REPUBLIC OF KENYA COUNTY GOVERNMENT OF NYERI DEPARTMENT OF FINANCE AND ECONOMIC PLANNING COUNTY FISCAL STRATEGY PAPER 2015 ENHANCING ECONOMIC TRANSFORMATION FOR A SHARED PROSPERITY IN NYERI COUNTY FEBRUARY, 2015 Foreword In the 2014 Nyeri County Fiscal Strategy Paper it had set the policy priority of the county government over a three year period. It was prepared in accordance with the Constitution of Kenya, 2010 and in line with all the Acts governing devolution. These includes: County Government Act, 2012; PFM Act, 2012 and Transition to Devolved Government Act, 2012. It sets out the priorities of the county in the medium term as outlined in the County Integrated Development Plan (CIDP), 2013 – 2017. The CFSP, 2015, mainly emphasizes the key areas of interventions that the County Government will be rolling out so as to accelerate economic growth and create jobs over the next three years. The emphasis will be on shifting of resources from payment of wages and wasteful recurrent expenses to sectors that have a direct impact on growth and employment creation. Programmes that provide conducive working environment to all stakeholders involved in development will be accentuated to accelerate economic growth. Economic growth prospects remain high as the county continues to invest in infrastructural development as way of spurring economic growth. The county’s economy is mainly agricultural based and continued investment in the sector will increase levels of income and employment opportunities. Despite numerous efforts, the county is still experiencing development challenges which may hamper development growth as we move forward. Such challenges include; inadequate and high cost of energy, inappropriate agricultural practices, undeveloped and poorly maintained road network among others. The county will ensure that the objectives of devolution are achieved through better service delivery and rapid local economic development as well as jobs creation in line with the Kenya Vision 2030. However, this can only occur if the fiscal discipline in the use of the available and scarce resources is entrenched and national macroeconomic environment remains stable. ii The programmes that will be funded in the Budget of the FY 2015/16 and outlined in this County Fiscal Strategy Paper ride on the priorities summarized in the County Integrated Development Plan (CIDP), 2013-2017. In this regard, the County Fiscal Strategy Paper outlines economic policies and sector development directions as well as department-based expenditure programmes that the county government intends to implement over the next three years in order to achieve its development agenda. In the FY 2015/16 budget emphasis will be on shifting of resources in favour of growth and job creation, and to support stronger Public- Private Partnership in pursuit of new economic opportunities and growth. MARTIN WAMWEA, COUNTY EXECUTIVE SECRETARY, FINANCE AND ECONOMIC PLANNING. iii Acknowledgement This is the second County Fiscal Strategy Paper to be tabled in the County Assembly as stipulated in the Public Finance Management Act, 2012. It highlights the broad strategic economic issues and fiscal framework, together with a summary of county spending plans, as a basis of 2015/16 budget and the medium-term proposals as enunciated in the County Integrated Development Plan,(CIDP), 2013 - 2017. The document is expected to improve the understanding on how public finances are spent and shape the debate on economic and development matters in the County. The preparation of the CFSP, 2015 is a collaborative effort of the county departments with overall co-ordination by the Finance and Economic Planning department. The information in this report was obtained from the county departments and other units and we are grateful for their inputs. A team from the County Treasury and Economic Planning Unit spent valuable time to put together the strategy paper. The officers included, Richard Kimani, Lucy Kirigo, Rehema Salim, Gibson Mwangi and Chris Gathogo Since it would not be possible to list everybody individually in this page, I would like to take this opportunity to thank the entire staff of the County Government of Nyeri for their dedication, sacrifice and commitment to public service that enabled the timely production of the CFSP, 2015 E. MUKIRA GICHIGO FRANCIS M. KIRIRA CHIEF OFFICER, CHIEF OFFICER, FINANCE/COUNTY TREASURY ECONOMIC PLANNING iv TABLE OF CONTENTS I ECONOMIC TRANSFORMATION FOR A SHARED PROSPERITY ........ 1 IN NYERI COUNTY ............................................................................................ 1 Overview.............. .................................................................................................. 1 Programmes for achieving economic transformation for a shared prosperity ....... 2 Prioritizing Development ....................................................................................... 3 Economic transformation policies for a shared prosperity and inclusive growth .. 4 Outline of the 2014 County Fiscal Strategy Paper ............................................. 9 II RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK ................... 10 Overview of Recent Economic Performance ....................................................... 10 Fiscal performance and emerging challenges ...................................................... 12 2013/14 Budget .................................................................................................... 12 III FISCAL AND BUDGET FRAMEWORK .................................................... 15 Overview....... ....................................................................................................... 15 Observing fiscal responsibility principles ............................................................ 15 Fiscal structural reforms ...................................................................................... 16 2014/15 Budget Framework ................................................................................ 17 Revenue Projections ............................................................................................. 17 Overall Deficit Financing .................................................................................... 18 Summary........ ...................................................................................................... 18 IV DEPARTMENTAL ALLOCATION OF RESOURCES .............................. 19 Introduction ...................................................................................................... 19 Departmental Budgeting .................................................................................. 19 Resources available .............................................................................................. 20 Allocation of Revenue among Departments ........................................................ 20 Fiscal Discipline ................................................................................................... 21 v Equity in Allocation of Resources ....................................................................... 21 Capacity Building of County Departments .......................................................... 22 V 2014/15 EXPENDITURE FRAMEWORK ................................................... 23 Resource Envelope ............................................................................................... 23 Spending Priorities ............................................................................................... 23 2013/14 Expenditure Estimates ........................................................................... 24 Medium-Term Expenditure Estimates ................................................................. 24 Baseline ceilings .................................................................................................. 25 Finalization of spending plans ............................................................................. 26 Details of Departmental Priorities ....................................................................... 27 VI CONCLUSION .............................................................................................. 33 Table 1: Agricultural production trends and value ............................................... 10 Table 2: Livestock Production ............................................................................. 12 Table 3: Cumulative Budget Out-turn, July – December 2013 ............................ 13 Table 4: Cumulative Budget Out-turn, July – December 2013 ............................ 21 Table 5: Projected budget allocations 2014-2017 ................................................ 25 Annex 1: Revenue collected in the first 6 months of 2013/2014..........................35 vi Legal Basis for the Publication of the County Fiscal Strategy Paper The County Fiscal Strategy Paper is published in accordance with Section 117 of the Public Finance Management Act, 2012. The law states that: 1) The County Treasury shall prepare and submit to County Executive Committee the County Fiscal Strategy Paper for approval and the County Treasury shall submit the approved Fiscal Strategy Paper to the county assembly, by 28th February of each year. 2) The County Treasury shall align its County Fiscal Strategy Paper with the national objectives in the Budget Policy Statement. 3) In preparing the County Fiscal Strategy Paper, the County Treasury shall specify the broad strategic priorities and policy goals that will guide the county government in preparing their budget both for the coming financial year and over the medium term. 4) The county treasury shall include in its County Fiscal Strategy Paper the financial outlook with respect to county government revenues, expenditures and borrowing for the coming financial year and over the medium term. 5) In preparing the County Fiscal Strategy Paper, the County Treasury shall seek and take into account the views of - (a) the commission of revenue allocation; (b) the public; (c) the interested persons or groups; (d) Any other forum that is established by legislation. 6) Not later than fourteen days after submitting the County Fiscal Strategy Paper to the county assembly, the county assembly shall consider and may adopt it with or without amendments. 7) The County Treasury shall consider any recommendations made by the county assembly when finalizing the budget proposal for the financial year concerned. 8) The County Treasury shall publish and publicize the County Fiscal Strategy Paper within seven days after it has been submitted to the county assembly. vii Fiscal Responsibility Principles for the National and County Governments In line with the Constitution, the Public Finance Management (PFM) Act, 2012, sets out the fiscal responsibility principles to ensure prudent and transparent management of public resources. The PFM act, 2012, (Section 15) states that: 1) Over the medium term, a minimum of 30 percent of the national and county budgets shall be allocated to development expenditure 2) The national government’s expenditure on wages and benefits for public officers shall not exceed a percentage of the national government revenue as prescribed by the regulations. 3) 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. 4) Over the medium term, the national and 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 as approved by Parliament for the National Government and the county assemblies for the County Governments. 6) Fiscal risks shall be managed prudently; and 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. viii I ENHANCING ECONOMIC TRANSFORMATION FOR A SHARED PROSPERITY IN NYERI COUNTY Overview 1. The 2015 Nyeri County Fiscal Strategy Paper is the second to be prepared under the new constitution with devolved governance structures in place. As such, it sets out the priorities of the county in the medium term as outlined in the County Integrated Development Plan (CIDP), 2013 – 2017. 2. The national development trends, together with renewed investor confidence in the country, will accelerate growth prospects in the county by creating more jobs and investment opportunities. This will be made possible by downward trend in interest rates, continued stability of exchange rates and inflation being contained at single digit with the continued fall of fuel prices globally. This will lead to creation of more assets hence sustainable growth and development from the national to the county level. 3. Economic growth prospects remain high as the county continues to invest in infrastructural development. The county’s economy is mainly agricultural based and continued investment in the sector will increase levels of income and employment opportunities. 4. Despite the bold economic reforms undertaken at the national level, the county is still experiencing development challenges which may hamper growth and development as we move forward. Such challenges include; insecurity, inadequate and high cost of energy, inappropriate agricultural practices, undeveloped and poorly maintained road network especially in the vast Kieni sub county and continued litigations on the revenue administration laws. In addition, the emerging high and unsustainable recurrent expenditure, weak budget implementation and fiscal related challenges surrounding devolution, if not addressed will continue to constrain the county economy from achieving its full potential 5. The county will ensure that the objectives of devolution are achieved through better service delivery and rapid local economic development as well as jobs creation in line with our 1 2015 Nyeri County Fiscal Strategy Paper Vision 2030. However, this can only occur if the fiscal discipline in the use of devolved resources is entrenched and national macroeconomic environment remains stable. There is, therefore, great need to lay a strong economic foundation that will generate the resources for the entire county. 6. The enhanced economic and transformation agenda of the County Administration is premised on addressing outstanding constraints and anchor stability for sustained and inclusive economic growth and development that opens up opportunities for a shared prosperity. It covers five broad areas, namely:  Investment in quality and accessible healthcare services through establishment of level 4 hospitals in the entire 8 sub- counties and shifting from curative to preventive services. Prevention and early reporting non communicable diseases will be done through the Community health groups in based in the 265 sub locations.  Youth and employment creation where the focus will be on empowerment and skill enhancement to build capacity for wealth creation.  Upgrade the road network by removing encroachments and gravelling them to all weather standards. Drainages will also be opened up as water clogging remains a threat to road surface.  Investing in agricultural transformation and food security to expand food supply, reduce food prices and support expansion of agro-processing industries.  Creating a conducive business environment, though licensing and speedy approvals so as to encourage innovation, investment and growth in the County. Programmes for achieving enhanced economic transformation for a shared prosperity 7. The programmes to be funded in the 2015/16 Budget as outlined in this County Fiscal Strategy Paper rides on the priorities outlined in the County Integrated Development Plan 2013- 2015. In this regard, this County Fiscal Strategy Paper outlines economic policies and sector development directions as well as department-based expenditure programmes that the county government intends to implement over the next three years, in order to achieve its development agenda. In the FY 2015/16 budget, emphasis will be on shifting of resources in favour of growth 2 2015 Nyeri County Fiscal Strategy Paper and job creation and to support Public-Private Partnership in pursuit of new economic opportunities. Effective and efficient management and administration of county affairs 8. The County Government will continue to ensure that the citizens are governed and served in the best way possible towards achievement of sustainable growth and development. Resources will be utilized prudently so as to ensure optimal benefit to the public. Issues of accountability will be strengthened and citizen score cards will be a measure of our performance. Disaster management and timely response 9. The County Government has established a disaster management and response unit with a central command under the office of the Governor and specifically under the Office Deputy Governor. This unit is expected to complete mapping out of disaster prone areas and come up with measures of risk reduction in collaboration with the Kenya Red Cross Society. The team will continue to strengthen capacity to be well equipped for timely response to all forms of disasters Intergovernmental liaison and people representation at national and international levels 10. To achieve economies of scale, the government will continue working closely with other neighboring counties and explore all possible areas of cooperation for the benefits of the citizens of Nyeri. Such areas include policy harmonization in fiscal strategies and the marketing of farm produce e.g. coffee, milk and tea. Agenda setting in both the legislative and executive functions 11. The two arms of the county government will continue working together in cooperation and consultation to address the social and economic needs of the people. Bills will be professionally drafted so as to achieve coherence in the management of the county affairs. Prioritizing Development 12. The county human resource will be rationalized for effective service delivery. This will be guided by the Capacity Assessment and Rationalization of the Public Service (CARPS) 3 2015 Nyeri County Fiscal Strategy Paper Report which was undertaken in November 2014. The exercise is also expected to remove duplications and overlaps and ensure resources are utilized more efficiently and productively towards county development priorities. 13. In the Fiscal Year 2015/16, the County Government expects to continue receiving support from the National Government so as to improve on service delivery as envisaged in the constitution. In addition, the County Government will ensure that the funds are prudently managed in line with the fiscal responsibility principles under the Public Finance Management Act, 2012. There will be need to invest in capacity building at the County Government. 14. There is need to prioritize resource allocation to the key areas of economic growth and development while ensuring that debt levels are sustainable. The Integrated Financial Management System (IFMIS) Platform has eliminated manual payments systems thus saving funds that have otherwise been previously lost through manual paper work. 15. In the public sector there is a growing challenge of high wage bill. The wage bill has become unsustainable currently taking up over 50 percent of our revenues. There is therefore, need to develop a wage policy for the County Government. These wage bill pressures are also escalated by pensions and gratuities for permanent and contractual employees respectively thus increasing the County's contingent liability. 16. It is expected that the Salaries and Remuneration Commission will, in the medium term, continue to set the salaries of state officers and recommend salaries and allowances of public officers that will ensure fiscal sustainability, among other key public finance principles. Enhanced Economic transformation policies for a shared prosperity and inclusive growth 17. The year 2015 was the year that had been set globally to achieve the Medium Development Goals (MDGs). Though much has been achieved, much needs to be done and the County Government with the support of Development Partners will continue to direct substantial resources to economic and social sectors such as agriculture, infrastructure, health and education. The targeted social safety net programmes and sustainable employment will guarantee reduction in poverty to majority of our people beyond 2015. 4 2015 Nyeri County Fiscal Strategy Paper 18. Of necessity in the coming year is to continue with the momentum on investments in agriculture, particularly towards enhanced productivity, value addition and agribusiness and also infrastructure, particularly the road network, irrigation projects across the county especially the 8 mega dams in Kieni, enhancing inter- county relations, targeted support to small and medium enterprises, and support to the Youth, the Women and the persons living with disabilities to enable them generate the much needed jobs. The special groups, whom we have continued to register, will benefit with 30 per cent of all the county contracted works and services. 19. Over the next three years, the county will accelerate inclusive growth that will lead to enhanced standards of living and quality of life as well as to greater employment opportunities including jobs creation for the youth, women and the persons living with disabilities. The growth, so achieved, will result in poverty reduction and wealth accumulation. This will be through several key pillars as follows:  Strengthening Integrated Financial Management and Information System (IFMIS) and internal audit.  Ensuring a conducive business environment. This will enable the private sector conduct their business and attract investment across the county.  Ensuring fiscal consolidation by enhancing revenue mobilization efforts, cutting unproductive expenditures, providing resources for social safety nets and ensuring debt sustainability.  Priority funding to the key drivers of the County economy - agriculture (including irrigation) infrastructure, health, education, trade and tourism, security and public administration, environment and natural resources and special support to the youth, women and persons living with disabilities.  Strict legal compliance with particular reference to the laws on devolution Infrastructure 20. Over the medium term in order to drive economic growth, job and wealth creation, the focus will be improvement of infrastructure mainly roads and water for irrigation. 5 2015 Nyeri County Fiscal Strategy Paper 21. In particular, transport plans include improvement of local roads so that our people can move goods easily across and outside the county. There is a growing concern of the current shortage of houses within the county resulting from the increasing number of institution of higher learning. In the year 2015/16, we intend to upgrade the existing estates through PPP. Additionally, the county government will improve access to clean water and electricity, and will provide adequate allocation to programmes that will address food shortages in the county. 22. The county will ensure that all the trading centres, public health and education institutions are supplied with electricity. It will also provide walkways for non motorized traffic (people) in our major urban centres. Provision of adequate lighting along our streets, towns and estates in major urban areas will continue to be expanded to cover more areas. Social Sectors Health 23. On human capital development, the Government is committed to ensuring the highest attainable standards of health is achieved. The county will aim to ensure that all the citizens have access to well-equipped health facilities and well trained and motivated health care workers, in addition to developing systems to support and expand health care and improved sanitation. There will be increased attention to the promotion of primary health care mainly through the “Afya Mashinani” programme. More resources will be directed to the control and management of non- communicable diseases such as diabetes, hypertension, cancers and renal diseases. The county will promote reproductive health, behaviour change and mental health. The ambulance services will be adequate, operated and coordinated from a central command. Emphasis will be put to ensure completion of all ongoing and reviving of stalled projects. Community health groups will be capacity build and provide with simple diagnostic kits as emphasis will be on preventive than curative health services. Education 24. The county will ensure ECDE centres and youth polytechnics are fully functional with teachers/ instructors and equipments. The County Government is well aware of the challenges 6 2015 Nyeri County Fiscal Strategy Paper the youth are facing and will create link between education and employment driven by knowledge and technology. The County Government will rebrand youth polytechnics into technical training centres and anchor their training to the promotion of small and medium enterprises (SMES) and establishment of cottage industries in the rural areas. ICT techno centres will be established in all the sub- counties for access of information and creation of jobs. The county will construct a modern stadium at Ruringu and promote various sporting activities. Other stadiums, like Karatina, will continue to get a face lifted so as to ensure sporting activities and talent nurturing for the youth is strengthened. Productive sectors a. Agriculture 25. The county will strive to promote a paradigm shift in agriculture by embracing commercialization in farming and lower the cost of production. This will be achieved through deliberate efforts to reduce the cost of farm inputs such as fertilizer thus increasing farmers’ margin and therefore accelerate rural development. The county will also improve collaboration and partnership with stakeholders and encourage value addition of farm and livestock products, and mainly milk, before marketing. Farmers will be mobilized to support county-wide farmers’ co-operative societies and be encouraged to jointly process farm products and thus enjoy the benefits of economies of scale from the agricultural industry. b. Trade and Industry 26. The County government will encourage development of cottage industries through provision of working sites and subsidy schemes for procurement of inputs such as equipment and machinery. The County will also undertake reforms to improve the business environment to facilitate more business creation, reduction of cost of doing business, increased revenues, enhanced service delivery and greater investment opportunities. It will also develop commodity exchange and marketing information systems. The county will enhance Joint Loans Board allocations to reach more traders. Further, a web site will be created to inform the world be investors of the available opportunities in the county. 7 2015 Nyeri County Fiscal Strategy Paper c. Tourism Sector 27. The County has a vast number of tourists’ attraction sites ranging from a rich historical heritage, wildlife and places of scenic beauty. It falls within the Mt. Kenya and Aberdare ranges tourist circuits and has two internationally renowned parks namely Aberdares and Mt. Kenya. The county will develop a tourism strategic plan, promote branding and signage of tourism sites. Further Home stays will be promoted for culture exchange and as a source of income for communities in the county 28. The main tourist attraction sites within the county include; Wildlife; landscape sceneries; Spectacular Waterfalls around central Aberdares; Worlds acclaimed cultural attraction: Entertainment by local community groups; Game viewing lodges within Mt. Kenya National Park; Base for climbing Mt. Kenya and Historical sites and monuments under Kenya Museums. Structural Reforms 29. The County Government will continue to improve the investment climate by addressing bottlenecks witnessed in conducting business. a. Financial Sector reforms 30. In line with the Vision 2030 objective to create a vibrant and globally competitive financial sector that will promote high level of savings to finance county’s overall investment needs, the County Government will continue to implement key reforms in the fiscal regime along the dimensions of access, efficiency, and stability. These dimensions are mutually reinforcing and each needs to be addressed to ensure sustainable growth and development in the county. The county will continue with the efforts to build the financial capability of the citizens. This will be achieved through training on financial literacy to develop a savings and investment culture in collaboration with the financial institutions mainly the SACCOs. b. Strengthening Governance 31. The Audit unit and IFMIS will be strengthened to ensure prudence in resources management. This will enhance value for money in implementation of projects and programmes in the county. 8 2015 Nyeri County Fiscal Strategy Paper c. Devolution 32. The county government will ensure that the Accounting Officers understand and cascade downwards the principles of the PFM Act, 2012 through adequate capacity building. It will also ensure that the principle of inclusiveness, as stipulated in the constitution, is implemented e.g. through public participation in decision making and ensuring the one third gender rule is adhered to. The public will always be consulted on all financial matters and especially in budget preparation. d. Audit of the Integrated Financial Management Information System (IFMIS) 33. The IFMIS has been implemented at the county level. As a step to ensure integrity of the system, the County Treasury will in the year 2015/16 conduct periodic audit to ensure that it is operating as initially intended. E-procurement will be entrenched to ensure compliance with the PFM act, 2013. Further efforts will be made to integrate IFMIS with the IPPD Outline of the 2015 County Fiscal Strategy Paper Recent Economic Developments and Outlook 34. The next section (II) outlines the economic context in which the 2015/16 budget is prepared. It provides an overview of the recent economic developments. Fiscal and Budget Framework 35. Section III outlines the fiscal framework that is supportive of growth over the medium- term, while continuing to provide adequate resources to facilitate development and ensuring that the public debt will be sustainable. Departmental Allocation of Resources 36. Section IV provides a framework of managing the county departments and the proposed allocation of resources between departments. 9 2015 Nyeri County Fiscal Strategy Paper County Budget Framework Section V presents the resource envelope and spending priorities for the proposed 2015/16 Budget and the Medium Term Expenditure Framework. Departmental achievements and priorities are also reviewed for the FY 2014/15. 37. Section VI provides conclusions. II RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK Overview of Recent Economic Performance 38. The national economic growth was fairly satisfactory in 2014, despite a somewhat stagnating demand for our exports in traditional markets especially European Union due to the delays in signing the Economic Partnership Agreement (EPA). The ravaging drought contributed to poor harvests and this pushed the price of food upwards. Reduced earnings, from tea and tourism, the leading foreign exchange earners, contributed to reduced incomes for farmers and the general population. The private sector activities benefited from improved macroeconomic environment and also the falling fuel prices during the year. Inflation has declined steadily towards a single digit due the reduced prices of fuel and energy in the recent months. Short- term interest rates have also eased in line with the drop in inflation, which has reduced from double digits in 2013 towards the eight percent target in recent months 39. The county economy is mainly agricultural and there is some noticeable reduction in production which can be attributed to low prices and unfavourable climate as indicated in the tables below. Table 1: Crop production trends and value 2011 2012 2013 2014 10 2015 Nyeri County Fiscal Strategy Paper Crop Production Production Revenue Production Revenue Production Revenue Metric Bags Kshs. Metric Tons Kshs. Metric Tons Kshs. Tons Main Cash crops Tea 62 62.9 3,486,000,000 178000 4,592,400,000 166,969 3,400,000,000 Coffee 12600 36 183.8 2,042,000,000 43,000 2,400,000,000 27,000 1,506,976,744 Maize 28,346 36,170 43,404,000 276,362 414,543,000 Beans 10,700 11,102 27,550,000 17,893.90 71,575,600 Wheat 4,683.50 9,367,000 Horticulture Banana 16,296 212,296,000 15938 236,803,424 Cabbages 12.4 96.99 359,640,000 42903 666,270,000 44384 714,348,000 Irish Potatoes 542.2 2586.6 1,767,347,800 87427.5 1,181,794,330 91964 1,568,441,000 French Beans 901.7 41,358,500 804.75 36,163,500 Tomatoes 51.3 244.08 235,045,700 3165.62 109,460,000 3720 124,083,500 Bulb Onions 1085.3 54,630,500 1271.8 62,170,000 Garden Peas 55.2 2,606,000 51.62 2,521,040 Capsicum 183.68 8,095,800 185.88 8,212,200 Avocado 2792.7 38,275,000 2979.4 43,367,000 Passion fruit 484.3 18,399,000 476.2 17,601,000 Carrots 5421 111.80 35,711,051 314.2 4,759,400 285.2 5,290,000 Courgettes 116.2 3,816,000 105.5 3,250,000 Macadamia 1395.65 80,965,000 3025.5 166,435,000 Tree tomato 474.6 21,593,043 851 40,231,500 Mangoes 449.3 13,295,000 475 15,169,000 Arabicum 120.85 6,715,548 76.46 5,390,400 Plums 140.4 1,972,000 96 2,000,000 pawpaw 248 0 Apples 32 0 Kales 31.85 130.96 22,416,972 134 0 Spinach 178 0 Floriculture Tuberose 0.08 0 Ornis 0.2 0 Morbydick 1.1 0 Totals 158,898 9,954,186,721 166,690.31 9,502,953,128 Source: Department of Agriculture, Livestock, Fisheries, and Cooperative Development 40. The tea production given is for those farmers under the Kenya Tea Development Agency’s seven factories in the county. The production increased slightly in 2013 and dropped in 2014 due the prolonged dry weather. Coffee production also increased slightly in 2013 due to improved payments to farmers as compared to previous years. In 2014 to declined significantly and this is an area of concern for the county. A lot of unexploited potential exists in the horticultural sector especially if irrigation farming could be enhanced. The table below shows the county’s livestock production for the period between 2012 and 2014. ( the products except eggs are measured in kilograms). 11 2015 Nyeri County Fiscal Strategy Paper Table 2: Livestock Production 2012 2013 2014 Livestock Production Production Revenue Production Revenue Kgs Metric tons KSH. Metric tons KSH. Dairy Cattle 1,508,603kgs of meat 163400 MT 4,166,700,000 172,000 MT 4,380,000,000 Exotic 163,400,000 litres of 4,166,700,000 73,244,308 2,145,953,164 milk Crosses 52,912,220 litres of milk 8,600,000litres of milk 213,300,000 Poultry 8,806,000 eggs 263,890,000 173196520 Indigenous 96,300 trays 28,890,000 127,638 36,813,950 Chicken Layers 700,000 trays 210,000,000 473,415 115,936,330 Broilers 252,934kg 100,000Kg 25,000,000 115,576 20,446,240 Shoats 113726590 Dairy Goats Sale of 1708 goats 19,780,000 Meat Goats 178,857 kg meat 137,236 kg meat 40,799,890 128,730 43,571,770 Hair sheep 422,666 kg meat 165,600kg meat 52,969,700 243,003 85,395,650 Wool sheep 22,500 kg wool 450,000 Rabbits 29,476 kg meat 52,500 kg meat 51,200,000 33380 7,872,050 Beekeeping 34,120 of honey 103,199,800 54,546,380 Log Hive 1,876 kg honey 1,031,800 756 155,780 KTBH 112,582 kg honey 61,920,100 15,100 12,094,600 Lang stroth 73,178 kg honey 40,247,900 - - Pigs 173,581kg meat 310,000 kg meat 93,000,000 214870 42,296,000 Fish 12,000 14,000 Source: Department of Agriculture, Livestock, Fisheries, and Cooperative Development 41. In the analysis, a slight increase in production for most of the products has been noted. Apart from layers, broilers and rabbit all the other products increased in revenue but this can be attributed to instability in the marketing of the products. The community has not embraced beekeeping, despite the potential, as the earnings declined significantly between 2013 and 2014. Fiscal performance and emerging challenges 2014/15 Budget The County Assembly approved the 2014/15 budget with expenditures amounting to Kshs. 5,444,501,712 comprising of recurrent expenditure of Ksh. 3,809,115,053, development expenditures of Kshs. 1,635,386,659 which includes Kshs. 20,550,000 as a grant from DANIDA for health centres and dispensaries. These expenditures are expected to be financed by the revenue collected in the county and the allocation from the national government and donors. 12 2015 Nyeri County Fiscal Strategy Paper Implementation progress and emerging fiscal challenges 42. Budget implementation started at a slow pace in the early months of the financial year. This was brought about by the delay in the approval of the budget which affected timely receipt of funds from the national treasury. The county therefore operated on Vote-on- Account for the first half of the financial year. The county budget was also coupled with shortfall in revenue collection due to delay in legislation of Revenue Administration Act, 2014. 43. Expenditure pressures mainly relate to salary demands from the devolved functions. These pose risks to the stability of the budget for 2014/15 in the face of resource constraints. Going forward, the regulations set by SRC will need to be adhered to so as to eliminate wage pressures after the budget has been prepared. As at end of December 2014, cumulative revenue receipts amounted to Kshs. 268,144,538 against a target of Kshs. 671,983,402 (Kshs. 1,343,966,804- annual) resulting in an under performance of Kshs. 403,838,864 44. Expenditure execution has lagged behind in the first six months of the financial year on account of delayed release of funds from The National Treasury and inadequate structure systems. Table 3: Cumulative Budget Out-turn, July – December 2014 Performance July – Dec 2013 Target Achieved Deviation Total revenue collected 671,983,402 268,144,538 -60.1% - - Total Expenditure - Recurrent 1,904,557,527 869,347,199 54.4% - Development 817,693,330 537,733,489 34.2% Source: Department of Finance and Economic Planning 45. To confront the challenges of revenue shortfall and expenditure pressures, the County Government will step up efforts to implement and enforce the Revenue Administration Act, 2014 enhance the cashless system of revenue collection to eliminate leakages and realize revenue as targeted in the FY 2014/15, as well as rationalize and even cut some expenditures. 13 2015 Nyeri County Fiscal Strategy Paper 46. The major sources of revenue are parking fees, single business permits and land rates. New sources will be identified to widen the base while the A.I.A collected by the departments with devolved functions will be directed to the county fund to bridge the gap. More parking areas will be created as this has proved to be a major source of revenue. 14 2015 Nyeri County Fiscal Strategy Paper III FISCAL AND BUDGET FRAMEWORK Overview 47. The 2015 County Fiscal Strategy Paper emphasizes on:  Fiscal consolidation while ensuring that the resources in the county are adequate to promote growth. The County Government is committed to a reduction in the recurrent expenditure to devote more resources to development.  Continued reforms in expenditure management, implementation and enforcement of the Revenue Administration Act, 2014 will be accelerated. This will increase revenue and create fiscal space for spending on agriculture, infrastructure and other development programmes.  Efficiency by ensuring improvement in the productivity of expenditure while ensuring that adequate resources are available for operations and maintenance to the lowest county government structures. Observing fiscal responsibility principles 48. The County Government recognizes that the fiscal stance it takes today will have implications into the future. Therefore, and in line with the Constitution of Kenya, 2010 and the Public Finance Management (PFM) Act, 2012, the principle of sharing the burdens and benefits of the use of resources and public borrowing between the present and future generation implies that we have to make prudent policy decisions today so that we do not impose unwarranted debt burden to our future generations. 49. In this regard, the County Government will observe the fiscal rules set out in the PFM Act, 2012 so as to entrench fiscal discipline. 15 2015 Nyeri County Fiscal Strategy Paper 50. Fiscal responsibility has become even more important since the Constitution requires the Government to progressively provide for a minimum basic standard of economic and social rights to its citizens within available resources. In order for spending to increase on a sustainable basis to meet these basic needs, we should be prepared to match the increased expenditure demands with a corresponding increase in revenue yield through efficient collection, widening of revenue bases, and reasonable rates. It is therefore imperative to reform and modernize the fiscal regime to ensure stability of revenue effort, while at the same time continuing to restructure expenditure systems to ensure efficiency and create fiscal space required to fund these basic needs on sustainable basis. Fiscal structural reforms On the expenditure side, the County Government will continue with expenditure management reforms to improve efficiency and reduce wastage in line with the PFM Act, 2012. Expenditure management will be strengthened with implementation of the Integrated Financial Management Information System (IFMIS) to cover the 10 county departments’ and units’ expenditures. 51. The County Government will institute measures to contain the public wage bill and release needed resources for development. These would include payroll cleansing and implementation of the CARPS report. The County will encourage proper and transparent use of resources and encourage quality service delivery its citizens. Going forward the county treasury will in 2015, institute and strictly enforce, among others, the following measures:  Undertake a rationalization of public expenditures to identify and remove expenditure overlaps and waste;  Develop in the first half of FY 2015//16, a framework for enforcing cost benchmarks for projects and consumables  Conduct every year, at least one Public Expenditure Tracking in any sector where there is value for money concerns;  Entrench program based budget and enforce performance benchmarks for execution of the development budget of at least 60 percent by all county departments and units. 16 2015 Nyeri County Fiscal Strategy Paper  Make full operational the Integrated Financial Information Management System (IFMIS) as an end-to-end transaction platform in the county. 2014/15 Budget Framework 52. The County government strategic objectives are outlined in the County Integrated Development Plan on which the 2015/16 budget framework is based. The presumed economic growth will assume a normal weather pattern during the year as the county is mainly agricultural based. Revenue Projections 53. The County Government is expected to institute measures to expand revenue base and eliminate leakages. The modernization of revenue collection from manual to cashless method and also the implementation of Revenue Administration Act, 2014 are expected to simplify revenue collection and enhance the revenue yield. As such, total revenue including FIF is expected to be Kshs 1.35 billion in the year 2015/2016. Expenditure Forecasts 54. The key policy document guiding the County Government’s expenditure decisions is the first CIDP (2013-2017), which provides the updated development priorities of the county. In 2015/16, overall development expenditures are projected at 30 percent of all the revenue received. Recurrent Expenditure 55. Recurrent expenditures are expected to remain at 70 percent of total budget in 2015/16. This is due to the increased wage bill pressures from the continued devolving of such department as youth training and absorption of ESP contracted employees. 56. With respect to goods and services, expenditure ceilings for county departments are determined by the allocation for the previous year budget as the starting point. The ceilings are 17 2015 Nyeri County Fiscal Strategy Paper then reduced to take into account one-off expenditures in FY 2014/15 and then an adjustment factor is applied to take into account the general increase in prices. Development Expenditure 57. Consistent with the objective of allocating adequate resources towards development outlays and the need to ensure completion of critical infrastructure (roads, energy and transport), the minimum for development expenditures including grants is 30 percent of the total revenue in 2015/16, Most of the outlays are expected to support critical infrastructure that will crowd in private sector investment as well as facilitate critical interventions to remove binding constraints to growth. 58. With improvement in procurement planning and introduction of performance contracting, the absorption capacity of project funds is expected to increase resulting in a higher investment level in infrastructure activities. This will support the delivery of services and encouragement investment by the private sector. 59. In view of challenges which may arise from natural calamities, an emergency provision of 4.4 percent of the total county expenditure was provided for in the budget for FY 2013/14. In FY 2015/2016 the fund will be operationalized after the necessary legislative framework has been put in place. Overall Deficit Financing 60. The overall budget deficit (including grants) in 2015/16 is expected to be financed through PPP and other revenue raising measures. Summary 61. Fiscal policy will support growth within a sustainable path of public spending by maintaining the county expenditures within the budget limits. Therefore, moderation in county expenditures will help assure debt sustainability and intergenerational equity in line with the Constitution of Kenya, 2010 and the fiscal responsibility principles in the PFM Act, 2012. 18 2015 Nyeri County Fiscal Strategy Paper Meanwhile, efficiency and economical spending of County Government resources will be enhanced to create room for critical interventions and pro-poor spending. IV DEPARTMENTAL ALLOCATION OF RESOURCES Introduction 62. The 2015 County Fiscal Strategy Paper is being prepared at a time when significant progress has been made in establishing and operationalizing the financial and procurement systems in the county. This progress notwithstanding, the County Government has continued to experience various challenges in planning and budgeting as well as the execution and reporting on budgets. 63. Due to limited capacity on budget making and implementation by county departments, there were inconsistencies in departmental budget allocations necessitating preparation of supplementary budget to boost on various items. 64. The county has continued to address the capacity gaps through training on IFMIS and PPOA. The County Government will continue to train its staff on all issues that will facilitate efficiency in resource management. Departmental Budgeting 65. The County Executive Secretary in charge of Finance and Economic Planning will issue guidelines to the county departments on the preparation of 2015/16 budget with specific ceilings. Each department is expected to plan, formulate and execute their budgets. The 2015/16 budget for the county will be prepared in line with the Public Finance Management Act, 2012. 19 2015 Nyeri County Fiscal Strategy Paper Resources available Equitable share 66. This is from the shared national revenue as provided for in Article 202 and 203 of the constitution. The county will receive part of the constitutionally approved share from the consolidated fund as recommended by CRA and approved by The National Assembly. Additional resources 67. In addition to the equitable share of revenue, the County Government is also expected to get additional resources from the following sources:  Conditional and unconditional allocations from share of the national government as contemplated under Article 202(2) of the Constitution.  Own revenues from specific county revenue raising measures through imposition of property taxes, entertainment taxes, as well as any other tax and user fees and charges as authorised to impose.  Borrowing provided national government guarantee is obtained as well as the approval of the County Assembly. This will only occur if the funds will be applied to development activities.  Grants and donations from development partners in accordance with section 138 and 139 of the Public Finance Management Act, 2012. Allocation of Revenue among Departments 68. The Table provides estimates of revenue allocation among departments in the county for financial year 2014/15. The allocations comprise of the recurrent and development expenditure. 20 2015 Nyeri County Fiscal Strategy Paper Table 4: Budgetary Allocations by County Departments and Units, July 2014 – June 2015 DEPARTMENTS RECURRENT DEVELOPMENT TOTAL County Assembly 356,182,593.00 30,000,000 386,182,593.00 Office of the Governor 100,236,675.00 37,300,000 137,536,675.00 County Secretary 64,744,930.00 76,311,419 141,056,349.00 Public Administration, Information and 157,555,978.00 34,880,600 192,436,578.00 Communication Finance and Economic Planning 486,738,851.00 90,190,112 576,928,963.00 Agriculture, Livestock Development, Fisheries 314,585,644.00 109,624,000 424,209,644.00 and Co-operative Development Water, Forestry and Wildlife, Environment 157,068,238.00 110,129,222 267,197,460.00 and Natural Resources Education, Youth Affairs, ICT and Sports 78,788,600.00 67,710,000 146,498,600.00 Health Services 1,771,343,076.00 352,641,463 2,123,984,539.00 Lands, Physical Planning and Development 46,498,444.00 24,306,203 70,804,647.00 Public Works, Roads, Transport 106,360,440.00 510,950,000 617,310,440.00 Trade, Industrialization Development and 45,335,920.00 39,154,080 84,490,000.00 Tourism Gender, Culture and Social Development 49,468,000.00 26,600,000 76,068,000.00 Energy 39,850,000.00 125,589,560 165,439,560.00 County Public Service Board 34,357,664.00 0 34,357,664.00 TOTAL 3,809,115,053 1,635,386,659 5,444,501,712.00 Source: Department of Finance and Economic Planning Fiscal Discipline 69. The county will pursue prudent management of resources as outlined in the PFM Act, 2012. With departmental programme based and itemised budget, delivery of goods and services in the county will be hastened. This will be made possible by full adoption of IFMIS and ensuring efficiency in procurement procedures. Equity in Allocation of Resources 70. Though, in recent years there has been notable economic growth in the county, the fruits of this growth have not been shared equitably. Some factors contributing to the skewed economic growth can be attributed to historical and environmental aspects where some parts are newly settled and experiences erratic weather conditions. The county will continue to pursue policies that promote equity as this will help, directly and indirectly, to reduce poverty. Equity-enhancing policies, particularly investment in infrastructure 21 2015 Nyeri County Fiscal Strategy Paper (Roads and irrigation system) and human capital such as education and health can, in the long run, boost economic growth, which, in turn will lead to alleviation of poverty. 71. The county also recognizes that policies that promote equity can boost social cohesion and reduce political suspicions. In such circumstances, well-targeted social safety nets will be introduced to shelter the consumption levels of the poor in the disadvantaged areas of the county especially the vast Kieni sub county without forgetting other pockets of poverty such as Gikondi in Mukurweini sub county. Capacity Building of County Departments 72. Evidence shows that the county departments are experiencing challenges in the planning and budgeting as well as in the execution and reporting on their budgets. The CES Finance and Economic Planning will continue to ensure that all departments allocate funds for training programmes for the departmental personnel. There is also need to deploy requisite professionals to departments to give support in planning and budget making. It is hoped that after staff rationalization, the capacity gaps in the county will be identified and adequately addressed by the human resources department. 22 2015 Nyeri County Fiscal Strategy Paper V 2014/15 EXPENDITURE FRAMEWORK Resource Envelope 73. The resource envelope available for allocation among the spending departments is based on the fiscal and budget framework outlined in Section III:  Allocation from the equitable share from the Commission of Revenue Allocation will finance over 77 Percent of the county budget. County generated revenue is expected to finance the difference.  The county will endeavour to entice the private sector through PPP to fund some of the development activities during the year 2015/16.  County Borrowing, if any to finance any deficit, will be limited to funding development activities. Spending Priorities 74. The CIDP has identified priority sectors for funding and this will be adjusted as we progress in its implementation. 75. The PFM Act, 2012 require the County Government to promote budgetary transparency, accountability and effective financial management of the economy and the public sector. Therefore, inefficient and wasteful public expenditure will be eliminated at all levels in order to promote public trust in County Government spending. 23 2015 Nyeri County Fiscal Strategy Paper 76. Overall, the 2015/16 budget will focus on the following:  The county priority sectors which include agriculture and infrastructure will continue to receive adequate resources. With a combined allocation of 26.6 % of total discretionary expenditures, the above sectors will receive a significant share of resources in the budget, and require them, efficiently, to generate fiscal space to accommodate other strategic interventions in the county.  At a total allocation of 27.3 % of total discretionary expenditures will be allocated to Education, youth, sports, ICT, sanitation and health sectors thus receiving the largest share of resources. These sectors are important in supporting social needs in the county.  Other priority areas including tourism, trade and industry, water and environment. 2014/15 Expenditure Estimates 77. Cumulative expenditure as at end of December 2014 was Kshs 1,407,080,688 which was mainly used on wages and other operational expenses. On a cumulative basis, local revenue performance during the first half of the financial year was Kshs 268,144,538 which was about 39.9 percent of the half year target. 78. In the course of budget implementation during the first half of the Financial Year, several challenges emerged. They include: Late budget approval; Overestimation of the revenue base, delay in approval of Revenue Administration Bill; High and unsustainable wage bill and Slow adaptation of the new accounting systems. Medium-Term Expenditure Estimates 79. Table 5 below provides the projected baseline ceilings for the 2015/16 budget estimates and projections for the year 2016/2017 and 2017/2018 classified by county departments and units. 24 2015 Nyeri County Fiscal Strategy Paper Table 5: Projected budget allocations 2015/2016-2017/2018 Department/ 2014/2015 2015/2016 budget ceilings (Kshs) Projections Projections Unit budget 2016/2017 2017/2018 estimates (Kshs) Recurrent Development Total Budget Total Budget Total Budget County 386,182,593 506,000,000 50,000,000 556,000,000 583,800,000 612,990,000 Assembly Office of the 137,536,675 103,599,835 - 103,599,835 108,779,827 114,218,818 Governor County 141,056,349 97,811,352 8,000,000 105,811,3521 111,101,920 116,657,016 Secretary Public 192,436,578 211,392,409 43,900,000 255,292,4092 268,057,029 281,459,881 Administration, Information and Communication Finance and 576,928,963 492,952,377 210,877,245 703,829,6223 739,021,103 775,972,158 Economic Planning Agriculture, 424,209,644 345,835,563 155,668,532 501,504,0954 526,579,300 552,908,265 Livestock Development, Fisheries and Co-operative Development Water, Forestry 267,197,460 137,804,000 121,224,655 259,028,655 271,980,088 285,579,092 and Wildlife, Environment and Natural Resources Education, 146,498,600 64,396,430 116,931,730 181,328,160 190,394,568 199,914,296 Youth Affairs, ICT and Sports Health Services 2,123,984,539 2,014,297,388 271,492,571 2,285,789,959 2,400,079,457 2,520,083,430 Lands, Physical 688,115,087 107,554,835 581,182,847 688,737,682 723,174,566 759,333,294 Planning and Development Trade, 84,490,000 72,084,786 113,098,823 185,183,609 194,442,789 204,164,929 Industrialization Development and Tourism Gender, Culture 76,068,000 53,177,284 29,279,929 82,457,213 86,580,074 90,909,077 and Social Development Energy 165,439,560 54,227,186 138,242,610 192,469,796 202,093,286 212,197,950 County Public 34,357,664 40,297,417 5,000,000 45,297,417 47,562,288 49,940,402 Service Board Total 5,444,501,712 4,301,430,862 1,844,898,942 6,146,329,804 6,453,646,294 6,776,328,609 Source: Department of Finance and Economic Planning Notes  The County Secretary’s budget includes Kshs 70 M for staff medical insurance  The Department of Finance budget includes Kshs. 180 M for Ward Dev. Fund and Kshs. 40 M for contracted public servants gratuity and Kshs. 30 M for Emergency fund  Agriculture budget includes Kshs. 30 M for Agricultural Inputs/seeds subsidy fund  Education budget includes Kshs. 65 M for Education Endowment Fund.  Culture, Gender and Social Development includes Kshs. 25 M for disaster response jointly with Kenya Red Cross  Department of Trade budget includes Kshs. 70 M for refurbishment of the existing markets 25 2015 Nyeri County Fiscal Strategy Paper Baseline ceilings 80. In the recurrent expenditure category, non-discretionary expenditures takes first charge and includes payment of statutory obligations such as wages, salaries, pension, payee and utilities. 81. Overall, expenditure on non-discretionary costs account for about 55.8 percent of the total revenue. While the total recurrent expenditure accounts for 70 per cent of the total budget 82. A total of 30 percent of the total revenue must be available to fund planned development projects and programmes. 83. Development expenditures are shared out on the basis of the county priorities as outlined in the CIDP, 2013-2017, as well as other strategic interventions to deal with unemployment and remove constraints to faster socio-economic growth as outlined by various policy and concept documents. The following guidelines are used:  On-going projects: emphasis is given to completion of on-going projects and in particular infrastructure projects and other projects with high impact on poverty reduction and equity, employment and wealth creation.  Strategic policy interventions: priority is also given to policy interventions covering the county, social equity, value addition and environmental conservation. Finalization of spending plans 84. The finalization of the preparation of the detailed budgets will entail thorough scrutiny to curtail spending on non-productive areas and ensure resources are directed to priority programmes. As detailed budgets are scrutinized and the resource envelope firmed up, it is likely that additional resources may become available during supplementary budgeting. The County Government will utilize these resources to implement various sector development directions in the CIDP. 26 2015 Nyeri County Fiscal Strategy Paper Priority Areas of Consideration for Additional Resources 1. Intervention identified during the stakeholders consultative forums for FY 2015/2016 county budget process. 2. Strategic intervention in the area of agriculture (especially irrigation programmes and other food security enhancing programmes), infrastructure (especially rural/feeder roads), health, youth, tourism, trade and industry to enhance sustainable development in the county. 3. Specific consideration to job creation for the youth, women and persons with disabilities based on sound initiatives identified within and outside the normal budget preparation. Details of Departmental Priorities 85. The County Integrated Development Plan for 2013– 2017 ensures continuity in resource allocation based on prioritized project and programmes which has been aligned to the Kenya Vision 2030 and strategic policy initiatives of the County Administration to accelerate growth, employment creation and poverty reduction. Governor’s Office 86. The office has the responsibility of ensuring smooth, efficient and effective delivery of services to the public. 87. The vision is to have a people oriented and transformative governance for results. 88. The mission is to provide overall leadership in governance, sustainable development and efficient service delivery. 89. The priorities of this office is to ensure; Effective and efficient management and administration of county affairs; Disaster management and timely response; Intergovernmental liaison and people representation at national and international levels; Agenda setting in both the legislative and executive functions. Finance and Economic Planning 27 2015 Nyeri County Fiscal Strategy Paper 90. This department consists of Finance, Economic Planning and the County Treasury sub- sectors. 91. The vision is to be a leading public sector in policy formulation, implementation, coordination, supervision and prudent resource management. 92. The mission is to provide overall leadership and policy direction in resource mobilization, management and accountability for quality public service delivery. 93. In the medium term the department priorities will be to: Enforce compliance in revenue collection to achieve increase of 100 percent revenue collection from the current 0.5B to 1B by 2014 and sustain an annual increment of 30 percent in the subsequent years; Enhance public private partnerships so as to spur growth; Introduce non-cash revenue collection system; Establish and equip Information and Documentation Centres (IDC) to link the county functions; Establish and integrate an effective citizen driven public participation mechanism; Put in place M & E system and Develop a mechanism for dissemination and follow-up on the findings. Agriculture, Livestock, Fisheries, and Cooperative Development 94. This department comprises of Agriculture, Livestock, Fisheries, Irrigation and Cooperative Development sub- sectors. 95. The vision of the department is to be an innovative, commercially-oriented with modern agriculture, livestock and fisheries development practices. 96. The mission of the department is to improve livelihood of county citizens through promotion of competitive agriculture, sustainable livestock, fisheries and irrigation development. 97. The department priorities include; Commercialization of farming; Lower the cost of production; Improved working condition; Advocate for farmer friendly legislation; Improved collaboration and partnerships with stakeholders; Strengthening the management of agricultural co-operatives; Encouragement of value addition of farm produce; Restocking of rivers and dams and Establishment of a fish cooling and processing plant. Health and Sanitation Services 28 2015 Nyeri County Fiscal Strategy Paper 98. This department explores Preventive, Promotive, Curative and Rehabilitative issues of health. 99. The vision of the department is to have an efficient and high quality health care system that is accessible, equitable and affordable for every citizen. 100. The mission is to promote and participate in the provision of integrated and high quality preventive, promotive, curative and rehabilitative health care services to all citizens. 101. The County health priorities in the medium term will be to: carry out health needs assessment, promotion of primary health care, improvement of the County Referral and Mt. Kenya Hospitals, organize ambulance services to be coordinated from a central command, establish an integrated health management system, improving the control and management of non-communicable diseases; and promoting reproductive health, behavior change and mental health. Public Administration, Information and Communication 102. This department consists of Public Administration, Information and Communication sub sectors. It aims at ensuring a harmonious coexistence between various actors in development of the county. 103. The Vision is to have a secure, just, cohesive, democratic, accountable, transparent and conducive environment for a prosperous county. 104. The mission is to ensure effective and accountable leadership, promote a just, democratic environment and establish strong governance institutions to empower citizens for the achievement of socio-economic and political development. 105. The medium term priorities will be to: Establish an effective citizen driven public participation mechanism; Establish a County Policing Authority; Ensure effective administration and governance of county affairs; Enhance and establish legal, institutional regulatory and policy framework. Water, Forestry, Wildlife, Environment and Natural Resources 29 2015 Nyeri County Fiscal Strategy Paper 106. The department consist of Water, Environment and Natural Resources, Forestry and Wildlife subsectors. 107. The vision is to have sustainable access to clean, safe and adequate water in a secure environment. 108. The mission is to promote, conserve, protect the environment and improve access to water for sustainable development. 109. The department priorities in the medium term will be: To increase the tree cover by 10 percent; Promote green economy; Construct 8 multi- purpose mega dams; Expand the domestic water coverage; Construct 4 water treatment plants; and Exploitation of ground water. Trade, Industrialization and Tourism Development 110. The department consists of Trade, Industrialization and Tourism sub-sectors. 111. The vision is to have a globally competitive economy with sustainable and equitable socio-economic development where citizens operate freely. 112. The mission is to promote, coordinate and implement integrated socio-economic policies and programmes for a rapidly industrializing economy. 113. The priority of the department in the medium term will be: To promote creative and innovative financing sector; Encourage development of cottage industries; Development of commodity exchange and marketing information systems. Lands and Infrastructure development 114. This department consists of Lands, Public Works, Roads and Transport sub sectors. 115. The vision is a world class provider of cost-effective physical infrastructural facilities and services. 30 2015 Nyeri County Fiscal Strategy Paper 116. The mission is to provide efficient, affordable and reliable infrastructure for sustainable economic growth and development for the people through construction, modernization, rehabilitation and effective management. 117. The department priorities in the medium term will be to: Achieve connectivity and smooth flow of motorized and non- motorized traffic; Maintenance of existing road network; Upgrading of existing roads to bitumen or gravel standards; Ensure adherence to construction codes and specifications through regular supervision and inspections; develop modern parking system and Establishment of a County Roads Board and Fund Energy The department consists of Energy Subsector 118. The department priority is to rresearch and exploit alternative and renewable sources of energy. 119. Others include: To ensure all the trading centres, public health and education institutions are supplied with electricity; provide adequate lighting along the streets and estates in major urban areas; Promote production and utilization of energy from biodegradable waste materials in learning and health institutions. Education, ICT, Youth Affairs and Sports 120. This department consists of Education, ICT, Youth Affairs and Sports sub-sectors. 121. The vision is to have a globally competitive education, training, ICT, research and innovation service for sustainable development. 122. The mission is to provide, promote and coordinate quality education and training, integration of science, technology, and youth and sports development for sustainable socio- economic development. 123. The priorities in the medium term will be: Engaging stakeholders in resource mobilization; strengthening the programmes in youth polytechnics and capacity building of instructors; Advocating for full mainstreaming of ECDE; Establishing one ICT / techno centre and Promote sports activities. 31 2015 Nyeri County Fiscal Strategy Paper Gender, Culture and Social Development 124. This department consists of Gender, Culture, Children, Labour and Social Services sub sectors. 125. The vision is to achieve sustainable and equitable socio-economic development. 126. The mission is to formulate, mainstream and implement responsive policies through coordinated strategies for balanced socio and economic development. 127. In the medium term the department aims to: Decrease the number of OVC and Children in Need of Care and Protection; Identify and establish the number of OVCs in the county; Adoption of a System’s approach to child protection; Enhancement of the capacity of cultural practitioners; Provide strategic resources for creative and cultural industries; Enhance and establish legal, institutional regulatory and policy framework on labour relations; Conserve, preserve and promote our cultural heritage for sustainable development and Development of cultural centre with a talent academy and a cultural tourist class hotel. 128. The department also aims at establishing a Heroes Memorial Park to preserve for posterity the memories of the heroes from the County such as Field Marshal Dedan Kimathi, General Stanely Mathenge, Prof. Wangari Maathai among others. 32 2015 Nyeri County Fiscal Strategy Paper VI CONCLUSION 129. In 2015/16 budget, the improvement of agriculture and expansion of infrastructure, while maintaining reasonable growth on social development continues to be a priority. Allocation of funds to the county departments will generally reflect the critical needs of the county residents. 130. The set of policies outlined in this County Fiscal Strategy Paper reflect the changed circumstances and are broadly in line with the fiscal responsibility principles outlined in the PFM Act, 2012. They are also consistent with the county sector development direction in the medium term as a basis of allocation of public resources. These strategic objectives are provided in the CIDP and the departmental strategic plans. 33 2015 Nyeri County Fiscal Strategy Paper Annex 1 Sources of Revenue to fund the budget – 2015/2016 No. Source Amount in Remarks Kshs. 1 Equitable Share 4,341,891,811 Assumed no major changes to our disadvantage 2 Conditional Grants and 453,960,093 Assumed all this amount will be donor funds channeled through the County Treasury 3 Internally Generated 1,350,477,900 Retained at the same level as this Revenue year (2014/15) hoping strategies introduced will give results Total 6,146,329,804 Source: Department of Finance and Economic Planning Annex II Revenue collected in the first 6 months of 2014/2015 REVENUE TYPE/ Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 TOTAL ACCOUNT DESCRIPTION COUNTY ALLOCATION CILOR Current Year LIQOUR LICENCE 256,000 687,000 354,000 589,500 95,000 72,000 2,053,500 CO-OPERATIVES 53,900 - - - 5,700 - 59,600 AUDIT FEES Agricultural 258,636 153,160 - 319,350 375,440 - 1,106,586 Mechanization Station Wambugu Agricultural - 534,065 329,700 433,280 979,995 49,740 2,326,780 Training Centre VETERINARY 252,685 270,770 169,360 315,145 296,720 271,275 1,575,955 CHARGES Slaughtering Fees 142,220 187,160 200,670 217,615 208,240 230,430 1,186,335 Slaughter House 58,885 16,000 18,900 12,800 17,700 8,325 132,610 Inspection Fees SALE OF - - 3,537,000 - - - 3,537,000 FERTILIZERS Tea cess - - - - - - 0 Coffee Cess - 280,039 - - - - 280,039 Revolving fund - - - - - - 0 Coffee(% of gross sales) Weights and Measures 158,540 145,360 35,200 - - - 339,100 Business Permits 4,596,775 2,565,363 2,387,157 2,103,140 2,485,782 613,765 14,751,982 Market 3,229,955 2,512,520 3,175,400 3,052,602 2,670,710 2,515,655 17,156,842 Entrance/Stalls/Shop Rents Bed Occupancy - - - - - - 0 Ambulant Hawkers 26,050 50,450 40,100 55,700 45,100 16,900 234,300 Licenses (Other than BSS Permits) Hospital Services 18,693,203 18,937,065 19,609,055 18,473,765 11,910,106 16,365,720 103,988,914 Public Health Public 1,144,049 1,038,400 1,270,875 810,200 426,400 478,000 5,167,924 Debts Clearance 132,400 97,000 124,000 214,000 93,500 45,400 706,300 Certificate Fee Application Fee 571,835 457,055 332,350 246,200 256,000 143,600 2,007,040 Business Subletting / 206,500 60,700 52,800 79,200 22,200 39,800 461,200 Transfer Fee 34 2015 Nyeri County Fiscal Strategy Paper REVENUE TYPE/ Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 TOTAL ACCOUNT DESCRIPTION Document Search Fee 20,800 14,450 5,250 13,200 10,250 4,350 68,300 Agency Fee (Fees 14 2,260 - 760 750 2 3,786 from KHC, Insurance Firms, etc.) Cheque Clearance Fee 300 600 - - - - 900 Impounding 427,100 231,800 464,300 248,300 499,350 203,000 2,073,850 Charges/Court Fines Sales of Council's 26,400 26,900 33,000 63,900 10,700 9,800 170,700 Minutes / Bylaws Tender Documents 31,000 1,000 1,023,300 363,000 105,000 249,000 1,772,300 Sale Sale of Old Office - - - - - - 0 Equipment and Furniture IFAD HALL - - 5,000 5,000 - - 10,000 miscellaneous Income - - - 15,750 4,500 1,000 21,250 Customers Deposits 49,700 42,665 60,050 102,311 50,745 59,145 364,616 (Other than Water & Sewerage) Benevolent Fund 164,500 146,500 122,500 86,000 75,500 54,000 649,000 Business promotions - - - - - - 0 Branding(wall, - - - - - - 0 vehicles etc) Central Kenya show - - - - - - 0 annual permit Fines,penalties, and - - - - - - 0 forfeitures Beacon Search - - - - - - 0 Pointing Fee Survey Fees - - - - - - 0 Parking Fees 9,067,560 8,512,140 8,790,550 8,742,380 8,771,195 7,945,355 51,829,180 Parking 311,100 320,100 176,470 168,600 162,400 152,200 1,290,870 Clamping/Penalties/Of fences fees Land Rates 2,227,152 1,841,637 1,150,949 1,668,745 519,427 1,489,592 8,897,502 Other Property 198,200 164,700 89,080 113,222 39,300 83,400 687,902 Charges Ground Rent-current 171,360 124,083 73,100 85,623 48,590 57,175 559,931 year Ground Rent - Other 147,920 142,275 114,708 64,558 82,174 114,827 666,462 Years Stand - 13,000 - 45,000 - - 58,000 Premium/Commission er of Lands Temporary Occupation 231,100 195,800 224,400 94,300 112,500 105,000 963,100 License (TOL),New occupation, Space Rent, Retainers fees Hire of Plant & - - - - - - 0 Machinery Plot Transfer Fee 46,000 40,100 30,500 84,700 59,700 26,200 287,200 Cess (Quarry, produce, 2,145,030 2,334,630 2,460,890 2,417,350 1,898,010 1,675,130 12,931,040 Kaolin, etc) Social Hall Hire 8,300 10,000 6,000 15,000 21,500 7,700 68,500 Stadium Hire 109,000 88,000 130,000 66,500 110,000 96,000 599,500 Housing Estates 1,179,440 1,059,125 853,874 1,165,200 1,142,891 892,000 6,292,530 Monthly Rent NYERI SLAUGHTER 40,000 40,000 40,000 40,000 40,000 - 200,000 KIGANJO 10,000 10,000 10,000 10,000 10,000 10,000 60,000 SLAUGHTER Housing Estates 122,933 216,509 - 16,752 14,457 39,966 410,617 Monthly Rent (Kiawara,majengo&Ki ngongo ph. 3) 35 2015 Nyeri County Fiscal Strategy Paper REVENUE TYPE/ Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 TOTAL ACCOUNT DESCRIPTION Approvals(extension - - - - - - 0 of users,pegging for kiosk,subdivision,trans fer,amalgamation,surv ey,boundary dispute etc) Advertisements(billboa - - - - - - 0 rds,blockage of roads,neon) Nursery Schools Fee 840 13,060 44,690 840 420 2,970 62,820 (KRT) Nursery Schools 6,800 1,850 20,950 14,800 11,350 - 55,750 Fee(Kingongo) Nursery Schools Fee 4,600 1,100 23,800 11,650 9,650 - 50,800 (Nyakinyua) Burial Fees 12,800 16,000 4,800 14,800 12,000 7,700 68,100 Health License & - 0 Medical Fee Public Toilets 53,810 50,250 45,585 35,065 49,195 32,020 265,925 Garbage Dumping 4,000 2,500 12,000 2,500 1,000 1,000 23,000 Fee/waste disposal charges Refuse Collection Fee 1,798,885 453,790 2,386,740 215,330 2,285,115 90,190 7,230,050 Sale of flowers,plants, - - - - - - 0 firewood, produce e.t.c Exhauster services 30,000 60,000 3,000 9,000 6,000 - 108,000 Charge Lease of Water - - - - - - 0 Distribution Network Buildings Plan 682,963 891,932 1,173,086 580,558 427,238 612,898 4,368,675 Approval Fee Buildings Inspection 244,600 266,200 268,400 165,000 166,500 159,400 1,270,100 Fee Right-of-Way / Way- - - - - - - 0 Leave Fee (KPLN, Telkom, etc.) Consent to Charge 86,000 59,000 86,000 177,300 59,000 25,000 492,300 Fee/Property Certification Fee (Use as Collateral) Sign Boards & 1,176,583 993,320 538,700 597,200 530,672 428,500 4,264,975 Advertisement Fee Building occupation - - - - - - 0 Fees Building Permit - - - - - - 0 Plot Subdivision Fee 394,500 183,000 132,000 102,000 31,500 9,000 852,000 Fire-Fighting Services 191,500 236,500 213,000 110,000 144,000 128,000 1,023,000 Private borehole - 0 operators Quarry /mining - 0 charges-annual licence fee Tree cutting permits - 0 Water bowser/water - 0 vendor licences Tipping charges - 0 Use of public toilets - 0 Polluters of - 0 environment penalties TOTAL LOCAL 51,204,423 46,798,883 52,453,239 44,654,691 37,411,172 35,622,130 268,144,538 SOURCES Source: Department of Finance and Economic Planning 36 2015 Nyeri County Fiscal Strategy Paper