Medium-Term Expenditure Framework (MTEF) is aimed at ensuring efficiency and effectiveness in resource allocation and expenditure, improvement in revenue collection and mitigation measures undertaken to reduce the impact of COVID-19 pandemic to the Economy. Further, during this MTEF period the County Government will continue to advance the implementation of the Big Four Agenda, Medium Term Plan III and programmes and projects planned in the CIDP 2018-2022 as well as the Governor’s manifesto. The underperformance in both revenue collection and expenditure in the FY 2019/20 has implications on the financial objectives outlined in the County Fiscal Strategy Paper 2020 and the 2020/21 Budget. In this regard, the baseline for projecting both the revenue and expenditures for the FY 2020/21 and the medium term has changed given the outcome of actual revenue collection for FY 2019/20. Owing to the prolonged effects of COVID 19 Pandemic that has forced closure of some businesses e.g. Bars, night clubs and restricted movement of goods due to enforcement of curfew, reduced incomes and loss of livelihoods has greatly affected revenue performance. Thus, the revenue projection has been revised downwards and reallocation done to more critical areas. Given the OSR performance in FY 2019/20, the FY2020/21 projection for the local sources of revenue are projected at Kshs. 1.8 billion. However, the FIF has been increasing, thus the allocation to FIF has been revised upwards to 1.4 billion in the approved budget. The expenditure projection for the FY2020/21 will be revised to reflect additional funding arising after the revision of CARA 2020 that was approved late after protracted delay in the Senate due to the deliberation on the third-generation formula for revenue sharing among Counties. CBROP 2020 Page | 47 Medium-Term Expenditure Framework The Government will continue with its policy of expenditure prioritization with a view to achieving the transformative development agenda which is anchored on provision of core services, ensuring equity and minimizing costs through the elimination of duplication and inefficiencies, implementation of the Constitution, creation of employment opportunities and improving the general welfare of the people. Realization of these objectives will have implications in the budget ceilings to be provided in this Budget Review and Outlook Paper. The following criteria will serve as a guide for allocating resources: i. Linkage of Programmes to the ‘Big Four’ Agenda either as drivers or enablers; ii. Linkage of the programmes with the objectives of Third Medium-Term Plan of Vision 2030; iii. Linkage of the programmes with the objectives of the CIDP 2018-2022 Annual Development Plan 2021/2022 and Integrated Development Plans for Urban areas 2019-2023; iv. The programmes should address the core mandates of the respective County entities and geared towards achievement of the Governor’s Manifesto. v. The programmes should be cost effective and sustainable. The Own Source Revenue (OSR) contributes to 12.3 percent of the total revenue receipts. During the medium term, the County Government will institute measures geared towards improved revenue collection. These will include; enactment of relevant revenue laws, fast tracking the finalization and implementation of the Valuation Roll, carry out revenue mapping and revamping the revenue collection system. CBROP 2020 Page | 48 The table below provides the tentative projected baseline expenditure ceilings for the 2021/22-2023/24 MTEF, classified by Sectors for actualization of the strategies aforementioned. CBROP 2020 Page | 49 Table 10: Medium Term Sector Ceilings 2021/22 - 2023/24 SECTOR APPROVED CBROP TOTAL PROJECTIONS % of Total Expenditure (CBROP) ESTIMATES CEILINGS FY2020/2021 2021/2022 2022/2023 2023/2024 2021/2022 2022/2023 2023/2024 1 Agriculture Rural and Sub Total 2,308,795,775 1,323,684,054 1,456,052,459 1,601,657,705 7.6% 7.6% 7.6% Urban Development Recurrent Gross 676,555,697 786,647,853 865,312,639 951,843,902 6.7% 6.7% 6.7% Development Gross 1,632,240,078 537,036,201 590,739,821 649,813,803 9.6% 9.6% 9.6% 2 Education Sub Total 1,155,445,718 802,063,599 882,269,958 970,496,954 4.6% 4.6% 4.6% Recurrent Gross 466,163,766 619,552,105 681,507,315 749,658,047 3.6% 3.6% 3.6% Development Gross 689,281,952 182,511,494 200,762,643 220,838,908 1.1% 1.1% 1.1% 3 Social Protection, Sub Total 408,279,638 472,988,453 520,287,298 572,316,028 2.7% 2.7% 2.7% Culture and Recurrent Gross 241,225,042 301,537,883 331,691,671 364,860,838 1.7% 1.7% 1.7% Recreations Development Gross 167,054,597 171,450,570 188,595,627 207,455,190 1.0% 1.0% 1.0% 4 Energy, Infrastructure Sub Total 2,675,698,434 1,095,517,433 1,205,069,177 1,325,576,094 6.3% 6.3% 6.3% and ICT Recurrent Gross 403,606,020 505,741,207 556,315,328 611,946,861 2.9% 2.9% 2.9% Development Gross 2,272,092,414 589,776,226 648,753,849 713,629,233 3.4% 3.4% 3.4% 5 Environment Sub Total 1,404,784,151 530,506,623 583,557,285 641,913,014 3.1% 3.1% 3.1% Protection, Water and Recurrent Gross 279,458,650 340,630,753 374,693,828 412,163,211 2.0% 2.0% 2.0% Natural Resources Development Gross 1,125,325,501 189,875,870 208,863,457 229,749,803 1.1% 1.1% 1.1% 6 General Economics Sub Total 362,868,747 377,340,294 415,074,324 456,581,756 2.2% 2.2% 2.2% and Commercial Recurrent Gross 137,277,999 186,582,394 205,240,634 225,764,697 1.1% 1.1% 1.1% Affairs Development Gross 225,590,748 190,757,900 209,833,690 230,817,059 1.1% 1.1% 1.1% 7 Health Sub Total 6,822,878,221 6,479,234,901 7,127,158,391 7,839,874,230 37.4% 37.4% 37.4% Recurrent Gross 5,278,845,780 5,631,966,274 6,195,162,901 6,814,679,192 32.5% 32.5% 32.5% Development Gross 1,544,032,440 847,268,627 931,995,489 1,025,195,038 4.9% 4.9% 4.9% 8 Public Administration Sub Total 4,865,730,580 6,223,749,760 6,846,124,736 7,530,737,209 36.0% 36.0% 36.0% and National/ Inter Recurrent Gross 2,998,915,737 3,314,799,410 3,646,279,351 4,010,907,286 19.2% 19.2% 19.2% County Relations Development Gross 1,866,814,843 2,908,950,350 3,199,845,385 3,519,829,924 16.8% 16.8% 16.8% TOTAL Total Recurrent Gross 10,482,048,690 11,687,457,879 12,856,203,667 14,141,824,033 67.5% 67.5% 67.5% Total Development 9,522,432,574 5,617,627,237 6,179,389,961 6,797,328,957 32.5% 32.5% 32.5% Gross GRAND TOTAL 20,004,481,264 17,305,085,116 19,035,593,628 20,939,152,990 100.0% 100.0% 100.0% CBROP 2020 Page | 50 Budget Framework FY2021/2022 Revenue Projections Revenue forecast for FY 2021/22 including Appropriation In Aid will rise by approximately 19 percent to Ksh 17.305 billion compared to CFSP 2020 revenue forecast. This is in account of implementation of the third-generation revenue sharing formula. The national transfers in form of equitable share of revenue and conditional grants are projected to rise by 27 percent to Ksh 14.205 billion. Summaries for both own source revenue and national transfers forecast over the medium-term period have been presented in Annex I of this document. Equitable share of revenue constitutes the largest share or total County receipts at 75 percent. Conditional grants are projected at Ksh. 1.228 billion. County own source revenues for FY2021/22 will be maintained at Ksh 3.1 billion. Facility Improvement Fund (FIF), a form of Appropriation in Aid, is projected at Ksh 1.3 billion in FY2020/2021 with local revenue projection standing at Ksh. 1.8 billion. The County’s efforts through various economic stimulus initiatives and the Post Covid- 19 Economic Recovery Strategy to stimulate and sustain economic activities, mitigate the impact of COVID-19 pandemic to the local economy and re-position the County on a steady and sustainable growth trajectory coupled with reforms in local revenue administration by the County Government are expected to strengthen local revenue performance. Expenditure Projections To achieve a balanced budget, the County Government has projected that overall expenditure will equal the forecasted County receipts for FY 2021/2022. In this regard the County Government total expenditure will stand at Ksh 17.305 billion in the FY 2021/2022. Compensation to employees will account for 37 percent of the total County budget approximately Ksh 6.5 billion. However, this proportion of the County wage bill is still way above the envisaged level of 35 CBROP 2020 Page | 51 percent of total revenues as recommended in section 25 of the PFM (County Government Regulations) 2015. The marginal growth in County allocation for salaries and wages is mainly on account of reorganization of personnel component and inclusion of contractual and casual expenditure, natural rise in annual increments. The actual personnel allocations shall be firmed up after finalisation of the County personnel budget. Allocation for other recurrent expenditures will increase by approximately 12 percent. An emergency allocation of Ksh 70 Million has been provided for under Office of the Governor to cater for County unforeseen expenditure pursuant to Section 110 of the PFM Act 2012. Counterpart funding (shilling to shilling matching) of Ksh. 66m has also been provided for in Department of Education and Vocational Training for Vocation Training Centres to match the development Conditional allocation of Ksh. 66m as per current capitation and in keeping with the grant requirements. The County allocation for development expenditure has risen from 30 percent to 32.4 percent in FY 2021/2022 excluding balances carried forward. Total County development expenditure will reach Ksh 5.617 billion up from Ksh 4.350 billion in the FY2020/2021 CFSP projections. Conditional grants will account for Ksh 1.273 billion of the development expenditure or 23 percent of the Development expenditure. Nakuru and Naivasha Municipalities have been allocated Ksh. 200m from exchequer releases for programmes and projects within the two Municipalities. This is to ensure programmes already in place are sustained even after the lapse of the UDG donor grant. The Nakuru County Revenue Allocation Act provides for allocation of not less than 45 of development excluding conditional grants. The proposed allocation to the 55 Wards in FY 2021/2022 has been set at Ksh. 1.7 billion which translates to 47% of the equitable share of development expenditure. The expenditure allocations are available in Annexes III to V. CBROP 2020 Page | 52 V. CONCLUSION AND NEXT STEP The COVID-19 pandemic and the containment measures has led to contraction of the economy disrupting businesses including international trade and leading to loss of livelihoods for many people. The resultant effects of the pandemic have also seen a slow-down in business activities and by extension revenue collection. To cushion businesses and County residents from the adverse effects of Covid-19 Pandemic and stimulate economic recovery, the County will continue to implement measures and programmes geared towards economic recovery and business stimulation. As budgetary resources are finite, it is critical that SWGs and Ministries prioritize their programmes within the available ceilings to ensure that uses of public funds are in line with County Government priorities. There is also need to ensure that current resources are being utilized efficiently and effectively before funding is considered for programmes. SWGs need to carefully consider detailed costing of projects, strategic significance, deliverables (output and outcomes), alternative interventions, and administration and implementation plans in allocation resources. The policies and sector ceilings annexed herewith will guide the County Sector Working Groups and Line Ministries in preparation of the 2021/22 budget. CBROP 2020 Page | 53 ANNEXES ANNEX I: County Government of Nakuru Operations FY 2021/2022 - 2023/2024 IFMIS REVENUE SOURCE APPROVED CBROP PROJECTIONS ANNUAL % GROWTH CODE ESTIMATES GROWTH 2020/2021 2021/2022 2022/2023 2023/2024 2021/22 2022/23 2023/24 1520101 Property tax (Plot rent and Land rates 289,390,000 289,390,000 303,859,500 319,052,475 - 0.0% 5.0% 5.0% 1520201 Trade License 330,000,000 330,000,000 346,500,000 363,825,000 - 0.0% 5.0% 5.0% 1550101 Market Fees 87,220,000 87,220,000 91,581,000 96,160,050 - 0.0% 5.0% 5.0% 1590112 Building Approval 90,000,000 90,000,000 94,500,000 99,225,000 - 0.0% 5.0% 5.0% 1520325 Cess 50,000,000 50,000,000 52,500,000 55,125,000 - 0.0% 5.0% 5.0% 1530301 Royalties 184,460,000 184,460,000 193,683,000 203,367,150 - 0.0% 5.0% 5.0% 1580401 Stock/ Slaughter fees 25,000,000 25,000,000 26,250,000 27,562,500 - 0.0% 5.0% 5.0% 1560101 House Rent 50,000,000 50,000,000 52,500,000 55,125,000 - 0.0% 5.0% 5.0% 1590132 Advertising 100,000,000 100,000,000 105,000,000 110,250,000 - 0.0% 5.0% 5.0% 1550221 Parking fees 300,000,000 300,000,000 315,000,000 330,750,000 - 0.0% 5.0% 5.0% 1420223 Liquor Licensing 72,150,000 72,150,000 75,757,500 79,545,375 - 0.0% 5.0% 5.0% 1530331 County Park Fees 750,000 750,000 787,500 826,875 - 0.0% 5.0% 5.0% 1530331 Water And Sewerage - - - 1580111 Health fees and charges 100,350,000 100,350,000 105,367,500 110,635,875 - 0.0% 5.0% 5.0% 1540105 Other Fees and Charges 120,680,000 120,680,000 126,714,000 133,049,700 - 0.0% 5.0% 5.0% Sub Total Local Sources 1,800,000,000 1,800,000,000 1,890,000,000 1,984,500,000 - 1580211 Facility Improvement Fund 1,400,000,000 1,300,000,000 1,339,000,000 1,379,170,000 (100,000,000) -7.1% 3.0% 3.0% SUB TOTAL (AIA & Local Sources) 3,200,000,000 3,100,000,000 3,229,000,000 3,363,670,000 (100,000,000) -3.1% 4.2% 4.2% 9910201 Balance in County Revenue Fund 5,624,403,839 (5,624,403,839) -100.0% 1580211 Balance in Facility Improvement Fund (FIF) Account 202,942,308 (202,942,308) 1310101 Donor Grants (DANIDA) 29,790,000 29,790,000 32,769,000 36,045,900 - 0.0% 10.0% 10.0% 1310102 Loans and Grants CRA - - - 0.0% 0.0% 1310101 Symbiocity Programme 1330203 Kenya Devolution Support Program (KDSP) Level I 45,000,000 45,000,000 49,500,000 54,450,000 - 0.0% 0.0% 0.0% 1330203 Kenya Devolution Support Program (KDSP) Level II - - - 0.0% 0.0% 0.0% CBROP 2020 Page | 54 IFMIS REVENUE SOURCE APPROVED CBROP PROJECTIONS ANNUAL % GROWTH CODE ESTIMATES GROWTH 2020/2021 2021/2022 2022/2023 2023/2024 2021/22 2022/23 2023/24 1310102 World bank National Agricultural and Rural inclusive 198,441,600 198,441,600 218,285,760 240,114,336 - 0.0% 0.0% growth Projects (NARIGP) 1310102 Agricultural Sector Development Support Projects 14,171,667 14,171,667 15,588,834 17,147,717 - 0.0% 0.0% (ASDSP) 1330104 Conditional Allocation to compensate Forgone user 38,723,265 38,723,265 42,595,592 46,855,151 - 0.0% 0.0% 0.0% fees 1330302 Conditional Fund -Kenya Urban Support Project - - - 0.0% 0.0% (KUSP) - Urban Development Grant 1330399 Conditional Fund -Kenya Urban Support Project - - - 0.0% 0.0% (KUSP) - Urban Institutional Grant 1330104 Conditional Fund -Leasing of Medical Equipment 132,021,277 132,021,277 145,223,405 159,745,745 - 0.0% 0.0% 0.0% 1330104 Conditional Fund -Free Maternal Health - - - 1330102 Road Maintenance Fuel Levy Fund (RMFLF) 290,544,581 290,544,581 319,599,039 351,558,943 - 0.0% 10.0% 10.0% 1330104 Conditional Allocation For Level 5 Hospital 373,872,832 373,872,832 411,260,115 452,386,127 - 0.0% 10.0% 10.0% 1310102 World Bank THS-UC Conditional allocation 40,080,000 40,080,000 44,088,000 48,496,800 - 9910201 Conditional Allocation for Rehabilitation of Youth 66,289,894 66,289,894 72,918,883 80,210,772 Polytechnics 9999999 C.R.A Equitable Share 9,748,200,000 12,976,150,000 14,273,765,000 15,701,141,500 3,227,950,000 33.1% 10.0% 10.0% SUB TOTAL 16,804,481,264 14,205,085,116 15,625,593,628 17,188,152,990 (2,599,396,148) -15.5% 40.0% 40.0% GRAND TOTAL 20,004,481,264 17,305,085,116 18,854,593,628 20,551,822,990 (2,699,396,148) -13.5% 44.2% 44.2% Allocation For Ward Projects Total Development Budget 9,522,432,574 5,617,627,237 6,179,389,961 6,797,328,957 (3,904,805,336) -41.0% 10.0% 10.0% Less Development Conditional Grant 1,519,339,019 1,273,500,869 1,400,850,955 1,540,936,051 (245,838,150) -16.2% 10.0% 10.0% Debt Resolution 180,000,000 500,000,000 550,000,000 605,000,000 320,000,000 177.8% 10.0% 10.0% Ongoing Projects 6,308,328,347 - - (6,308,328,347) -100.0% 0.0% 0.0% Nakuru & Naivasha Municipalities 200,000,000 220,000,000 242,000,000 200,000,000 100.0% 10.0% 10.0% Equitable Allocation 1,514,765,207 3,644,126,369 4,008,539,005 4,409,392,906 2,129,361,161 140.6% 10.0% 10.0% County Assembly HQ Development 200,000,000 80,000,000 88,000,000 96,800,000 (120,000,000) -60.0% 0.0% 0.0% Flagship HQ development 498,765,207 1,944,126,369 2,050,539,005 2,255,592,906 1,365,361,161 0.0% 0.0% - 45% of Equitable Allocation for Ward Projects 816,000,000 1,700,000,000 1,870,000,000 2,057,000,000 884,000,000 108.3% 10.0% 10.0% CBROP 2020 Page | 55 IFMIS REVENUE SOURCE APPROVED CBROP PROJECTIONS ANNUAL % GROWTH CODE ESTIMATES GROWTH 2020/2021 2021/2022 2022/2023 2023/2024 2021/22 2022/23 2023/24 Expenditure: Current Expenditure: Compensation to Employees 6,928,317,971 6,552,588,959 7,142,321,966 7,785,130,942 (375,729,012) -5.4% 0.0% 0.0% Use Of Goods And Services 3,061,444,434 3,879,434,672 4,228,583,793 4,609,156,334 817,990,239 26.7% 0.0% 0.0% Grants And Other Transfers 285,525,715 1,255,434,247 1,355,868,987 1,464,338,506 969,908,532 0.0% 0.0% Other Recurrent 206,760,571 - - (206,760,571) 0.0% 0.0% 0.0% Sub Total: 10,482,048,690 11,687,457,879 12,726,774,746 13,858,625,783 1,205,409,189 11.5% 0.0% 0.0% Capital Expenditure: Acquisition Of Non-Financial Assets 5,274,805,716 2,144,126,369 2,548,750,469 3,076,604,994 (3,130,679,348) -59.4% 0.0% 0.0% Capital Grants To Governmental Agencies 4,247,626,857 1,773,500,869 1,950,850,955 2,145,936,051 (2,474,125,989) -58.2% 0.0% 0.0% Other Development 1,700,000,000 1,870,000,000 2,057,000,000 1,700,000,000 0.0% 0.0% 0.0% Sub Total: 9,522,432,574 5,617,627,237 6,369,601,425 7,279,541,045 (3,904,805,336) -41.0% 0.0% 0.0% Grand Total: 20,004,481,264 17,305,085,116 19,096,376,170 21,138,166,827 (2,699,396,148) -13.5% 0.0% 0.0% DEFICIT/ SURPLUS - 0 PERCENT OF TOTAL BUDGET Current Expenditure: 52% 68% 67% 66% Capital Expenditure: 48% 32% 33% 34% CBROP 2020 Page | 56 ANNEX II: Trend in Growth of Equitable Share of Revenue EXCHEQUER RECEIPTS TRENDS ALLOCATION GROWTH % GROWTH 2013/2014 (Base Year) 5,936,875,619 5,936,875,619 100% 2014/2015 7,082,152,961 1,145,277,342 19% 2015/2016 8,116,330,943 1,034,177,982 15% 2016/2017 8,757,624,645 641,293,702 8% 2017/2018 9,271,400,000 513,775,355 6% 2018/2019 9,451,400,000 180,000,000 2% 2019/2020 10,476,150,000 1,024,750,000 11% 2020/2021 (CARA Bill, April 2020) 9,748,200,000 (727,950,000) -7% 2021/2022 (CBROP 2020 Projected Growth) 12,976,150,000 3,227,950,000 33% CBROP 2020 Page | 57 Annex III: Total Expenditure Sector Ceilings for the Period 2021/2022 - 2023/2024 SECTOR SUB SECTOR APPROVED CBROP PROJECTIONS ESTIMATES CEILINGS 2022/2023 2023/2024 FY 2020/2021 2021/2022 1 Agriculture Rural and 1.1 Urban Development Agriculture, Livestock and Fisheries Compensation to Employees 409,988,511 424,390,396 466,829,435 513,512,379 Use of Goods & Maintenance 131,130,908 200,741,334 220,815,468 242,897,015 Development Gross 469,395,549 355,835,977 391,419,575 430,561,532 Sub Total 1,010,514,967 980,967,707 1,079,064,478 1,186,970,926 1.2 Lands, Physical Planning and Housing Compensation to Employees 100,266,520 101,269,185 111,396,103 122,535,714 Use of Goods & Maintenance 35,169,758 60,246,938 66,271,632 72,898,795 Development Gross 1,162,844,530 181,200,224 199,320,246 219,252,270 Sub Total 1,298,280,808 342,716,346 376,987,981 414,686,779 SUB TOTAL (SECTOR) 2,308,795,775 1,323,684,054 1,456,052,459 1,601,657,705 2 Education 2.1 Education Compensation to Employees 279,814,072 282,612,212 310,873,434 341,960,777 Use of Goods & Maintenance 99,437,886 200,365,624 220,402,186 242,442,405 Development Gross 366,477,896 58,110,800 63,921,880 70,314,068 Sub Total 745,729,854 541,088,636 595,197,500 654,717,250 2.2 Vocational Training Compensation to Employees - - Use of Goods & Maintenance 86,911,808 136,574,268 150,231,695 165,254,865 Development Gross 322,804,056 124,400,694 136,840,763 150,524,840 Sub Total 409,715,864 260,974,962 287,072,458 315,779,704 SUB TOTAL (SECTOR) 1,155,445,718 802,063,599 882,269,958 970,496,954 3 Social Protection, 3.1 Culture and Recreation Youth, Sports, Culture and Social Services. Compensation to Employees 125,826,266 128,205,628 141,026,191 155,128,810 Use of Goods & Maintenance 115,398,776 173,332,254 190,665,480 209,732,028 CBROP 2020 Page | 58 SECTOR SUB SECTOR APPROVED CBROP PROJECTIONS ESTIMATES CEILINGS 2022/2023 2023/2024 FY 2020/2021 2021/2022 Development Gross 167,054,597 171,450,570 188,595,627 207,455,190 Sub Total 408,279,638 472,988,453 520,287,298 572,316,028 SUB TOTAL (SECTOR) 408,279,638 472,988,453 520,287,298 572,316,028 4 Energy, Infrastructure 4.1 and ICT Infrastructure Compensation to Employees 148,057,021 149,537,591 164,491,350 180,940,485 Use of Goods & Maintenance 216,980,499 306,041,117 336,645,229 370,309,751 Development Gross 2,240,633,129 534,665,526 588,132,079 646,945,286 Sub Total 2,605,670,649 990,244,234 1,089,268,657 1,198,195,523 4.2 ICT and E-Government Compensation to Employees - - Use of Goods & Maintenance 38,568,500 50,162,500 55,178,750 60,696,624 Development Gross 31,459,285 55,110,700 60,621,770 66,683,947 Sub Total 70,027,785 105,273,200 115,800,520 127,380,571 SUB TOTAL (SECTOR) 2,675,698,434 1,095,517,433 1,205,069,177 1,325,576,094 5 Environment 5.1 Protection, Water and Water, Environment, Energy and Natural Natural Resources Resources Compensation to Employees 233,101,636 240,482,652 264,530,917 290,984,009 Use of Goods & Maintenance 46,357,014 100,148,101 110,162,911 121,179,202 Development Gross 1,125,325,501 189,875,870 208,863,457 229,749,803 Sub Total 1,404,784,151 530,506,623 583,557,285 641,913,014 SUB TOTAL (SECTOR) 1,404,784,151 530,506,623 583,557,285 641,913,014 6 General Economics 6.1 and Commercial Trade, Industry, Marketing and Tourism Affairs Compensation to Employees 69,465,834 70,160,493 77,176,542 84,894,197 Use of Goods & Maintenance 67,812,165 116,421,901 128,064,091 140,870,501 Development Gross 225,590,748 190,757,900 209,833,690 230,817,059 Sub Total 362,868,747 377,340,294 415,074,324 456,581,756 SUB TOTAL (SECTOR) 362,868,747 377,340,294 415,074,324 456,581,756 CBROP 2020 Page | 59 SECTOR SUB SECTOR APPROVED CBROP PROJECTIONS ESTIMATES CEILINGS 2022/2023 2023/2024 FY 2020/2021 2021/2022 7 Health 7.1 Health Services Compensation to Employees 3,954,645,387 3,953,803,596 4,349,183,956 4,784,102,352 Use of Goods & Maintenance 1,324,200,393 1,678,162,678 1,845,978,945 2,030,576,840 Development Gross 1,544,032,440 847,268,627 931,995,489 1,025,195,038 Sub Total 6,822,878,221 6,479,234,901 7,127,158,391 7,839,874,230 SUB TOTAL (SECTOR) 6,822,878,221 6,479,234,901 7,127,158,391 7,839,874,230 8 Public Administration 8.1 and National/ Inter Office of the Governor and Deputy County Relations Governor Compensation to Employees 94,514,968 114,279,201 125,707,121 138,277,833 Use of Goods & Maintenance 220,390,824 238,139,554 261,953,509 288,148,860 Development Gross 98,954,766 86,511,000 95,162,100 104,678,310 Sub Total 413,860,558 438,929,755 482,822,730 531,105,004 8.2 County Treasury Compensation to Employees 496,164,176 517,523,577 569,275,934 626,203,528 Use of Goods & Maintenance 379,990,138 525,469,597 578,016,557 635,818,213 Development Gross 667,050,485 2,419,056,500 2,660,962,150 2,927,058,365 Sub Total 1,543,204,800 3,462,049,674 3,808,254,641 4,189,080,106 8.3 Public Service, Training and Devolution Compensation to Employees 519,706,712 531,640,789 584,804,868 643,285,355 Use of Goods & Maintenance 185,496,696 220,523,053 242,575,358 266,832,894 Development Gross 51,888,289 113,891,950 125,281,145 137,809,260 Sub Total 757,091,697 866,055,792 952,661,371 1,047,927,508 8.4 County Public Service Board Compensation to Employees 33,661,028 33,997,639 37,397,403 41,137,143 Use of Goods & Maintenance 34,483,762 42,500,000 46,750,000 51,425,000 Development Gross 1,810,000 9,490,900 10,439,990 11,483,989 Sub Total 69,954,790 85,988,539 94,587,393 104,046,132 CBROP 2020 Page | 60 SECTOR SUB SECTOR APPROVED CBROP PROJECTIONS ESTIMATES CEILINGS 2022/2023 2023/2024 FY 2020/2021 2021/2022 8.5 County Assembly Compensation to Employees 458,466,236 - - - Use of Goods & Maintenance 524,753,000 1,000,000,000 1,100,000,000 1,210,000,000 Development Gross 271,189,290 80,000,000 88,000,000 96,800,000 Sub Total 1,254,408,526 1,080,000,000 1,188,000,000 1,306,800,000 8.6 Nakuru Municipality Compensation to Employees 2,319,802 2,343,000 2,577,300 2,835,030 Use of Goods & Maintenance 25,090,888 45,520,000 50,072,000 55,079,200 Development Gross 529,825,868 148,399,090 163,238,999 179,562,899 Sub Total 557,236,558 196,262,090 215,888,299 237,477,129 8.7 Naivasha Municipality Compensation to Employees 2,319,802 2,343,000 2,577,300 2,835,030 Use of Goods & Maintenance 21,557,704 40,520,000 44,572,000 49,029,200 Development Gross 246,096,145 51,600,910 56,761,001 62,437,101 Sub Total 269,973,651 94,463,910 103,910,301 114,301,331 SUB TOTAL (SECTOR) 4,865,730,580 6,223,749,760 6,846,124,736 7,530,737,209 Total Compensation to Employees 6,928,317,971 6,552,588,959 7,207,847,855 7,928,632,641 TOTAL Total Use of Goods & Maintenance 3,553,730,719 5,134,868,920 5,648,355,812 6,213,191,393 Total Development Gross 9,522,432,574 5,617,627,237 6,179,389,961 6,797,328,957 GRAND TOTAL 20,004,481,264 17,305,085,116 19,035,593,628 20,939,152,990 CBROP 2020 Page | 61 Annex IV: Total Recurrent Expenditure Ceilings for the Period 2021/2022 - 2023/2024 VOTE Source of Funding APPROVED ESTIMATES CBROP CEILINGS PROJECTIONS 2020/2021 2021/2022 2022/2023 2023/2024 Office of the Governor and Gross Allocation 314,905,792 352,418,755 387,660,630 426,426,694 Deputy Governor Local Revenue 47,235,869 88,104,689 96,915,158 106,606,673 CRA Equitable 267,669,923 264,314,066 290,745,473 319,820,020 Share County Treasury Gross Allocation 876,154,314 1,042,993,174 1,147,292,491 1,262,021,741 Local Revenue 124,673,147 249,498,294 274,448,123 301,892,935 Conditional Grant 45,000,000 45,000,000 49,500,000 54,450,000 CRA Equitable 706,481,167 748,494,881 823,344,369 905,678,805 Share County Public Service Board Gross Allocation 68,144,790 76,497,639 84,147,403 92,562,143 Local Revenue 10,221,719 19,124,410 21,036,851 23,140,536 CRA Equitable 57,923,072 57,373,229 63,110,552 69,421,607 Share Public Service, Training and Gross Allocation 705,203,408 752,163,842 827,380,226 910,118,249 Devolution Local Revenue 105,780,511 188,040,960 206,845,057 227,529,562 CRA Equitable 599,422,897 564,122,881 620,535,170 682,588,687 Share Health Gross Allocation 5,278,845,780 5,631,966,274 6,195,162,901 6,814,679,192 Local Revenue 578,356,171 919,071,726 1,010,978,898 1,112,076,788 AIA 1,129,483,399 910,000,000 1,001,000,000 1,101,100,000 Conditional Grant 293,654,577 345,434,247 379,977,672 417,975,439 CRA Equitable 3,277,351,633 3,282,399,020 3,610,638,922 3,971,702,814 Share Trade, Industry, Marketing and Gross Allocation 137,277,999 186,582,394 205,240,634 225,764,697 Tourism Local Revenue 20,591,700 46,645,599 51,310,158 56,441,174 CRA Equitable 116,686,299 139,936,796 153,930,475 169,323,523 Share Infrastructure Gross Allocation 365,037,520 455,578,708 501,136,578 551,250,236 Local Revenue 54,755,628 113,894,677 125,284,145 137,812,559 CRA Equitable 310,281,892 341,684,031 375,852,434 413,437,677 Share CBROP 2020 Page | 62 VOTE Source of Funding APPROVED ESTIMATES CBROP CEILINGS PROJECTIONS 2020/2021 2021/2022 2022/2023 2023/2024 Education, Vocational Training, Gross Allocation 504,732,266 669,714,604 736,686,065 810,354,671 ICT and E-Government Local Revenue 54,213,659 120,856,178 132,941,795 146,235,975 Bursary & 143,307,875 186,289,894 204,918,883 225,410,772 Counterpart Funding CRA Equitable 307,210,732 362,568,533 398,825,386 438,707,924 Share Agriculture, Livestock and Gross Allocation 541,119,419 625,131,730 687,644,903 756,409,394 Fisheries Local Revenue 81,167,913 156,282,933 171,911,226 189,102,348 CRA Equitable 459,951,506 468,848,798 515,733,678 567,307,045 Share Lands, Physical Planning and Gross Allocation 135,436,278 161,516,123 177,667,735 195,434,509 Housing Local Revenue 20,315,442 40,379,031 44,416,934 48,858,627 CRA Equitable 115,120,836 121,137,092 133,250,801 146,575,882 Share Youth, Culture, Sports and Gross Allocation 241,225,042 301,537,883 331,691,671 364,860,838 Social Services. Local Revenue 36,183,756 75,384,471 82,922,918 91,215,210 CRA Equitable 205,041,285 226,153,412 248,768,753 273,645,629 Share Water, Environment, Energy Gross Allocation 279,458,650 340,630,753 374,693,828 412,163,211 and Natural Resources Local Revenue 41,918,798 85,157,688 93,673,457 103,040,803 CRA Equitable 237,539,853 255,473,065 281,020,371 309,122,408 Share County Assembly Gross Allocation 983,219,236 1,000,000,000 1,100,000,000 1,210,000,000 Local Revenue 147,482,885 250,000,000 275,000,000 302,500,000 CRA Equitable 835,736,351 750,000,000 825,000,000 907,500,000 Share Nakuru Municipality Gross Allocation 27,410,690 47,863,000 52,649,300 57,914,230 Local Revenue 4,111,603 11,965,750 13,162,325 14,478,558 Conditional Grant - - - - CRA Equitable 23,299,086 35,897,250 39,486,975 43,435,673 Share CBROP 2020 Page | 63 VOTE Source of Funding APPROVED ESTIMATES CBROP CEILINGS PROJECTIONS 2020/2021 2021/2022 2022/2023 2023/2024 Naivasha Municipality Gross Allocation 23,877,506 42,863,000 47,149,300 51,864,230 Local Revenue 3,581,626 10,715,750 11,787,325 12,966,058 Conditional Grant - - - - CRA Equitable 20,295,880 32,147,250 35,361,975 38,898,173 Share SUB TOTAL 10,482,048,690 11,687,457,879 12,856,203,667 14,141,824,033 CBROP 2020 Page | 64 Annex V: Total Development Expenditure Ceilings for the Period 2021/2022 - 2023/2024 VOTE Source of Funding APPROVED CBROP CEILINGS PROJECTIONS ESTIMATES 2021/2022 2022/2023 2023/2024 2020/2021 Office of the Governor and Deputy Gross Allocation 98,954,766 86,511,000 95,162,100 104,678,310 Governor Local Revenue 14,843,215 21,627,750 23,790,525 26,169,578 CRA Equitable 84,111,551 64,883,250 71,371,575 78,508,733 Share County Treasury Gross Allocation 667,050,485 2,419,056,500 2,660,962,150 2,927,058,365 Local Revenue 100,057,573 54,764,125 60,240,538 66,264,591 Debt Resolution 500,000,000 550,000,000 605,000,000 Ward Allocation 1,700,000,000 1,870,000,000 2,057,000,000 CRA Equitable 566,992,913 164,292,375 180,721,613 198,793,774 Share County Public Service Board Gross Allocation 1,810,000 9,490,900 10,439,990 11,483,989 Local Revenue 271,500 2,372,725 2,609,998 2,870,997 CRA Equitable 1,538,500 7,118,175 7,829,993 8,612,992 Share Public Service, Training and Gross Allocation 51,888,289 113,891,950 125,281,145 137,809,260 Devolution Local Revenue 7,783,243 28,472,988 31,320,286 34,452,315 CRA Equitable 44,105,046 85,418,963 93,960,859 103,356,945 Share Health Gross Allocation 1,544,032,440 847,268,627 931,995,489 1,025,195,038 Local Revenue 126,961,965 35,803,875 39,384,263 43,322,689 AIA 162,000,000 390,000,000 429,000,000 471,900,000 Conditional Grant 535,619,340 314,053,127 345,458,439 380,004,283 CRA Equitable 719,451,135 107,411,625 118,152,788 129,968,066 Share Trade, Industry, Marketing and Tourism Gross Allocation 225,590,748 190,757,900 209,833,690 230,817,059 Local Revenue 33,838,612 47,689,475 52,458,423 57,704,265 CRA Equitable 191,752,136 143,068,425 157,375,268 173,112,794 Share CBROP 2020 Page | 65 VOTE Source of Funding APPROVED CBROP CEILINGS PROJECTIONS ESTIMATES 2021/2022 2022/2023 2023/2024 2020/2021 Infrastructure Gross Allocation 2,240,633,129 534,665,526 588,132,079 646,945,286 Local Revenue 292,513,282 61,030,236 67,133,260 73,846,586 Conditional Grant 290,544,581 290,544,581 319,599,039 351,558,943 CRA Equitable 1,657,575,266 183,090,709 201,399,780 221,539,758 Share Education, Vocational Training, ICT and Gross Allocation 720,741,237 237,622,194 261,384,413 287,522,855 E-Government Local Revenue 98,167,701 42,833,075 47,116,383 51,828,021 Conditional Grant 66,289,894 66,289,894 72,918,883 80,210,772 CRA Equitable 556,283,641 128,499,225 141,349,148 155,484,062 Share Agriculture, Livestock and Fisheries Gross Allocation 469,395,549 355,835,977 391,419,575 430,561,532 Local Revenue 38,517,342 35,805,678 39,386,245 43,324,870 Conditional Grant 212,613,267 212,613,267 233,874,594 257,262,053 CRA Equitable 218,264,939 107,417,033 118,158,736 129,974,609 Share Lands, Physical Planning and Housing Gross Allocation 1,162,844,530 181,200,224 199,320,246 219,252,270 Local Revenue 244,197,351 45,300,056 49,830,061 54,813,068 CRA Equitable 918,647,179 135,900,168 149,490,184 164,439,203 Share Youth, Culture, Sports and Social Gross Allocation 167,054,597 171,450,570 188,595,627 207,455,190 Services. Local Revenue 25,058,190 42,862,643 47,148,907 51,863,797 CRA Equitable 141,996,407 128,587,928 141,446,720 155,591,392 Share Water, Environment, Energy and Gross Allocation 1,125,325,501 189,875,870 208,863,457 229,749,803 Natural Resources Local Revenue 168,798,825 47,468,968 52,215,864 57,437,451 CRA Equitable 956,526,676 142,406,903 156,647,593 172,312,352 Share County Assembly Gross Allocation 271,189,290 80,000,000 88,000,000 96,800,000 Local Revenue 40,678,393 20,000,000 22,000,000 24,200,000 CRA Equitable 230,510,896 60,000,000 66,000,000 72,600,000 Share CBROP 2020 Page | 66 VOTE Source of Funding APPROVED CBROP CEILINGS PROJECTIONS ESTIMATES 2021/2022 2022/2023 2023/2024 2020/2021 Nakuru Municipality Gross Allocation 529,825,868 148,399,090 163,238,999 179,562,899 Local Revenue 100,427,241 37,099,773 40,809,750 44,890,725 Conditional Grant 51,600,910 - - - CRA Equitable 377,797,717 111,299,318 122,429,249 134,672,174 Share Naivasha Municipality Gross Allocation 246,096,145 51,600,910 56,761,001 62,437,101 Local Revenue 51,680,190 12,900,228 14,190,250 15,609,275 Conditional Grant - - - - CRA Equitable 194,415,955 38,700,683 42,570,751 46,827,826 Share SUB TOTAL 9,522,432,574 5,617,627,237 6,179,389,961 6,797,328,957 CBROP 2020 Page | 67 Annex VI: Sector Composition and Sector Working Groups for MTEF Budget 2021/2022 - 2023/2024 CLASSIFICATION OF SECTOR SECTOR COMPOSITION (S) FUNCTIONS OF GOVERNMENT (COFOG) General Public Services Public Administration and Office of the Governor and Deputy National /Inter County Governor Relations County Public Service Board Finance and Economic Planning Public Service, Training & Devolution County Assembly Nakuru Municipality Naivasha Municipality Recreation, Culture and Social Social Protection, Culture and Dept. of Gender, Culture, Social Protection Recreation Services Dept. of Youth & Sports Education Education Dept. of Education Dept. of Vocational Training Economic Affairs Agriculture Rural and Urban Agriculture, Livestock and Fisheries Development Lands physical planning and housing General Economics and Trade, Tourism, Industry Commercial Affairs and Cooperatives Energy Infrastructure and ICT Roads, Public Works and Transport ICT and E-Government Environment Protection Environment Protection Water Water, Environment, Energy and and Natural Resources Natural resources Health Health County Health Services Macro Working Group Macro Working Group Department of Finance and Economic Planning CBROP 2020 Page | 68 Annex VII: Nakuru County Budget Calendar for the FY2021/2022 ACTIVITY RESPONSIBILITY DEADLINE 1 Performance Review and Strategic Planning County Treasury July-Aug 2020 1.1 Develop strategic plans Departments " 1.2 Prepare Annual Development Plans " " 1.3 Expenditure review " " 1.4 Preparation of Annual Work plans " “ 2 Develop and Issue County Budget Guidelines County Treasury 30th Aug 2020 3 Annual Development Plan submitted to County Treasury 1st Sept. 2020 County Assembly 4 Launch of Sector Working Groups County Treasury 4th Sept. 2020 5 Determination of Fiscal Framework Macro Working Group 15th Sept. 2020 5.1 Estimation of Resource Envelop County Treasury " 5.2 Determination of policy priorities " " 5.3 Preliminary Resource allocation to Sectors, " " Assembly & Sub Counties 5.4 Draft County Budget Review and Outlook " 21st Sept. 2020 Paper (CBROP) 5.5 Submission and approval by County " 30th Sept. 2020 Executive Committee 5.6 Tabling of CBROP to County Assembly " 9th Oct. 2020 5.7 Capacity building on MTEF Programme " 12th-16th Oct 2020 Based Budget and Sector Reports 6 Preparation of County Budget Proposals Line Ministries 6.1 Draft Sector Report Sector Working Group 23rd Oct. 2020 6.2 Submission of Draft Sector Report to County Sector Working Group 30th Oct. 2020 Treasury 6.3 Review of draft Sector Report Proposals Macro Working Group 9th -13th Nov 2020 7 Stakeholders/Public Participation Treasury/Departments November 2020 8 The 2020/2021 Supplementary Budget 8.1 Develop and issue guidelines on the 2020/21 County Treasury November 2020 Revised Budget 9 Draft Budget Estimates/ Macro Working Group / County Fiscal Strategy Paper (CFSP) Departments 9.1 Preparation and consolidation of County PSTD/County Treasury 11th-15th Jan. 2021 Personnel Budget 9.2 Public Sector Hearing on CFSP 2021 Macro Working Group 18th-22nd Jan. 2021 9.3 Submission of Draft Budget Estimates and Departments 31st Jan. 2021 Final Sector Reports 9.3 Budget hearings on Draft Budget Estimates Macro Working Group 8th-12th Feb. 2021 9.4 Submission of Draft CFSP & Debt Paper to County Treasury 19th Feb. 2021 County Executive Committee for approval CBROP 2020 Page | 69 ACTIVITY RESPONSIBILITY DEADLINE 9.5 Submission of CFSP to County Assembly for County Treasury 28th Feb. 2021 approval 9.6 Submission of Debt Management Strategy County Treasury 28th Feb. 2021 Paper to County Assembly for approval 10 Preparation and approval of Final Departments’ Programme Budgets 10.1 Issue final guidelines on preparation of County Treasury 15th March, 2021 2021/22 County Budget 10.2 Public Participation for identification of Ward County Treasury 22nd – 26th, March based projects 2021 10.3 Submission of Departmental Budget Line Departments 31st March, 2021 proposals to County Treasury 10.4 Consolidation of the Departmental Budget County Treasury 12th – 23rd April, 2021 Estimates and uploading to IFMIS Hyperion System 10.5 Submission of Original Budget Estimates for County Treasury 26th April, 2021 County Government to County Executive 10.6 Submission of Original Budget Estimates for County Treasury 30th April, 2021 County Government to County Assembly 10.7 Review of Original Budget Estimates by County Assembly May, 2021 Departmental Committees 10.8 Report on Original Budget by Budget and County Assembly 24th May, 2021 Appropriations Committee (County Assembly) 11 11.1 Preparation of Annual Cashflow County Treasury 2nd-8th June 2021 11.2 Submission of Annual Cashflow to Controller County Treasury 15th June, 2021 of Budget 11.3 Submission of Appropriation Bill to County County Treasury 15th June, 2021 Assembly 11.4 Resolution of County Assembly on Estimates County Treasury 24th June, 2021 and Approval 11.5 Budget Statement County Treasury 24th June, 2021 11.6 Appropriation Bill Passed County Assembly 30th June, 2021 CBROP 2020 Page | 70