COUNTY GOVERNMENT OF MACHAKOS COUNTY FISCAL STRATEGY PAPER- 2021 CONSOLIDATING ECONOMIC GAINS FOR SUSTAINABLE SOCIAL ECONOMIC GROWTH February, 2021 Vision Statement A First World County with high quality life to all citizens in a clean and secure environment Mission Statement To transform livelihoods through speedy, efficient, inclusive and sustainable development Core Values and Principles Transparency and Accountability Efficiency and Effectiveness Innovation and Creativity Public Participation Responsiveness Integrity Equity © County Fiscal Strategy Paper (CFSP) 2021 The County Treasury P. O. Box 1996-90100 MACHAKOS, KENYA Email: info@machakosgovernment.co.ke Website: www.machakosgovernment.co.ke This document is also available at www.machakosgovernment.co.ke Page 1 Page 2 Table of Contents Foreword ................................................................................................................................................. 2 Table of Contents .................................................................................................................................... 3 Abbreviations and Acronyms ................................................................................................................... 5 1.0 COUNTY FISCAL STRATEGY PAPER PROCESS OVERVIEW ................................................................. 6 1.1 Introduction ............................................................................................................................. 6 1.2 County Fiscal Strategy Paper Process ........................................................................................ 6 1.3 Legal Basis for Preparation of County Fiscal Strategy Paper .......................................................... 6 1.4 Rationale for the Fiscal Strategy Paper .......................................................................................... 7 1.5 Outline of the 2021 County Fiscal Strategy Paper ........................................................................ 7 CHAPTER TWO ....................................................................................................................................... 8 2.0 RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK ................................................................... 8 2.1 Introduction ............................................................................................................................. 8 2.2 Global & Regional Economy ..................................................................................................... 8 2.3.2 National Economic Outlook.................................................................................................. 9 2.2.1 County Economic Outlook.................................................................................................... 9 CHAPTER THREE ................................................................................................................................... 11 3.0 CONSOLIDATING ECONOMIC GAINS FOR SUSTAINABLE SOCIAL ECONOMIC GROWTH ......... 11 3.1 Overview ............................................................................................................................... 11 3.2 County Strategic Objectives.................................................................................................... 12 3.2.1 Agriculture and Co-operative Development sector............................................................. 12 3.2.2 Health Sector ...................................................................................................................... 13 3.2.3 Energy, Infrastructure and ICT Sector ................................................................................ 14 3.2.4 Public Administration......................................................................................................... 15 3.2.5 Education, Youth and Social Welfare ................................................................................. 16 3.2.6 Land, Environment and Natural Resources ......................................................................... 18 3.2.7 Water and Irrigation Sector ............................................................................................... 19 3.2.8 Commercial and Tourism ................................................................................................... 20 CHAPTER FOUR ................................................................................................................................. 21 4.0 FISCAL POLICY AND BUDGET FRAMEWORK ............................................................................ 21 4.1 Overview ............................................................................................................................... 21 Page 3 4.2 Fiscal Responsibility Principles ............................................................................................... 22 4.3 Performance Review............................................................................................................... 22 4.4 Expenditures .......................................................................................................................... 23 4.5 Resource Envelope.................................................................................................................. 24 4.6 Criteria for Resource Sharing ................................................................................................. 26 Annex I: Expenditure by Economic Classification .............................................................................. 29 Annex II : Compensation of employees per Department ................................................................... 35 Annex III: County Own Source Revenue Projections .......................................................................... 36 Annex IV: Machakos County Sector Composition .............................................................................. 37 Page 4 Abbreviations and Acronyms ADP Annual Development Plan BPS Budget Policy Statement CBROP County Budget Review and Outlook Paper CCTV Closed Circuit Television CFSP County Fiscal Strategy Paper CIDP County Integrated Development Plan DANIDA Danish International Development Agency ECDE Early Childhood Education Development FY Financial Year GDP Gross Domestic Product ICT Information Communication Technology KUSP Kenya Urban Support Program PFMA Public Finance Management Act MTEF Medium Term Expenditure Framework OVC Orphans and Vulnerable Children PWDs People Living with Disabilities TIPs Transitional Implementation Plans WAN World Area Network Page 5 CHAPTER ONE 1.0 COUNTY FISCAL STRATEGY PAPER PROCESS OVERVIEW 1.1 Introduction 1. The 2021 County Fiscal Strategy Paper lays down the frame work for the preparation of the 2021/2022 Budgets Estimates. It details the following: i. The broad fiscal parameters for the 2021/22 budget and the key strategies and policies for management of revenues and expenditures ii. The principles that will guide the 2021/2022 budget process. iii. The broad strategic priorities and policy goals that will guide the preparation of the budget over the medium term. iv. The medium–term outlook for County Government revenues and expenditures v. A discussion of how the Budget Strategies relates to the County priorities as drawn from the County Integrated Development Plan (CIDP) 2018- 2022 1.2 County Fiscal Strategy Paper Process 2. As per the requirement of the Public Finance Management Act, 2012 section 117(5) the County Government has taken into consideration views of various stakeholders during the preparation of the 2021 County Fiscal Strategy Paper. 1.3 Legal Basis for Preparation of County Fiscal Strategy Paper 3. The County Treasury, pursuant to section 117(1) of the Public Finance Management Act (PFMA), 2012 is mandated to prepare and forward the Fiscal Strategy Paper to the County Executive Committee for approval and subsequently submit the approved CFSP to County Assembly, by 28th February of each year. 4. In accordance with section 117(2) of PFM Act, the County Treasury has aligned the proposed revenue and expenditure plan to the national financial objectives in the Budget Policy Statement. (BPS) 5. The County Treasury shall include in its County Fiscal Strategy Paper the financial outlook to County Government revenues, expenditures and borrowing for the coming financial year and over the medium term. Page 6 1.4 Rationale for the Fiscal Strategy Paper 6. This strategy paper articulates priority socio-economic policies and structural reforms as well as sectoral expenditure programs to be implemented in the fiscal year 2021/22 and the medium term. Specifically, the County Fiscal Strategy Paper aims to; i. Specify the broad strategic priorities and policy goals that will guide the County Government in preparing its budget for the coming financial year and over the medium term; ii. Provide Linkage with the national objectives in the Budget Policy Statement; iii. Provide the financial outlook with respect to County Government revenues, expenditures and borrowing over the medium term; and iv. Provide a basis for stakeholder engagement in the formulation and implementation of County priorities and budgeting. 1.5 Outline of the 2021 County Fiscal Strategy Paper 7. The report is structured into four sections as follows; a) Chapter One provides an overview of the report b) Chapter Two outlines the recent economic development and fiscal outlook at the Global, National and County Levels. c) Chapter Three outlines the County strategic objectives and the various programmes that the County is implementing to achieve her objectives. d) Chapter Four covers the fiscal and budget framework with projected resource envelop and departmental ceilings. Page 7 CHAPTER TWO 2.0 RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK 2.1 Introduction 8. This section gives an over view of the recent economic developments at the global, national and county levels. 2.2 Global & Regional Economy 9. World economic growth is projected to rebound to 5.2 % in 2021 from a contraction of 4.4 % in 2020 mainly supported by a gradual strengthening in consumption and investment is also expected to firm up. Growth in the advanced economies is projected to improve to 3.9 % in 2021 compared to a contraction of 5.8 % in 2020 supported by improved growths in the major economies particularly the United States and the United Kingdom. Growth in the Euro area is also projected to improve to 5.2 % from a contraction of 8.3 % in 2020. 10. The pandemic is expected to leave long lasting adverse effects in global growth over the next decade due to underinvestment, underemployment and declined labor force in many advanced economies. However, with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5% in 2021. 11. Policy makers need to put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth. They need to continue to sustain recovery, gradually shifting from income support to growth enhancing policies. 12. The Sub Saharan Africa Region economic activity is on course to rise by 2.7% by 2021. (World Bank report) Output contracted by an estimated 3.7% in 2020, as the COVID-19 pandemic and associated lockdowns disrupted economic activity. Hardest hit were countries with large domestic outbreaks, those heavily dependent on travel and tourism and commodity exporters particularly oil exporters. Page 8 13. While the recovery in private consumption and investment is forecast to be slower than previously envisioned, export growth is expected to accelerate gradually in line with the rebound in activity among major trading partners. 14. The East African Community (EAC) region is expected to recover from the effects of Corona Virus (COVID 19) in 2021. Before the pandemic, the GDP forecast for 2021 was at 5.4%, a slight increase compared to 2020’s 5.1%. With the crisis caused by the virus, the region is supposed to grow 3.7% in 2021. 2.3.2 National Economic Outlook 15. The growth outlook for 2020 has been revised down from the initial projection of 2.6% in the 2020 Budget Review and Outlook Paper (BROP) following receipt of more recent indicators and taking into account the contraction of 5.7% in the second quarter as per the World Economic Outlook figures released by the IMF. In this respect, economic growth for 2020 is now estimated at 0.6 % in 2020 and recover to 6.4% in 2021 due to in part, the lower base effect in 2020. Looking ahead, economic growth is projected to slow down to 5.5 % in 2022 (due to in part the uncertainty associated with the 2022 general elections) and recover to 6.1 % by 2024. This growth outlook will be supported by the stable macroeconomic environment, ongoing investments in strategic priorities of the Government under the “Big Four” Agenda, the ongoing public investments in infrastructure projects, the Economic Stimulus Program being implemented and the planned Post Covid-19 Economic Recovery Strategy (ERS), turn around in trade as economies recover from Covid-19 Pandemic and expected favorable weather that will support agricultural output. These factors will push up consumer demand and increase both public and private sector investment reinforcing the projected growth. The economic growth projections over the medium term are aligned to those of the Third Medium Term Plan (2018-2022) which is implementing Vision 2030. 2.2.1 County Economic Outlook 16. The County economy is not isolated from the effect of the global and national economic occurrences that do arise since her performance depends highly on the performance of the national economy. 17. Prior to Covid-19, the county economy was strong and resilient despite the challenging global environment. This was as a result of the various projects and programmmes that Page 9 Government has continued to implement geared towards, job creation, poverty reduction, food and nutrition security, promotion of conducive business environment, adequate, affordable and reliable energy supply, environmental conservation and water Supply, accessibility of universal health care, road expansion and effective service delivery. 18. The containment measures instituted by the national government to contain the spread of COVID-19 have negatively affected the performance of most sectors in the County. Going forward, the County will implement projects and program geared towards restoring and safeguarding County economic stability which will support growth and eventually reduce unemployment and poverty. Page 10 CHAPTER THREE 3.0 CONSOLIDATING ECONOMIC GAINS FOR SUSTAINABLE SOCIAL ECONOMIC GROWTH 3.1 Overview 19. The global economy has experienced a sharp decline in the last quarter of 2020 due to Covid-19 pandemic. Domestically, prior to the outbreak of Covid-19 pandemic, Kenya’s economy was strong and resilient despite the challenging global environment. However, the economy was significantly affected by the disease in the second quarter of 2020. During this period, the country instituted measures aimed at containing the spread of the virus, that included restriction of movement in and out of some counties, closure of learning institutions, closure of some businesses especially those dealing in Accommodation and Food services, near cessation of international travel among others. As a result, the performance of most sectors of the economy were to a large extent negatively affected by these measures with output considerably constrained and in some cases came to a complete halt. The poor performance in the quarter was characterized by substantial contractions in Accommodation and Food Services, Education, Taxes on products, and Transportation and Storage, which consequently occasioned the significant downturn. 20. In the face of the COVID -19 pandemic therefore, the overriding policy thrust of 2021 County Fiscal Strategy Paper is to consolidate and sustain inclusive economic growth by cushioning the vulnerable in the society ,facilitating private sector to expand its business , promoting productivity and building resilience necessary for employment creation and poverty reduction. 21. This County Fiscal Strategy Paper therefore builds on the commitments made by the Government in the last CFSP of implementing programs to enhance socio-economic growth through sustainable agriculture, infrastructure and social development as envisaged in the 2018-2022 CIDP and the “Big Four Agenda’’. Page 11 3.2 County Strategic Objectives 3.2.1 Agriculture and Co-operative Development sector 22. Agriculture remains the backbone of county’s economy and the focus is to ensure food security and nutrition to all residents while striving to create employment both directly and indirectly from Agricultural activities. In pursuit of this, the Government has been implementing various measures such as provision of free certified seeds, tractor services, pasture seeds, subsidized farm inputs , fish fingerlings , liners chicks , vaccination of livestock, implementing programmes to support smallholder farmers and promoting the use of appropriate farming techniques. These measures have borne fruits but are not without challenges. 23. Covid-19 containments measures and Locust invasion have lately affected the progress of agricultural seasons, livestock sales, market functioning and income generating activities posing a threat to the food security position. To cushion farmers from these adverse effects and further secure food supply chain over the medium term the County will ; i. Enhance implementation of the Quarter Acre program ii. Provide free certified seeds and subsidized fertilizer, free tractor services, training farmers on post-harvest management, establish demo-farms in order to enhance agricultural productivity among the smallholder/large scale farmers. iii. Provide high value crops seeds , fruit trees like mangoes, passion, pawpaw, oranges, grapes and macadamia; promotion of avocado production; pest and disease management, soil analysis and testing under the quarter acre program. iv. Prioritize pasture and fodder development; goats and sheep production; provision of extension services ,free chicks; livestock marketing and sale yard improvement; bee keeping; livestock disease and pest control; zoonotic control; meat inspection; develop strategic vaccine bank, rehabilitate cattle dips and slaughter houses, enforce veterinary public health standards ,enhance disease surveillance and compulsory mass vaccination and establish strategic reserve for vaccines. v. Promote aquaculture development, Fish inspection and quality control, vi. Carry out capacity building of the co-operative societies, vii. Provide linkages for agriculture products Page 12 24. In addition over the medium term the Co-operative sub –sector will implement the following programmes i. Promote agriculture-based co-operatives ii. Enhance Co-operatives Audits iii. Digitize and Modernize of cooperative societies operations iv. Mainstream Women and Youth in cooperatives v. Improve the performance of coffee growing Co-operatives through the Coffee Revitalization Program vi. Increase membership into the cooperative movement by registration of new societies vii. Support Dairy cooperatives to reduce losses(storage, value addition and marketing) viii. support and promote horticultural co-operatives ix. Promote value addition in co-ops in both in Dairy and Coffee x. Establish/enhance cooperative funding to Agri-based cooperative 3.2.2 Health Sector 25. Access to quality and affordable health care services is necessary in developing a holistic human capital base that will in turn increase productivity and enhance economic development. To date the County has made great strides in this sector through; Universal Health Care program (UHC), provision of 81 ambulances, construction of cancer center, construction of community Health facilities to reduce the distance to health center, construction of maternity wing and rehabilitation of existing health facilities. However, the outbreak and rapid spread of COVID -19 Pandemic has overstretched the health sector and this has necessitated the urgent need to upscale implementation of the UHC. In order to achieve this the government will ; i. Improve service delivery through adequate provision of health products, supplies and other utilities ii. Reduce the burden of communicable diseases through; sensitization, surveillance and Strengthening of community level 1 health and emergency services Page 13 iii. Improve health infrastructure through construction and upgrading of health facilities and adoption of clear maintenance programs iv. Improve access and demand for essential and specialized health services through purchase of laboratory, specialized medical and dental equipment and modernization of accident and emergency units v. Improve Reproductive, Maternal, Newborn Child and Adolescent health services (RMNCAH) including HIV prevention services vi. Strengthen primary healthcare services vii. Reduce the burden of violence and injuries through adoption of strategies that address each of the causes of injuries and violence viii. Minimize exposure to health risk factors by strengthening interventions that lead to positive health behaviors in the population. ix. Strengthen collaboration between health and other sectors that have impact on health 3.2.3 Energy, Infrastructure and ICT Sector 26. Infrastructure development contributes enormously towards improving our competitiveness and also interconnectivity of the County. For this reason, the Government has continued to scale-up connectivity through tarmacking and grading of roads, upgrading of roads to gravel standard, construction of drifts, culverts and gabions. In addition the county has invested in ensuring use of technology in some of our service delivery. Moving forward the County will build on the existing and ongoing infrastructural development, road, energy and ICT. i. Expansion of Roads and Transport Network 27. Over the medium term in order to ensure that Machakos residents enjoy the benefits of expanded road network, the government will work towards the completion of Kithini – Vota road, Phase II of Kincar-Airways road, upgrading of access road to bitumen standards, construction of Muthesya- Masinga Bridge, re-carpeting of Kithimani - Makutano and Machakos –Kyumvi roads . In addition the County will construct airport’s run way, grade and gravel feeder roads, carry out pothole patching on paved roads, construct drainage structures (culvert, drift and gabions), road marking and signage installation on paved roads besides road corridor surveying. Page 14 28. Further the County will embark on upgrading and maintaining of existing bus parks; Saccos management; operationalization of County Transport and Safety Committees; Road maintenance policy and County Public transport policy, construction of airport’s run way and construction of Government Offices. ii. Enhancing accessible and affordable energy 29. Access to stable, reliable and affordable energy supply is directly linked to all aspects of socio-economic growth. To this effect, in collaboration with the National Government the County will enhance rural electrification and distribute more transformers to boost availability of electricity and to sustain demand. In addition the County will put measures in place to promote use of biomass briquettes as alternatives to wood fuel. 30. Further to curb insecurity, the department of energy will install Mulika Mwizis across all our market centers in the County. iii. Promoting the use of Information , Communication and Technology 31. Information, Communication and Technology (ICT) forms the backbone of today’s digital economy and has a strong potential to accelerate economic growth. In light of this the government continues to invest in ICT infrastructure and improve efficiency and effectiveness in service delivery. To this end, the Government is in the process of installing Wide Area Network (WAN), county clocking and telephone IP system. 32. In addition to curb insecurity and enhance ease of doing business over the medium term, the County will do an overhaul and integration of CCTV along Mlolongo, Mavoko, Machakos town and Machakos Chumvi Roads. 3.2.4 Public Administration 33. This sector provides overall leadership and oversight in the management of the County affairs through legislation, public policy formulation, coordination and prudent resource management. Page 15 34. County Administration will embark on construction and equipping of sub-County and ward offices, purchase of administration uniforms, dumpsite construction, purchase of communication equipment, purchase of compacting trucks and provision of garbage collection bins 35. Finance will digitize collection and management of revenue, preparation of revenue, financial and budget policy documents. 36. County branding through installation of road signage & gantries; whereby County beautification is prioritized by the County image directorate. 37. Public Service and Quality Management prioritizes development of performance management system; development and implementation of quality assurance manual and carry out staff skills development. 38. Formation of project management committees, stakeholder engagement (public participation/feedback forums), site verification visits (M&E) and publication of County reports/statistics and project tracking system will be prioritized by the Project Delivery Directorate. 39. Development of planning documents such as annual development plans, Annual Progress Reports and sector policies and research and economic surveys 3.2.5 Education, Youth and Social Welfare 40. Investment in human capital is central to development and delivering substantial economic benefits. For this reason, the Government will continue investing in the youth, providing accessible quality early education and strengthening the social safety net in order to achieve her mandate. I. Investing in quality Early childhood development and vocational training 41. The Government takes cognizance of the critical role, quality early childhood development and vocation training play in equipping labour force with relevant skills necessary for economic growth. Over the years the government has implemented various Page 16 projects such us construction of ECDE centers, rehabilitation and equipping vocational training centers. To leverage on these gains the County will implement the following projects in the FY 2021/2022. i. Construction of more ECDE classes ii. Distribution of food to ECDE iii. Purchasing and distribution of learning materials iv. Construction and improvement of vocational training institutions v. Promotion of co-curriculum activities in learning institutions. II. Strengthening the social safety net and empowering the youth and the women 42. The County will continue to promote gender, youth and improve the livelihoods for the vulnerable groups and people living with disabilities. This will be achieved through; i. Awarding bursaries to the needy students ii. Construction of Gender Based Violence Rescue Centers iii. Provision of necessary devices to PLWDs iv. Provision of food to registered children homes 43. The most pressing challenge in today’s society is lack of jobs for the Youth. To address this the Government continues to dedicate resources to youth empowerment programmes and leveraging on partnerships with businesses and other private organizations to create opportunities for the youth through internships, apprenticeships, mentorship and entrepreneurship. To consolidate these gains the government will; i. Hold youth empowerment conference to mentor the youths on entrepreneurial skills and leadership ii. Construct innovation centers and establish talent academies iii. Construction of Sports facilities iv. Refurbish all community playing grounds v. Refurbish and maintain existing sports facilities vi. Provide sports equipment vii. Hold County Sports tournament viii. Carry out Sports Advocacy ,communication &mobilization ix. Hold youth capacity building at the Sub-County level. capacity Page 17 III. Promotion of cultures and Arts 44. Culture and Arts sub-sectors contribute immensely to economic development through job creation. Concerted efforts have been geared towards sport establishing curio outlets, cultural center and promotion of Akamba Culture. Moving forward, the Government will support performance of music, drama, and dance and exhibition of works of art and crafts. 3.2.6 Land, Environment and Natural Resources 45. Proper planning is a necessary precondition for achieving sustainable socio-economic growth. To realize this, the Government continues to implement revision of valuation roll, Digitalization of building approval process and Development of GIS online land records system. 46. Urban and Development sub-sector will undertake shelter upgrading, urban regeneration, renovation of staff houses, survey and titling of New City and development of urban institutions (Mavoko, Kangundo/Tala & Machakos Municipalities) 47. Moreover, in recognition of the critical role played by environmental conservation in achieving the sustainable development through poverty eradication, the Government has rolled out plans to create awareness on environment and climate change issues, Mainstreaming climate change activities in County projects and programs and provision of tree seedling to the citizens. 48. Over the medium term in order to manage environment and domesticate and implement Multilateral Environmental Agreements and programmes, restore all degraded landscapes, rivers & wetlands, implement the Climate Change Action Plan and coordinate implementation of both the National and County Environment Action Plans. In addition, to manage environment and natural resources the County will ; i. Develop environment and climate change laws ii. Establish Climate change units, committees, directorate, funds and information centers iii. Promote clean cooking stoves and green energy Page 18 iv. Implement transition plans(TIPs) v. Develop waste land fill vi. Purchase of tools/equipment for waste collection and environment vii. Carry out enforcement , monitoring and Surveillance viii. Carry out Environment Impact Assessment and Environment Audit ix. Rehabilitate denuded land and degraded rivers x. Regulate quarrying, mining, natural stones masers, natural soils/clays xi. Promote nature based enterprises(Apiculture, tree nurseries, landscaping activities 3.2.7 Water and Irrigation Sector 49. The Government remains committed in ensuring access to clean and safe water for all the County Residents. Machakos being water scarce county it is imperative that deliberate efforts are made towards the development and expansion of the sector in order to complement efforts towards primary health care and labour productivity. To date the County has drilled and equipped boreholes, constructed water dams and pans and supplied water to various public institutions. 50. Moving into the future, the Government will continue to invest in clean water supply through ; i. Reticulation of water from boreholes and dams to water points ii. Drilling boreholes and rehabilitation of the existing ones iii. Construction of dams and desilting of the existing ones iv. Treatment of water sources v. Construction of elevated water tanks vi. Construction of water dams and water pans vii. Maintenance of plants and equipment(Drilling rigs, dozers ,TPUs Support trucks, Utility vehicles) viii. Water quality control through establishment of County water laboratory ix. Construction of gabions and water weirs 51. Further, to increase agriculture production and reduce the overreliance on rain-fed agriculture the County will expand existing irrigation schemes. Page 19 3.2.8 Commercial and Tourism 52. The County Government remains dedicated to creating and sustaining a more conducive business environment through enhancing security to attract investors and promoting trade leading to job creation. Towards this end the Government has prioritized construction of market sheds; fencing and upgrading of livestock markets; business conferences, trade fairs and exhibitions; construction of jua kali sheds; construction and upgrading of boda-boda sheds; establishment of the Machakos Enterprise Development Fund; construction of modern kiosks; construction of modern bus-stop sheds; construction of industrial parks; operationalization and commissioning of jaw crushers; construction of cottage industry centers and construction, equipping and operationalization of business incubation and innovation centers. 53. Tourism and Sports sub-sectors play a key role in spurring economic development in the County. With this realization, concerted efforts have been geared towards sport development, promotion of the county as a preferred tourism destination, development of the film industry and nurturing of talents. 54. Great strides have been made to support these sub-sectors. The Government has almost completed the construction sub-county stadia, done rehabilitation of Machakos people’s park and Kenyatta stadium and constructed a studio for film production. 55. To leverage on these gains the County will undertake construction of theme park in Masinga; renovation of rest areas; construction of monuments; marketing Machakos tourism circuit; document tourist attraction sites in Machakos; hold beauty pageants; construct and equip studios; film and music production; develop fourteen falls and kyamwilu as tourist attraction sites , map, market and promote tourist attraction sites; develop and maintain recreational parks through beautification and landscaping and construct a team building center. Page 20 CHAPTER FOUR 4.0 FISCAL POLICY AND BUDGET FRAMEWORK 4.1 Overview 56. The fiscal framework for the FY 2021/22 Budget is based on the County priorities within the existing macroeconomic environment. The County Government is committed to implementing priority programmes outlined in the County Integrated Development Plan (CIDP) 2018-2022 while taking into account the availability of resources during the period. Further, the framework prioritizes prudent fiscal policy as a commitment towards sound financial management practices as entrenched in the Public Finance Management Act, 2012. 57. Sustainability, affordability and prioritization will guide programme/project identification and implementation. This will be achieved through spending that is directed towards the most critical needs of the county and well utilized. There will also be increased focus on improvement of both efficiency and productivity of recurrent expenditure. The focus for development expenditure will seek to ensure equitable development while making provisions for any marginalized groups in the county. There is need to refocus efforts on key streams, broadening the tax collection base in order to increase revenue collection through automation of more revenue streams while continually sealing any existing leakages. 58. National Government’s fiscal policy seeks to support structural reforms of the County Government’s economies that are consistent with long term growth objectives, employment creation and an equitable distribution of income. It aims at promoting investment and export expansion while enabling the Government to finance public services, redistribution and development in an affordable and sustainable budget framework. Page 21 4.2 Fiscal Responsibility Principles 59. As outlined in the Public Finance Management Act 2012, the County Treasury shall enforce the following fiscal responsibility principles.  the County Government’s recurrent expenditure shall not exceed the County Government’s total revenue;  over the medium term a minimum of thirty percent of the County Government’s budget shall be allocated to the development expenditure;  the County Government’s expenditure on wages and benefits for its public officers shall not exceed a percentage of the County Government’s total revenue as prescribed by the County Executive member for finance in regulations and approved by the County Assembly;  over the medium term, the Government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure;  the County debt shall be maintained at a sustainable level as approved by County assembly;  the fiscal risks shall be managed prudently; and  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. 4.3 Performance Review 60. In the FY 2020/2021, the County had a budget of Kshs.11 B which was revised to Kshs.13.9B. As at December 2020, The County received a total of Kshs.3.9 Billion and spent Kshs. 3.7 billion. This is illustrated in table 1 below. Table 1: Revenue performance FY 2020/2021 Printed Revised First Half Year First Half Year Absorption Description Estimates FY Estimates FY Receipts FY Expenditure FY Rate (%) 2020/2021 2020/2021 2020/2021 2020/2021 Equitable Share 8,039,100,000 8,961,934,976 3,225,768,000 3,096,566,085 39 Conditional Level Five Hospital 383,583,815 384,967,359 - - - Grants Compensation for User Fees - Foregone 24,129,039 24,129,039 - - Leasing of Medical - Equipment 132,021,277 132,021,277 - - Page 22 Printed Revised First Half Year First Half Year Absorption Description Estimates FY Estimates FY Receipts FY Expenditure FY Rate (%) 2020/2021 2020/2021 2020/2021 2020/2021 Rehabilitation of Youth - Polytechnics 62,749,894 62,749,894 - - Road Maintenance Levy Fund 239,604,947 282,013,396 59,901,237 59,901,237 25 Kenya Climate Smart 43 Agriculture Project (KCSAP) 279,999,640 279,999,640 120,546,485 120,546,485 Kenya Devolution Support - Project (KDSP) – level 1 45,000,000 90,103,027 - - Kenya Urban Support Project 1 , 7 4 6 , 6 6 2 , 8 2 7 86,441,371 - - (UDG) - Universal Healthcare in 50 Devolved System Program- 22,050,000 22,080,000 11,025,000 11,025,000 DANIDA Transforming Health Systems - for Universal Care Project- 45,165,352 90,645,491 - - World Bank Agriculture Sector - Development Support 13,746,442 13,924,442 - - Program-SIDA COVID-19 Emergency - Response - 97,581,003 - - Total Conditional Grants 1,248,050,406 3,226,877,395 277,914,093 191,472,722 15 Own Source Revenue 1,729,798,232 1,729,798,232 417,422,311 417,422,311 24 Total County Allocation 11,016,948,638 13,918,610,603 3,921,104,404 3,705,461,117 34 Source: Machakos County Treasury, 2021 4.4 Expenditures 61. The total Expenditure as at December, 2020 is Ksh. 3.7 Billion which translates to 34 % of the approved budget as illustrated in table 2 below. Of these, Ksh. 2.9 Billion was recurrent expenditure while Kshs. 0.78 Billion accounted for development expenditure. Table 2: Half Year Departmental Expenditure FY 2020/2021 Printed Revised First Half Year Budget County Entity Estimates FY Estimates FY Expenditure FY Utilization 2020/2021 2020/2021 2020/2021 (%) Recurrent 554,115,826 554,115,826 142,849,087.10 26 Office of the Development 3,681,732 3,305,675 1,950,186 53 Governor Total 557,797,558 557,421,501 144,799,273 26 Recurrent 41,682,382 41,923,882 13,023,008.50 31 County Public Development 5,976,219 5,365,801 - 0 Service Board Total 47,658,601 47,289,683 13,023,009 27 Recurrent 172,340,664 187,940,664 62,239,888 36 Roads, Transport Development 1,109,876,646 1,054,310,852 380,106,815 34 and Public Works. Total 1,282,217,310 1,242,251,516 442,346,703 34 Recurrent 3,551,240,610 3,896,786,964 1,678,735,973 47 Health and Development 546,372,604 446,140,498 29,000,570 5 Emergency Services Total 4,097,613,214 4,342,927,462 1,707,736,544 42 Page 23 Printed Revised First Half Year Budget County Entity Estimates FY Estimates FY Expenditure FY Utilization 2020/2021 2020/2021 2020/2021 (%) Agriculture, Food Recurrent 260,157,143 265,401,501 80,764,007 31 Security and Co- Development 311,093,813 332,950,883 124,850,007 40 operative Development. Total 571,250,956 598,352,384 205,614,014 36 Recurrent 911,145,156 911,145,156 393,551,302 43 County Assembly Development 365,000,000 375,777,380 32,379,253 9 Total 1,276,145,156 1,286,922,536 425,930,555 33 Water, Irrigation, Recurrent 49,779,699 103,631,038 30,772,863 62 Environment and Development 589,468,560 480,698,487 139,506,363 24 Natural Resources Total 639,248,259 584,329,525 170,279,226 27 Finance and Recurrent 422,545,883 468,847,343 84,309,870 20 Economic Development 41,618,632 26,367,654 6,976,955 17 Planning. Total 464,164,515 495,214,997 91,286,824 20 Public Service, Recurrent 395,750,188 890,672,457 175,126,501 44 Quality Development 20,355,778 32,537,674 - 0 Management and ICT Total 416,105,966 923,210,131 175,126,501 42 Recurrent 97,649,075 114,697,964 26,848,398 27 Tourism, Youth, Development 135,050,680 140,402,609 37,606,507 28 Sports and Culture. Total 232,699,755 255,100,573 64,454,904 28 Trade, Recurrent 83,192,185 260,146,671 28,684,375 34 Industrialization Development 147,000,000 95,305,998 - 0 and Innovation. Total 230,192,185 355,452,669 28,684,375 12 Education , Skills Recurrent 334,170,969 344,879,621 55,964,683 17 Training and Social Development 261,090,927 220,880,523 20,442,078 8 Welfare Total 595,261,896 565,760,144 76,406,761 13 Energy, Lands, Recurrent 70,770,524 199,637,582 18,490,048 26 Housing and Urban Development 98,149,569 1,877,602,835 8,212,008 8 Development. Total 168,920,093 2,077,240,417 26,702,056 16 County Recurrent 393,514,702 546,355,993 133,070,373 34 Administration and Development 44,158,472 40,781,071 - 0 Decentralized Units. Total 437,673,174 587,137,064 133,070,373 30 Total Recurrent 7,338,055,006 8,786,182,662 2,924,430,376 40 Total Development 3,678,893,632 5,132,427,940 781,030,741 21 Total County Expenditure 11,016,948,638 13,918,610,602 3,705,461,117 34 Source: Machakos County Treasury, 2021 4.5 Resource Envelope 62. The National Policy to Support Enhancement of County Governments’ Own-Source Revenue aims to address challenges in collection and administration of decentralized taxes, fees and charges 63. In view of the continued pressure that arise from wage bill and limited resources, MTEF budgeting will focus on adjusting non-priority expenditures to cater for the priority Page 24 sectors. The financing of county budget priorities revolve around two main financing sources namely; transfers from the National Government and county own source revenue. The shareable revenue transfers will amount to Kshs. 9.162 billion, Kshs. 716.596 million in grants while the county projects to collect Kshs. 1.764billion accounting for 78 percent, 6 percent and 16 percent respectively. 64. In the FY 2021/2022, the National Treasury has proposed that four existing conditional allocations funded from the National Government’s revenue share be converted to unconditional allocations and disbursed as part of equitable revenue share. These are: the Road Maintenance Levy Fund (RMLF); the grant to level-5 hospital; the compensation for user fees foregone and the rehabilitation of village polytechnics grants. Table 3: Resource Envelope FY 2021/2022 and Medium Term Description Item Budget Estimates Projected Projected FY 2021/2022 Estimates FY Estimates FY 2022/2023 2023/2024 Equitable Share 9,162,304,232* 9,162,304,232 9,162,304,232 Conditional Level Five Hospital1 - - - Grants Compensation for user fees foregone1 - - Leasing of Medical Equipment 153,297,872* 153,297,872 153,297,872 Rehabilitation of Youth Polytechnics1 - - Road Maintenance Levy Fund (KRB)1 - - Kenya Climate Smart Agriculture Project (KCSAP)- WORLD BANK Kenya Devolution Support Project (KDSP) – level 1- WORLD BANK Kenya Urban Support Project (UIG) - - - Kenya Urban Support Project (UDG) - Universal Healthcare in Devolved System Program- DANIDA Transforming Health Systems for Universal Care Project- WORLD BANK Agriculture Sector Development Support Program-SIDA Loans and Grants 563,297,872* 563,297,872 563,297,872 Total Conditional Grants 716,595,744* 716,595,744 716,595,744 Own Source Revenue 1,764,394,197 1,799,682,080 1,853,672,543 Page 25 Description Item Budget Estimates Projected Projected FY 2021/2022 Estimates FY Estimates FY 2022/2023 2023/2024 Total County Allocation 11,643,294,173 11,678,582,056 11,732,572,519 *Budget Policy Statement 4.6 Criteria for Resource Sharing i. Non – discretionary expenditure: In the recurrent expenditure category, non- discretionary expenditures take the first charge and include statutory obligations such as salaries, gratuity and pension. These expenditures are projected at 50 per cent of the total revenue. ii. Development expenditures are shared out on the basis of CIDP priorities as well as strategic interventions to boost revenue base and stimulate the economic growth as outlined in the National Government Policies and Governor’s Manifesto. The development expenditures are estimated at 30 percent. iii. On-going projects: emphasis is given to completion of on-going projects with high impact on poverty reduction, social injustices, employment and wealth creation. iv. Infrastructure projects: with the County government’s commitment to improve infrastructure, construction of roads, development of water and sanitation network, energy and construction of community hospitals among others will be given priority. 65. The criteria outlined above helped in developing ceilings for each County Entity as tabulated tables 4 and 5 below. Table 4: Summary of Budgetary Allocations Budget Budget Estimates % Budget Estimates Estimates FY FY 2021/2022 Allocation FY 2023/2024 2022/2023 Total Revenue 11,643,294,173 100 11,678,582,056 11,732,572,519 Equitable Share 9,162,304,232 79 9,162,304,232 9,162,304,232 Conditional Grants 716,595,744 6 716,595,744 716,595,744 Own Source Revenue 1,764,394,197 15 1,799,682,080 1,853,672,543 Total Expenditure 11,643,294,172 100 11,678,582,056 11,732,572,519 Recurrent Vote 8,150,305,920 70 8,175,007,439 8,212,800,763 Compensation to 6,167,725,100 53 6,414,434,104 Employees 6,671,011,468 Use of Goods and Services 1,982,580,820 17 1,760,573,335 1,541,789,295 Development Vote 3,492,988,252 30 3,503,574,617 3,519,771,756 Source: Machakos County Treasury, 2021 Page 26 Table 5: Budgetary Allocation per Departmental FY 2021/2022 and the Medium Term Printed Estimates FY Revised Estimates FY Budget Estimates FY Projected Estimates Projected Estimates County Entity 2020/2021 2020/2021 2021/2022 FY 2022/2023 FY 2023/2024 Recurrent 554,115,826 554,115,826 399,538,460 419,515,383 440,491,152 Office of the Development 3,681,732 3,305,675 3,080,367 3,234,385 3,396,105 Governor Total 557,797,558 557,421,501 402,618,827 422,749,768 443,887,257 Recurrent 41,682,382 41,923,882 10,917,101 11,462,956 12,036,104 County Public Development 5,976,219 5,365,801 0 0 0 Service Board Total 47,658,601 47,289,683 10,917,101 11,462,956 12,036,104 Recurrent 172,340,664 187,940,664 51,536,964 54,113,812 56,819,503 Roads, Transport and Development 1,109,876,646 1,054,310,852 1,717,391,128 1,803,260,684 1,893,423,719 Public Works. Total 1,282,217,310 1,242,251,516 1,768,928,092 1,857,374,497 1,950,243,221 Recurrent 3,551,240,610 3,896,786,964 513,039,280 538,691,244 565,625,806 Health and Development 546,372,604 446,140,498 475,000,002 498,750,002 523,687,502 Emergency Services Total 4,097,613,214 4,342,927,462 988,039,282 1,037,441,246 1,089,313,308 Agriculture, Food Recurrent 260,157,143 265,401,501 190,325,036 199,841,288 209,833,352 Security and Co- Development 311,093,813 332,950,883 450,224,267 472,735,480 496,372,254 operative Development. Total 571,250,956 598,352,384 640,549,303 672,576,768 706,205,607 Recurrent 911,145,156 911,145,156 841,145,156 883,202,414 927,362,534 County Assembly Development 365,000,000 375,777,380 50,100,940 52,605,987 55,236,286 Total 1,276,145,156 1,286,922,536 891,246,096 935,808,401 982,598,821 Water, Irrigation, Recurrent 49,779,699 103,631,038 28,934,818 30,381,559 31,900,637 Environment and Development 589,468,560 480,698,487 500,141,311 525,148,377 551,405,795 Natural Resources Total 639,248,259 584,329,525 529,076,129 555,529,935 583,306,432 Recurrent 422,545,883 468,847,343 5,777,098,063 6,065,952,966 6,369,250,614 Finance and Development 41,618,632 26,367,654 27,560,987 28,939,036 30,385,988 Economic Planning. Total 464,164,515 495,214,997 5,804,659,050 6,094,892,003 6,399,636,603 Public Service, Recurrent 395,750,188 890,672,457 155,431,845 163,203,437 171,363,609 Quality Management Development 20,355,778 32,537,674 9,329,343 9,795,810 10,285,601 and ICT Total 416,105,966 923,210,131 164,761,188 172,999,247 181,649,210 Recurrent 97,649,075 114,697,964 49,156,785 51,614,624 54,195,355 Tourism, Youth, Development 135,050,680 140,402,609 50,091,066 52,595,619 55,225,400 Sports and Culture. Total 232,699,755 255,100,573 99,247,851 104,210,244 109,420,756 Trade, Recurrent 83,192,185 260,146,671 24,952,021 26,199,622 27,509,603 Industrialization and Development 147,000,000 95,305,998 80,021,732 84,022,819 88,223,960 Page 27 Printed Estimates FY Revised Estimates FY Budget Estimates FY Projected Estimates Projected Estimates County Entity 2020/2021 2020/2021 2021/2022 FY 2022/2023 FY 2023/2024 Innovation. Total 230,192,185 355,452,669 104,973,753 110,222,441 115,733,563 Education , Skills Recurrent 334,170,969 344,879,621 38,704,996 40,640,246 42,672,258 Training and Social Development 261,090,927 220,880,523 60,102,833 63,107,975 66,263,373 Welfare Total 595,261,896 565,760,144 98,807,829 103,748,220 108,935,631 Energy, Lands, Recurrent 70,770,524 199,637,582 32,181,457 33,790,530 35,480,056 Housing and Urban Development 98,149,569 1,877,602,835 50,003,715 52,503,901 55,129,096 Development. Total 168,920,093 2,077,240,417 82,185,172 86,294,431 90,609,152 County Recurrent 393,514,702 546,355,993 37,343,939 39,211,136 41,171,693 Administration and Development 44,158,472 40,781,071 19,940,561 20,937,589 21,984,469 Decentralized Units. Total 437,673,174 587,137,064 57,284,500 60,148,725 63,156,161 Total Recurrent 7,338,055,006 8,786,182,662 8,150,305,921 8,557,821,217 8,985,712,278 Total Development 3,678,893,632 5,132,427,940 3,492,988,252 3,667,637,665 3,851,019,548 Total County Allocation 11,016,948,638 13,918,610,602 11,643,294,173 12,225,458,882 12,836,731,826 Source: Machakos County Treasury, 2021 66. As per Table 5 above the budget allocation for compensation of employees is consolidated under the department of Finance and Economic planning to enhance effectiveness and efficiency in payments. Compensation of employees per departments is as per Annex II. Page 28 Annex I: Expenditure by Economic Classification i. Recurrent Revised First Half Year Printed Estimates Budget Estimates Projected Estimates Projected Estimates County Entity Item Estimates FY Expenditure FY FY 2020/21 FY 2021/2022 FY 2022/2023 FY 2023/2024 2020/21 2020/2021 Compensatio n to Employees 160,901,960 159,201,960 39,626,395 - - - Use of goods Office of the and services 393,213,866 394,913,866 103,222,692 399,538,460 419,515,383 440,491,152 Governor Other Current Transfers - - - - - - Total 554,115,826 554,115,826 142,849,087 399,538,460 419,515,383 440,491,152 Compensatio n to Employees 219,163,418 599,450,892 80,477,408 - - - Public Use of goods Service, and services 129,336,770 201,118,538 94,649,093 155,431,846 126,366,090.50 97,933,720 Quality Other Management Current and ICT Transfers 47,250,000 90,103,027 - - - - Total 395,750,188 890,672,457 175,126,501 155,431,846 126,366,090.50 97,933,720 Compensatio n to Employees 49,587,352 49,587,352 17,635,210 - - - Trade, Use of goods Industrializati and services 33,604,833 210,559,319 11,049,165 24,952,021 20,285,993 15,721,645 on and Other Innovation Current Transfers - - - - - - Total 83,192,185 260,146,671 28,684,375 24,952,021 20,285,993 15,721,645 Compensatio n to Employees 370,302,058 370,302,058 54,213,323 5,696,418,030 5,924,274,751 6,161,245,741 Finance and Use of goods Economic and services 52,243,825 98,545,285 30,096,547 80,680,033 65,592,867 50,834,472 Planning Other Current Transfers - - - - - - Page 29 Revised First Half Year Printed Estimates Budget Estimates Projected Estimates Projected Estimates County Entity Item Estimates FY Expenditure FY FY 2020/21 FY 2021/2022 FY 2022/2023 FY 2023/2024 2020/21 2020/2021 Total 422,545,883 468,847,343 84,309,870 5,777,098,063 6,065,952966 6,369,250,614 Compensatio n to Employees 356,342,845 457,842,845 121,346,524 - - - County Use of goods Administratio and services 37,171,857 88,513,148 11,723,849 37,343,936 30,360,620 23,529,481 n and Other Decentralized Current Units Transfers - - - - - - Total 393,514,702 546,355,993 133,070,373 37,343,936 30,360,620 23,529,481 Compensatio n to Agriculture, Employees 185,782,451 185,782,451 75,630,883 - - - Food Security Use of goods and Co- and services 12,378,501 17,622,859 5,133,123 33,642,931 27,351,703 21,197,570 operative Other Development Current Transfers 61,996,191 61,996,191 - 156,682,105 156,682,105 156,682,105 Total 260,157,143 265,401,501 80,764,007 190,325,036 184,033,808 177,879,675 Compensatio n to Employees 3,095,657,402 3,243,473,184 1,462,560,350 - - - Use of goods Health and and services 359,687,254 294,096,379 216,175,623 513,039,280 417,250,525 323,580,167 Emergency Other Services Current Transfers 95,895,954 359,217,401 - - - Total 3,551,240,610 3,896,786,964 1,678,735,973 513,039,280 417,250,525 323,580,167 Compensatio n to Employees 140,136,106 140,136,106 47,333,782 - - - Use of goods Roads, and services 32,204,558 47,804,558 14,906,106 51,536,964 41,899,552 32,472,153 Transport and Other Public Works Current Transfers - - - - - - Total 172,340,664 187,940,664 62,239,888 51,536,964 41,899,552 32,472,153 Page 30 Revised First Half Year Printed Estimates Budget Estimates Projected Estimates Projected Estimates County Entity Item Estimates FY Expenditure FY FY 2020/21 FY 2021/2022 FY 2022/2023 FY 2023/2024 2020/21 2020/2021 Compensatio n to Employees 280,836,038 280,836,038 54,425,407 - - - Education, Use of goods Skills and services 3,073,483 64,043,583 1,539,276 38,704,997 31,467,162 24,387,051 Training and Other Social Current Welfare Transfers 50,261,448 - - - - - Total 334,170,969 344,879,621 55,964,683 38,704,997 31,467,162 24,387,051 Compensatio n to Employees 50,805,261 53,853,072 12,883,313 - - - Energy, Use of goods Lands, and services 19,965,263 145,784,510 5,606,735 32,181,457 26,163,525 20,276,732 Housing and Other Urban Current Development Transfers - - - - - - Total 70,770,524 199,637,582 18,490,048 32,181,457 26,163,525 20,276,732 Compensatio n to Employees 86,403,556 86,403,556 22,506,030 - - - Use of goods Tourism, and services 8,118,646 28,294,408 4,342,368 49,156,785 39,964,466 30,972,461 Youth, Sports Other and Culture Current Transfers 3,126,873 - - - - - Total 97,649,075 114,697,964 26,848,398 49,156,785 39,964,466 30,972,461 Compensatio n to Employees 31,247,920 72,247,920 27,293,808 - - - Water, Use of goods Irrigation, and services 18,531,779 31,383,118 3,479,055 28,934,819 23,524,008 18,231,106 Environment Other and Natural Current Resources Transfers - - - - - - Total 49,779,699 103,631,038 30,772,863 28,934,819 23,524,008 18,231,106 Page 31 Revised First Half Year Printed Estimates Budget Estimates Projected Estimates Projected Estimates County Entity Item Estimates FY Expenditure FY FY 2020/21 FY 2021/2022 FY 2022/2023 FY 2023/2024 2020/21 2020/2021 Compensatio n to Employees 27,736,634 27,736,634 12,156,209 - - - Use of goods County Public and services 13,945,748 14,187,248 866,800 10,917,101 9,763,257 8,563,259 Service Board Other Current Transfers - - - - - - Total 41,682,382 41,923,882 13,023,009 10,917,101 9,763,257 8,563,259 Compensatio n to Employees 446,839,875 285,209,720 208,132,281 471,307,070 490,159,353 509,765,727 Use of goods County and services 414,305,281 575,935,436 165,419,021 369,838,086 350,985,803 331,379,429 Assembly Other Current Transfers 50,000,000 50,000,000 20,000,000 - - - Total 911,145,156 911,145,156 393,551,302 841,145,156 841,145,156 841,145,156 Total Compensation to Employees 5,501,742,876 6,012,063,787 2,236,220,923 6,167,725,100 6,414,434,104 6,671,011,468 Total Net Use of goods and services 1,527,781,664 2,212,802,256 668,209,453 1,825,898,715 1,777,237,914 1,566,541,585 Total Net Other Current Transfers 308,530,466 561,316,619 20,000,000 156,682,105 156,682,105 156,682,105 TOTAL NET EXPENDITURE 7,338,055,006 8,786,182,662 2,924,430,376 8,150,305,920 8,348,354,123 8,394,235,158 Source: Machakos County Treasury, 2021 ii. Development First Half Printed Revised Year Budget Projected Projected County Entity Details Estimates FY Estimates FY Expenditure Estimates FY Estimates FY Estimates FY 2020/21 2020/2021 FY 2021/2022 2022/2023 2023/2024 2020/2021 Acquisition of Non- Office of the Financial Assets 3,681,732 3,305,675 1,950,186 3,080,367 3,234,385 3,396,105 Governor Other Capital Grants and Transfers - - - - - - Page 32 First Half Printed Revised Year Budget Projected Projected County Entity Details Estimates FY Estimates FY Expenditure Estimates FY Estimates FY Estimates FY 2020/21 2020/2021 FY 2021/2022 2022/2023 2023/2024 2020/2021 Total Development 3,681,732 3,305,675 1,950,186 3,080,367 3,234,385 3,396,105 Acquisition of Non- Public Service, Financial Assets 20,355,778 32,537,674 9,329,343 9,795,810 10,285,601 Quality Other Capital Grants Management and and Transfers - - - - - - ICT Total Development 20,355,778 32,537,674 - 9,329,343 9,795,810 10,285,601 Acquisition of Non- Trade, Financial Assets 147,000,000 95,305,998 6,976,955 80,021,732 84,022,819 88,223,960 Industrialization Other Capital Grants and Innovation and Transfers - - - - - - Total Development 147,000,000 95,305,998 6,976,955 80,021,732 84,022,819 88,223,960 Acquisition of Non- Financial Assets 41,618,632 26,367,654 27,560,987 28,939,036 30,385,988 Finance and Other Capital Grants Economic Planning and Transfers - - - - - - Total Development 41,618,632 26,367,654 - 27,560,987 28,939,036 30,385,988 Acquisition of Non- County Financial Assets 44,158,472 40,781,071 19,940,561 20,937,589 21,984,469 Administration and Other Capital Grants Decentralized Units and Transfers - - - - - - Total Development 44,158,472 40,781,071 - 19,940,561 20,937,589 21,984,469 Acquisition of Non- Agriculture, Food Financial Assets 45,443,922 71,840,464 4,303,522 49,947,829 49,947,829 49,947,829 Security and Co- Other Capital Grants operative and Transfers 265,649,891 261,110,419 120,546,485 400,276,438 400,276,438 400,276,438 Development Total Development 311,093,813 332,950,883 124,850,007 450,224,267 450,224,267 450,224,267 Acquisition of Non- Financial Assets 141,469,391 252,404,015 17,975,570 299,652,130 299,652,130 299,652,130 Health and Other Capital Grants Emergency Services and Transfers 404,903,213 193,736,483 11,025,000 175,347,872 175,347,872 175,347,872 Total Development 546,372,604 446,140,498 29,000,570 475,000,002 475,000,002 475,000,002 Acquisition of Non- Financial Assets 868,807,557 772,297,456 320,205,578 1,717,391,128 1,803,260,684 1,893,423,719 Roads, Transport Other Capital Grants and Public Works and Transfers 241,069,089 282,013,396 59,901,237 - - Total Development 1,109,876,646 1,054,310,852 380,106,815 1,717,391,128 1,803,260,684 1,893,423,719 Page 33 First Half Printed Revised Year Budget Projected Projected County Entity Details Estimates FY Estimates FY Expenditure Estimates FY Estimates FY Estimates FY 2020/21 2020/2021 FY 2021/2022 2022/2023 2023/2024 2020/2021 Acquisition of Non- Education, Skills Financial Assets 198,341,033 158,130,629 20,442,078 60,102,833 63,107,975 66,263,373 Training and Social Other Capital Grants Welfare and Transfers 62,749,894 62,749,894 - - - - Total Development 261,090,927 220,880,523 20,442,078 60,102,833 63,107,975 66,263,373 Acquisition of Non- Energy, Lands, Financial Assets 74,149,569 130,940,009 8,212,008 50,003,715 52,503,901 55,129,096 Housing and Urban Other Capital Grants Development and Transfers 24,000,000 1,746,662,826 - - - - Total Development 98,149,569 1,877,602,835 8,212,008 50,003,715 52,503,901 55,129,096 Acquisition of Non- Financial Assets 132,575,680 140,402,609 37,606,507 50,091,066 52,595,619 55,225,400 Tourism, Youth, Other Capital Grants Sports and Culture and Transfers 2,475,000 - - - - - Total Development 135,050,680 140,402,609 37,606,507 50,091,066 52,595,619 55,225,400 Acquisition of Non- Water, Irrigation, Financial Assets 555,768,560 480,698,487 139,506,363 500,141,311 525,148,377 551,405,795 Environment and Other Capital Grants Natural Resources and Transfers 33,700,000 - - - - - Total Development 589,468,560 480,698,487 139,506,363 500,141,311 525,148,377 551,405,795 Acquisition of Non- Financial Assets 5,976,219 5,365,801 - - - - County Public Other Capital Grants Service Board and Transfers - - - - - - Total Development 5,976,219 5,365,801 - 15,811,681 15,862,279 15,940,004 Acquisition of Non- Financial Assets 365,000,000 375,777,380 32,379,253 50,100,940 52,605,987 55,236,286 County Assembly Other Capital Grants and Transfers - - - - - - Total Development 365,000,000 375,777,380 32,379,253 50,100,940 52,605,987 55,236,286 Total Acquisition of Non-Financial Assets 2,644,346,545 2,586,154,923 589,558,020 2,917,363,942 2,927,950,307 2,944,147,446 Total Other Capital Grants and Transfers 1,034,547,087 2,546,273,017 191,472,722 575,624,310 575,624,310 575,624,310 TOTAL NET EXPENDITURE 3,678,893,632 5,132,427,940 781,030,742 3,492,988,252 3,503,574,617 3,519,771,756 Source: Machakos County Treasury, 2021 Page 34 Annex II : Compensation of employees per Department First Half Year Projected Printed Estimates Revised Estimates FY Budget Estimates Projected Estimates County Entity Expenditure FY Estimates FY FY 2020/21 2020/21 FY 2021/2022 FY 2022/2023 2020/2021 2023/2024 Office of the Governor 160,901,960 159,201,960 39,626,395 165,570,038 172,192,840 179,080,554 Public Service, Quality Management and ICT 219,163,418 599,450,892 80,477,408 363,918,728 378,475,477 393,614,496 Trade, Industrialization and Innovation 49,587,352 49,587,352 17,635,210 51,570,846 53,633,680 55,779,027 Finance and Economic Planning 370,302,058 370,302,058 54,213,323 385,114,140 400,518,706 416,539,454 County Administration and Decentralized Units 356,342,845 457,842,845 121,346,524 476,156,559 495,202,821 515,010,934 Agriculture, Food Security and Co- 193,213,749 200,942,299 208,979,991 185,782,451 185,782,451 75,630,883 operative Development Health and Emergency Services 3,095,657,402 3,243,473,184 1,462,560,350 3,373,212,111 3,508,140,596 3,648,466,220 Roads, Transport and Public Works 140,136,106 140,136,106 47,333,782 145,741,550 151,571,212 157,634,060 Education, Skills Training and Social 292,069,480 303,752,259 315,902,349 280,836,038 280,836,038 54,425,407 Welfare Energy, Lands, Housing and Urban Development 50,805,261 53,853,072 12,883,313 56,007,195 58,247,483 60,577,382 Tourism, Youth, Sports and Culture 86,403,556 86,403,556 22,506,030 89,859,698 93,454,086 97,192,250 Water, Irrigation, Environment and 75,137,837 78,143,350 81,269,084 31,247,920 72,247,920 27,293,808 Natural Resources County Public Service Board 27,736,634 27,736,634 12,156,209 28,846,099 29,999,943 31,199,941 County Assembly 446,839,875 285,209,720 208,132,281 471,307,070 490,159,353 509,765,727 Total Compensation to 5,501,742,876 6,012,063,787 2,236,220,923 6,167,725,100 6,414,434,104 6,671,011,468 Employees Page 35 Annex III: County Own Source Revenue Projections Revised Printed Estimates Actual FY FY 2020/2021 Projections FY Projections FY Projections FY Revenue Stream Estimates FY 2019/2020 2021/2022 2022/2023 2023/2024 2019/20 Land Rates &Debt Clearance Cert 180,311,755 264,046,575 312,765,281 319,020,587 325,400,999 335,163,029 Single Business Permit 141,166,526 187,631,790 206,327,254 210,453,799 214,662,875 221,102,762 Quarry 355,253,351 367,577,984 480,447,285 490,056,231 499,857,356 514,853,076 Sand Gravel 51,867,267 45,761,096 54,760,839 55,856,056 56,973,177 58,682,372 Market Fees 16,126,396 9,906,502 14,559,290 14,850,475 15,147,485 15,601,909 Plot/Stall Rent 15,463,023 8,924,665 8,356,414 8,523,542 8,694,013 8,954,833 Bus Park 76,692,415 78,574,103 141,860,810 144,698,026 147,591,986 152,019,746 House Rent 1,652,580 778,608 2,000,000 2,040,000 2,080,800 2,143,224 Refuse/Conservancy Fee 15,663,460 25,716,168 45,000,000 45,900,000 46,818,000 48,222,540 Sign Board & Advertisement Fee 36,075,488 35,516,487 54,911,788 56,010,024 57,130,224 58,844,131 Fire Fighting &Ambulance Management Unit 33,468,586 29,136,821 36,936,374 37,675,101 38,428,603 39,581,461 Slaughter House Fees/Livestock 16,882,464 11,358,703 14,307,215 14,593,359 14,885,226 15,331,783 Enforcement Management Unit 20,843,022 9,082,973 16,179,200 16,502,784 16,832,840 17,337,825 Building Plan Approval 110,181,794 149,448,896 156,000,000 159,120,000 162,302,400 167,171,472 Cess 11,309,110 15,515,559 20,179,955 20,583,554 20,995,225 21,625,081 Maruba/Peoples Park - - 1,021,860 1,042,297 1,063,143 1,095,037 Social Services &Sports Management Unit 1,603,600 98,460 135,300 138,006 140,766 144,989 Water Sales 233,316 554,651 299,982 305,981 312,101 321,464 Miscellaneous - 247,805 - - - - House Loan Repayment 477,610 1,000 - - - - Salary Refunds/Salary Advance 12,000 20,270 657,255 670,400 683,808 704,322 Motor vehicle/Cycle Registration 1,237,577 4,291,860 6,512,825 6,643,082 6,775,943 6,979,221 Health Revenue Account 34,592,394 69,488,591 80,637,350 82,250,096 83,895,098 86,411,951 Liqour 23,838,282 35,054,335 44,705,166 45,599,269 46,511,255 47,906,592 Tourism 434,295 960,485 156,510 159,640 162,833 167,718 Weights And Measures 1,210,576 - - - - - Off street Parking Unit 10,435,760 17,905,291 30,015,719 30,616,033 31,228,354 32,165,205 Interest/Penalties On Stalls Rent 2,693,655 7,912,237 188,563 192,334 196,181 202,066 Agri Farm 953,300 64,100 442,375 451,222 460,247 474,054 Noise Pollution 97,300 595,795 433,625 442,298 451,143 464,678 TOTAL 1,160,776,902 1,376,171,810 1,729,798,232 1,764,394,197 1,799,682,080 1,853,672,543 Source: Machakos County Treasury, 2021 Page 36 Annex IV: Machakos County Sector Composition Sector County Entity Agriculture and Co-  Agriculture and Food Security operative Development  Co-operative Development Energy, Infrastructure  County Electrification and ICT  Roads, Transport and Public Works  Information, Communication and Technology  Housing and Urban Development Commercial, Tourism  Trade, Industrialization and Innovation and Labour Affairs  Tourism Health  Medical Services  Public Health and Community Outreach Public Administration  Office of the Governor  Public Service and Quality Management  Public Service Board  County Assembly  County Administration and Decentralized Units  County Treasury  Finance and Revenue Collection  Economic Planning and External Resources Mobilization  Legal Services  Project Delivery, Monitoring and Evaluation Education, Youth and  Education and Skills Training Social Welfare  Youth, Sports and Culture  Social Welfare and Civic Empowerment Water and Irrigation  Water and Irrigation Land, Environment and  Lands and Physical Planning Natural Resources  Environment and Natural Resources Page 37