COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 COUNTY GOVERNMENT OF KWALE COUNTY TREASURY October 2024 ©County Budget Review and Outlook Paper (C – BROP) 2024 To obtain copies of the document, please contact: Budget & Economic Planning Division County Treasury County Government of Kwale P.O BOX 4 – 80403 KWALE, KENYA. Email: countytreasury@kwale.go.ke Website: www.kwalecountygov.com mailto:countytreasury@kwale.go.ke http://www.kwalecountygov.com/ COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page i FOREWORD The 2024 County Budget Review and Outlook Paper (C-BROP) has been prepared in accordance with the requirements of section 118 of the Public Finance Management Act 2012. This policy document reviews the county government’s fiscal performance for the financial year FY2023/24, assessing adherence to the principles of fiscal responsibility and the financial objectives contained in the Public Finance Management Act (PFMA) 2012. It also gives updates on the macroeconomic environment and fiscal projections for FY2025/26, including revenue and expenditure forecasts as well as provisional sector expenditure limits. This 2024 C-BROP is prepared amidst ongoing global uncertainties, marked by high but decreasing inflation pressures, sluggish global growth expectations, increased geopolitical tensions, particularly concerning the conflict in Ukraine and recently in the middle east, worries about financial stability in advanced economies, and heightened food insecurity due to climate- related changes. These challenges have caused negative effects to macro-economic environment in the domestic economy. The effects are manifested in high costs of essential household items, such as fuel and food, and a depreciation of the Kenyan Shilling, thus increasing the pressure on the cost of servicing the public debt. The National Government has initiated policy measures to counter these adverse shocks and has begun structural reforms under the Bottom Up Economic Transformation Agenda (BETA), as outlined in the Fourth Medium Term Plan. BETA aims to reduce the cost of living, eliminate hunger, create job opportunities, expand the tax base, and improve foreign exchange reserves and promote inclusive growth through a value chain approach. To achieve these goals, particular attention will be given to five key pillars with significant potential to drive and sustain economic recovery and enhance household welfare. These include:-Universal Health Care: Agricultural Transformation and Inclusive Growth; Micro, Small and Medium Enterprise (MSME) Economy; Housing and Settlement; and the Digital Superhighway and Creative Industry. The growth outlook for 2025 will be bolstered by the ongoing BETA interventions. To complement the efforts of the National Government under the BETA initiatives, the County Integrated Development Plan 2023-2027 has been aligned to the achievement of the national development priorities. The County Government has;-(i) invested heavily in Health to guarantee COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page ii the achievement of universal health coverage;(ii) empowered farmers through the provision of farm inputs including provision of fertilizers, certified seeds and seedlings and upscaling of micro irrigation to minimize the over-reliance on rain fed agriculture;(iii) initiated a youth and women empowerment programme through mobilization of women and youth into groups to form companies to secure county government tenders for supplies of goods and services and also works;(iv) fast tracking industrial growth through the construction of the Aggregated Industrial Parks in Mwananyamala, Dzombo ward Lungalunga sub county and the completion of fruit processing plant in Shimba hills Kubo South and (v) strengthened governance in public finance management so that wastage of resources is curtailed and allocative efficiency is guaranteed to ensure priority programmes are adequately funded. During the period under review, the county fiscal performance was satisfactory amidst the various challenges faced in budget implementation. On the revenue side, the county government received a total of Kshs 11.6 billion against the target of Kshs 14 billion implying 81 percent performance. This is a slight decline of about 4 percent in performance from the previous financial year 2022/2023 where performance was 85 percent. The actual revenue received was Ksh.10.1 billion against the target of Ksh 11 billion. The main reason for the decline in performance was due to the irregular release of funds from the National Government and non-receipt of most of the additional allocations, chief among them the unconditional grant on mining royalties amounting to Kshs 1.16 billion. These funds had been budgeted to finance key development projects in the FY 2023/2024. Performance of own source revenue improved from Kshs 392,952,872 collected in FY 2022/2023 to Kshs 427,380,000 in FY 2023/2024 thus an increment of about 8.8 percent. Under the expenditure front, the County Government spent Kshs 10.2 billion against the total budget of Kshs 14.3 billion implying 71.4 percent absorption. This is a decline from the 81 percent absorption achieved in the previous financial year 2022/2023.The reason for the decline was due to the late disbursement of funds and non-release of grants including the mining royalties which had been budgeted to undertake most of the development projects. Going forward, the County Government will implement a fiscal policy strategy to strengthen revenue collection through enforcement on the major revenue streams and enhancing automation for efficient tax administration. Challenges to achieve the targeted revenues are anticipated due to COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page iii the operationalization of the Facility Fund Improvement (FIF) programme in the health facilities. Revenues from Health Services have been one of the county government “cash cow” income. On the expenditure side, the County Government will strengthen governance in public finance management by curtailing the growth of recurrent expenditures and save resources to channel them to our development priorities. More specifically, the county government’s priority and transformative projects will be funded adequately to guarantee their completion for rapid socio economic transformation. This 2024 CBROP provides a basis for the revision of the medium term expenditure framework budget for financial year 2024/2025.The County Government completed the financial year 2023/2024 with huge pending bills and commitments which must be brought forward in the FY 2024/2025 budget. This will enable service providers to be paid and align the scarce resources to the County Government’s priorities. The FY 2024/2025 budget will be implemented under condition of uncertainties following disagreements on the Division of Revenue Bill and the enactment of the County Allocation of Revenue Bill. Disbursement of funds to counties is likely to be affected causing liquidity strain. The County Government will monitor these risks and institute mitigation measures to counter them. Hon. Bakari Sebe Executive Committee Member for Executive Services, Finance & Economic Planning COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page iv ACKNOWLEDGEMENT The preparation of the 2024 County Budget Review and Outlook Paper (CBROP) has been through the collaborative effort of a number of players. We would like to extend our heartfelt gratitude to all those who contributed to the successful production of this paper. First and foremost, we thank the County Executive Committee for their unwavering support and guidance throughout the budgeting process. We are particularly grateful to the department of Executive Services, Finance and Economic Planning for their expertise and diligent work in compiling the financial data and analysis presented in this paper. The information given is detailed and accurately presented. This has enhanced the credibility and soundness of this document. Special thanks also go to the various stakeholders, including community leaders, civil society organizations, and local businesses, who provided valuable insights and feedback during the consultations. The engagement has enriched the review process and ensured that our budget reflects the needs and aspirations of the people of Kwale County. We also acknowledge the contributions of our technical team led by Mr. Athuman Mwatunza, the Director Budget and Economic Planning, whose hard work and dedication made the preparation of this document possible. The team is committed to ensuring excellence in preparation of fiscal policy documents. The collective effort of the team is much appreciated. Finally, for those whom I might not have mentioned your invaluable inputs are also appreciated. CPA Alex Onduko Thomas, Chief Officer Finance, Executive Services and Economic Planning COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page v ABBREVIATIONS AND ACRONYMS ASDSP Agricultural Sector Development Support Programme BETA Bottom – Up Economic Transformation Agenda BER Budget Execution Rate BRIICS Brazil Russia India China and South Africa CADP County Annual Development Plan CARA County Allocation of Revenue Act CARB County Allocation of Revenue Bill CBK Central Bank of Kenya CBR Central Bank Rate CBROP County Budget Review and Outlook Paper CRF County Revenue Fund CFSP County Fiscal Strategy Paper CIDP County Integrated Development Plan COVID-19 Coronavirus disease of 2019 DANIDA Danish International Development Agency DoRA Division of Revenue Act DoRB Division of Revenue Bill EAC East African Community EMDEs Emerging Market and Developing Economies EU European Union EPZ Export Processing Zone FLLOCA Financing Locally Led Climate Action FY Financial Year COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page vi GBPS Gigabits Per Second GCP Gross County Product GDP Gross Domestic Product GVA Gross Value Added HR Human Resources ICT Information Communication Technology IMF International Monetary Fund KBRR Kenya Banks Reference Rate KNBS Kenya National Bureau of Statistics KUSP Kenya Urban Support Programme MPC Monetary Policy Committee MTEF Medium Term Expenditure Framework MTP Medium Term Plan M3 Money Supply NAVCDP National Value Chain Development Project NDA Net Domestic Assets NFA Net Foreign Assets OSR Own Source Revenue O&M Operations and Maintenance PFMA Public Finance Management Act PFMR Public Finance Management Regulations PWDs Persons with Disabilities SGR Standard Gauge Railway COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page vii SMSs Short Messaging Services UDG Urban Development Grant UIG Urban Institutional Grant VAT Value Added Tax WEO World Economic Outlook WSDP Water and Sanitation Development Project COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page viii LEGAL BASIS FOR THE PREPARATION OF THE COUNTY BUDGET REVIEW AND OUTLOOK PAPER Section 118 of the Public Finance Management Act, 2012 states that:- 1.The County Treasury shall prepare and submit to the County Executive Committee for approval, by 30th September in each financial year, a County Budget Review and Outlook Paper which shall include:- a) Actual fiscal performance in the previous financial year compared to budget appropriation for that year; b) Updated economic and financial forecasts with sufficient information to show changes from the forecasts in the most recent County Fiscal Strategy Paper c) Information on how actual financial performance for the previous financial year may have affected compliance with fiscal financial responsibility principles or the financial objectives in the latest County Fiscal Strategy Paper; d) The reasons for any deviation from the financial objectives together with proposals to address the deviation and the time estimated to do so. 2. County Executive Committee shall consider the County Budget Review and Outlook Paper with a view to approving it with or without amendments, not later than fourteen days after its submission. 3. Not later than seven days after the County Budget Review and Outlook Paper has been approved by the Executive Committee, the County Treasury shall:- a) arrange for the Paper to be laid before the County Assembly b) as soon as practicable after having done so, publish and publicize the Paper COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page ix EXECUTIVE SUMMARY The 2024 C – BROP has been prepared in line with the requirements of Section 118 of the PFM Act, 2012. This policy document reviews the county government’s financial performance for FY2023/24, assessing adherence to fiscal responsibility principles and the financial goals outlined in the PFM Act 2012. It also provides updates on the macroeconomic context and projections for FY2025/2026, including provisional sector ceilings. This report is prepared against a backdrop of ongoing global uncertainties, marked by elevated but declining inflationary pressures, a sluggish global growth outlook, intensified geopolitical tensions, especially regarding the conflict in Ukraine and recently in the middle east, worries about financial sector stability in developed economies, and rising food insecurity due to climate-related disruptions. Nevertheless, Kenya’s real Gross Domestic Product (GDP) expanded by 5.6 per cent in 2023 compared to a revised growth of 4.9 per cent in 2022. The positive growth was notable across most sectors of the economy. The Agriculture, Forestry and Fishing sector grew by 6.5 per cent in 2023, marking a recovery from the 1.5 per cent contraction recorded in 2022. This recovery was mostly attributed to favorable weather conditions that prevailed through most of the year. For the FY2023/24 budget, total actual revenues from all sources amounted to Kshs 11,619,777,017, compared to a target of Kshs. 14,259,668,763, achieving approximately 81.50 percent of the expected revenues. The equitable share of revenues totaled Kshs.7, 897,375,394. Revenue generated from county sources was Kshs 427,380,000 against a target of Ksh600 million, reflecting a performance rate of 71.23 percent. This marked an improvement from the previous financial year 2022/23, where Ksh393 million was collected against a target of Ksh454.28 million, resulting in 86.6 percent performance rate. Conditional grants received were Ksh1.197 billion against a budgeted amount of Ksh2.977 billion. The grant on Mining Royalties amounting to Ksh 1.16 Billion which was unconditional was not received. On the expenditure side, Ksh10.18 billion was utilized, indicating an absorption capacity of 71.0 percent of the total approved budget of Ksh14.26 billion. This represents a backdrop compared to the previous financial year FY2022/23, where the absorption rate was 81 percent. The County Government achieved absorption rates of 88 percent for recurrent expenditures and 50 percent for COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page x development expenditures. The decline in the absorption rate for development spending was due to delays in the disbursement of funds from the National treasury and the non-release of the mining royalties of Ksh 1.16Billion which had been earmarked to undertake development projects. The priority development projects which were dependent of the mining royalties could not be undertake. As a result the County Government has prepared a supplementary budget in the FY 2024/2025 to adequately fund the development priorities. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page xi Summary of Financial Performance Review Revenue performance Table 1: Revenue Performance Analysis Revenue source Target amount (Kshs.) Actual amount realized (Kshs.) Variance (Kshs.) Remarks* Equitable Share 8,584,103,693 7,897,375,394 686,728,299 Performance below target Conditional Grants- GoK 1,608,229,138 1,176,670,217 431,558,921 Grants suspended Conditional Grants- Devpt Partners 42,711,863 1,111,669 41,600,194 Partially funded Own Source Revenues 600,000,000 426,894,812 173,105,188 Performance below target TOTAL 10,835,044,694 9,502,052,092 1,332,992,602 Source: Kwale County Treasury Table 2: Expenditure Analysis Department (A) Approved Budget (Kshs.) - B Actual Expenditure (Kshs.) - C Absorption rate (%) =(C/B) *100 3061 Finance & Economic Planning 1,369,914,162 1,290,189,714 94.2 3062 Agriculture, Livestock and Fisheries 963,842,815 405,539,194 42.1 3063 Environment, Natural Resources and Urban Development 532,939,118 166,375,290 31.2 3064 Health 3,324,234,532 2,921,414,535 87.9 3065 County Assembly 1,091,212,566 900,935,286 82.6 3066 Trade, Enterprise Development and Cooperatives 347,768,096 212,468,822 61.1 3067 Social Services and Talent Management 372,790,521 225,074,675 60.4 3068 Executive Services 189,242,924 153,053,996 80.9 3069 Education 1,789,055,557 1,393,706,250 77.9 3070 Water Services 1,844,842,085 1,240,838,280 67.3 3071 Roads 1,013,041,481 448,345,126 44.3 3072 Tourism & ICT 171,636,516 78,315,252 45.6 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page xii Department (A) Approved Budget (Kshs.) - B Actual Expenditure (Kshs.) - C Absorption rate (%) =(C/B) *100 3073 County Public Service Board 75,581,290 56,732,087 75.1 3074 Public Service and Administration 445,969,456 307,106,655 68.9 3075 Kwale Municipality 116,131,653 78,752,741 67.8 3076 Diani Municipality 107,206,237 63,431,162 59.2 3077 Office of the County Attorney 70,163,600 46,333,781 66.0 3078 Lunga Lunga Municipality 54,500,000 14,627,771 26.8 3079 Kinango Municipality 50,000,000 23,965,705 47.9 3080 Preventive and Promotive Health Services 329,596,154 108,693,719 33.0 Total 14,259,668,763 10,135,900,041 71.1 Pending bills A summary of pending bills per department accumulated within the plan period is provided in the table below:- Table 3: Pending Bills by Vote DEPARTMENT RECURRENT DEVELOPMENT TOTAL 3061 Finance & Economic Planning 185,634,689 5,157,019 190,791,707 3062 Agriculture, Livestock and Fisheries 18,396,598 166,122,940 184,519,538 3063 Environment, Natural Resources and Urban Development 17,538,181 398,706,053 416,244,234 3064 Health 214,176,378 190,257,221 404,433,599 3065 County Assembly 114,392,700 186,873,297 301,265,997 3066 Trade, Enterprise Development and Cooperatives 13,524,533 141,510,671 155,035,204 3067 Social Services and Talent Management 29,070,695 112,713,166 141,783,861 3068 Executive Services 15,265,037 - 15,265,037 3069 Education 44,779,332 265,045,141 309,824,473 3070 Water Services 12,386,705 585,616,211 598,002,916 3071 Roads 25,315,015 378,197,723 403,512,738 3072 Tourism & ICT 45,250,647 40,250,844 85,501,491 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page xiii DEPARTMENT RECURRENT DEVELOPMENT TOTAL 3073 County Public Service Board 10,154,694 - 10,154,694 3074 Public Service and Administration 13,668,818 8,953,031 22,621,849 3075 Kwale Municipality 7,580,960 103,114,222 110,695,182 3076 Diani Municipality 5,407,680 29,781,066 35,188,746 3077 Office of the County Attorney 137,864,310 - 137,864,310 3078 Lunga Lunga Municipality 627,634 37,031,202 37,658,836 3079 Kinango Municipality 1,132,905 23,223,102 24,356,007 3080 Preventive and Promotive Health Services 1,000,000 121,250,734 122,250,734 TOTAL 913,167,511 2,793,803,643 3,706,971,153 Source: Kwale County Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page ix TABLE OF CONTENTS FOREWORD................................................................................................................................................ i ACKNOWLEDGEMENT ......................................................................................................................... iv ABBREVIATIONS AND ACRONYMS ................................................................................................... v LEGAL BASIS FOR THE PREPARATION OF THE COUNTY BUDGET .................................... viii REVIEW AND OUTLOOK PAPER ..................................................................................................... viii EXECUTIVE SUMMARY ....................................................................................................................... ix TABLE OF CONTENTS .......................................................................................................................... ix LIST OF FIGURES ................................................................................................................................... xi LIST OF TABLES ..................................................................................................................................... xi CHAPTER ONE: INTRODUCTION ....................................................................................................... 1 1.0 OVERVIEW ..................................................................................................................................... 1 1.1 OBJECTIVE OF THE 2024 COUNTY BUDGET REVIEW AND OUTLOOK PAPER ................................. 1 CHAPTER TWO: REVIEW OF COUNTY FISCAL PERFORMANCE FY2023/2024 ..................... 3 2.0 OVERVIEW ..................................................................................................................................... 3 2.1 REVENUE PERFORMANCE .............................................................................................................. 4 2.1.1 Details on Performance of Revenue by Category ................................................................. 8 2.2 EXPENDITURE PERFORMANCE AND ANALYSIS BY ECONOMIC CLASSIFICATION ........................ 11 2.2.1 Departmental Expenditure Performance ............................................................................. 14 2.2.2 Departmental Recurrent Expenditure Performance ............................................................ 28 2.2.3 Personnel Emoluments Expenditure Performance .............................................................. 31 2.2.4 Operations and Maintenance Expenditure Performance ..................................................... 33 2.3 DEVELOPMENT EXPENDITURE PERFORMANCE ............................................................................ 36 2.4 OVERALL BALANCE AND FINANCING .......................................................................................... 39 2.5 FISCAL PERFORMANCE FOR THE FY2023/2024 IN RELATION TO FINANCIAL OBJECTIVES ......... 40 2.6 COMPLIANCE WITH FISCAL RESPONSIBILITY PRINCIPLES ........................................................... 41 2.6.1 Development Expenditure ................................................................................................... 41 2.6.2 Recurrent Expenditure ........................................................................................................ 41 2.6.3 Personnel Emoluments ........................................................................................................ 41 2.6.4 Own Source Revenue .......................................................................................................... 41 CHAPTER THREE: RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK ...................... 42 3.0 Global Economic Scene…………………….….………………………………………………..…….42 3.1 Kenya's Economic Performance………...……………………………………………….……………43 3.2 Kwale County Economic Performance and Outlook…………………………….……………………45 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page x 3.2.1 Gross County Product ......................................................................................................... 45 3.2.2 Gross County Product Concept ........................................................................................... 45 3.2.3 Identity between GCPs and GDP: ....................................................................................... 46 3.2.4 Nominal Gross County Product .......................................................................................... 46 3.2.5 Gross County Product at Current Prices ............................................................................. 46 3.2.6 County Share of GCP .......................................................................................................... 46 3.2.7 Gross County Product Contribution by Broad Sectors of the Economy ............................. 47 CHAPTER FOUR: RESOURCE ALLOCATION FRAMEWORK ................................................... 52 4.1 FISCAL POLICY FOR FY 2025/26 AND MEDIUM TERM BUDGET .................................................. 53 4.1.1 Fiscal Projections ................................................................................................................ 54 4.1.2 Medium Term Fiscal Projections ........................................................................................ 56 4.1.3 FY2025/26 and the Medium-Term Expenditure Framework ............................................ 58 4.2 PUBLIC PARTICIPATION AND INVOLVEMENT OF STAKEHOLDERS ............................................... 59 CHAPTER FIVE: CONCLUSION AND NEXT STEPS ...................................................................... 60 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page xi LIST OF FIGURES Figure 1: Trend in Actual Total Revenue from FY2013/14 to FY2023/2024 .............................................. 7 Figure 2: Kwale County historical trends in own source revenue collection .............................................. 11 Figure 3: Summary of Expenditure by Economic Classification ................................................................ 14 Figure 4: Development Expenditure performance analysis and trends....................................................... 37 Figure 5: Annual Real GDP Growth Rates, percent ................................................................................... 45 Figure 6: Kwale County GCP Estimates 2018-2022 ................................................................................. 46 Figure 7: GCP by Economic Activity at Current Prices, Kshs Million, 2020- 2022 Kshs Million ............ 47 Figure 8: County Expenditure Framework FY 2025/26 ............................................................................. 56 Figure 9: Kwale County Revenue projection FY 2025/ 2026 ..................................................................... 57 LIST OF TABLES Table 1: Revenue Performance Analysis ..................................................................................................... xi Table 2: Expenditure Analysis ..................................................................................................................... xi Table 3: Pending Bills by Vote ................................................................................................................... xii Table 4: Revenue Performance for FY2023/2024 ........................................................................................ 5 Table 5: Comparison of Revenue Performance in FY2022/2023 and FY 2023/2024 .................................. 6 Table 6: Schedule of Equitable Share Disbursement FY2023/24 ................................................................. 8 Table 7: Grants Received for FY 2022/2023 ................................................................................................ 9 Table 8: Summary of Own Source Revenue Collection ............................................................................. 10 Table 9: Analysis of Own Source Revenue from FY 2013/2014- 2023/2024 ............................................ 11 Table 10: Summary of Expenditure by Economic Classification for FY 2023/2024 ................................. 13 Table 11: Summary of Expenditure by Economic Classification between FY 2022/2023 and FY 2023/2024 (Amount in Kshs Billion).......................................................................................................... 13 Table 12: Summary of Departmental Expenditure Performance FY2023/2024 ......................................... 15 Table 13: Analysis of Departmental Expenditure Performance FY2023/2024 .......................................... 16 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page xii Table 14: Summary of Expenditure by Vote between FY2022/2023 and FY2023/2024 ........................... 17 Table 15: Summary of Expenditure by Programmes and Sub Programmes ............................................... 18 Table 16: Summary of Total Recurrent Expenditure .................................................................................. 28 Table 17: Analysis of Recurrent Expenditure Performance FY2023/2024 ................................................ 30 Table 18: Summary of Departmental Expenditure Performance on Personal Emoluments ....................... 32 Table 19: Summary of Expenditures on Personnel Emoluments by Vote between FY 2022/2023 and FY 2023/2024 ................................................................................................................................................... 33 Table 20: Expenditure Performance on Operations and Maintenance FY2023/2024 ............................... 34 Table 21: Summary of Expenditures on Operations and Maintenance for FY2022/2023 and FY2023/2024 .................................................................................................................................................................... 35 Table 22: Summary of Departmental Development Expenditure Performance FY2023/2024 .................. 37 Table 23: Analysis of Departmental Development Performance FY2023/2024 ........................................ 38 Table 24: Summary of Development Expenditures By Vote from FY 202/2023 to FY 2023/2024 .......... 39 Table 25: Overall Fiscal balance and Financing FY2023/2024 .................................................................. 39 Table 26: Global Economic Performance ................................................................................................... 43 Table 27: County Shares, Kshs Million, 2020- 2022 ................................................................................. 46 Table 28: Provisional Expenditure Ceilings for the FY 2025/26 by Vote and Economic Classification ... 55 Table 29: Resource Envelope for MTEF Budget FY2022/2023 – 2024/2025 ........................................... 57 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 1 CHAPTER ONE: INTRODUCTION 1.0 Overview 1. The County Budget Review and Outlook Paper (CBROP) 2024 is the third to be developed under the new administration and is formulated pursuant to the provisions of the PFM 2012 and PFM (County Governments) Regulations 2015. This 2024 CBROP provides an assessment of the County fiscal performance for the fiscal year 2023/2024, possible deviations in revenue and expenditure and their implications for the MTEF period 2024/2025- 2026/2027. Information provided in this paper will strengthen public finance governance and assist citizens in understanding Kwale county public finances and their impact to their lives. 1.1 Objective of the 2024 County Budget Review and Outlook Paper 2. The CBROP 2024 aims to provide an assessment of the County's financial performance for the FY 2023/2024, as well as an analysis of how such results affect the County's financial objectives as outlined in the County Fiscal Strategy Paper (CFSP) 2024 and the County fiscal responsibility principles as espoused in the PFM Act 2012. This information, coupled with the updated economic outlook, serves as the basis for revising the FY 2024/2025 approved budget, as well as other fiscal information necessary to guide subsequent budget and the medium-term spending plan. 3. This CBROP 2024 has provided provisional sector expenditure ceilings for MTEF budget FY 2025/2026. The sector ceilings have been prepared on the basis of the medium-term macro-fiscal forecasts and estimated resource envelop shown in Section IV of this document. The CFSP 2025 will give more details about the fiscal framework, budget performance, medium-term projections, priorities, and sector ceilings. The sector ceilings will be firmed up once approved by the County Assembly in the CFSP 2025.The county government in developing the provisional sector ceilings has taken into consideration the crucial objective of adequately fund development priorities in the next MTEF period to foster rapid socio- economic transformation. 4. The CBROP 2024 further aims to entrench linkages between policy, planning and budgeting. The CBROP will provide insights into the mid- term review of the 3rd Generation County Integrated Development Plan (CIDP) 2023- 2027 and assist in evidence based decision making when finalizing the County Annual Development Plan (CADP) FY 2025/2026 and the CFSP 2025. The CBROP 2024 will further provide the preliminary linkage between national development planning policy under the Medium Term Plan (MTP) IV which is implementing the, COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 2 the Bottom Up Transformation Agenda (BETA) initiatives and the County Integrated Development Plan through the annual budget process. Performance Management can also use the findings in this CBROP 2024 to make better assessment and review and influence future decision making. 5. This CBROP 2024 has also incorporated information on fiscal performance of the recently established municipalities; Diani, Kwale, Lungalunga and Kinango. These are key county agencies which need proper planning and budgeting for results and aligning them to the county socio economic transformation agenda .This CBROP 2024 emphasizes increased funding to the municipalities to enhance infrastructural growth in roads, water and environmental management specifically waste management. 6. The CBROP 2024 further takes into consideration the observed recent economic developments and changes in the financial and economic environment with possible implications to the County fiscal outlook. The rejection of the National Government Finance Bill 2024 will impact on the generally cash liquidity and the transfers to county governments. Further the suspension of the Kwale County Finance Act 2024 will affect revenue collection and the anticipated increase in own source revenue through the revenue raising measures articulated in the bill. The County Government will monitor the situation and institute mitigation measures to counter the risks. 7. The CBROP 2024 has been categorized into four main sections: Section I introduces the paper, Section II reviews the fiscal performance in FY 2021/2022 fiscal performance, and compliance with the fiscal responsibility principles; the recent economic developments and fiscal outlook are illustrated in Section III ; Section IV gives detailed resource allocation framework with projected sector budget ceilings and Section V concludes the paper and gives the next steps. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 3 CHAPTER TWO: REVIEW OF COUNTY FISCAL PERFORMANCE FY2023/2024 2.0 Overview 8. This section provides details of the county’s fiscal performance for the period ending 30th June 2024. Further, it describes the county revenue and expenditure performance with regard to the financial year 2023 – 2024 budget execution. 9. The approved revised supplementary budget for the County Government of Kwale for the financial period 2023/2024 was Kshs. 14,259,668,763. Recurrent budget amounted to Kshs. 8,131,343,268 (57%) while Kshs. 6,128,325,495 (43%) was for development activities. Under the recurrent expenditure, personnel emoluments accounted for 28.03 percent of the total budget while operations and maintenance was 29 percent. 11. The budget execution for the FY2023/2024 period was quite satisfactory, though hampered by revenue shortfalls occasioned by delays in the disbursement of funds from the National Exchequer and underperformance in Own Source Revenue (OSR). Despite these challenges, however, the County Government received Kshs 11.6 Billion, out of which Kshs 7.9 Billion was equitable share, Kshs 2.1 Billion were balances brought forward from the previous financial period and Kshs 1.2 Billion from conditional grants and loans. The County Government, during this period collected Kshs 427.4 Million from own sources, representing an increment of 8.75 percent compared to Kshs 393 Million collected in the previous financial period 2022/2023. 12. The total expenditure for the period under review amounted to Kshs 10.2 Billion against a budget of Kshs 14.3 Billion. This represents an absorption capacity of 71.42 percent. Recurrent expenditure amounted to Kshs 7.12 Billion against a budget of Kshs 8.13 Billion implying an absorption rate of 87.6 percent. The below target expenditure on recurrent category is mainly attributed to below target expenditure under operations and maintenance. 13. Development expenditure in the same period amounted to Kshs 3.06 Billion against a budget of Kshs 6.13 Billion. This implies an absorption capacity of 49.95 percent. The below target COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 4 expenditure on development activities was on account of below target disbursements towards development projects as a result of the reasons highlighted in 8 above. 2.1 Revenue Performance 14. Global economic growth was projected at 3.2 percent in 2024 and 3.3 percent in 2025 from 3.3 percent in 2023. The outlook reflects economic recovery in China, Euro area, and UK, despite a slowdown in activity in the USA and Japan. On the domestic scene, the Kenyan economy is currently unwinding from the effects of negative and persistent global and domestic shocks that had pushed the economy to its lowest activity level. Kenya’s economic performance is projected to remain stable over the medium term. Growth is expected to moderate to 5.2 percent in 2024 and 5.4 percent in 2025 from 5.6 percent in 2023. 15. During the review period, total actual revenue amounted to Kshs 11,619,777,017, out of which Kshs.7,897,375,394 came from total equitable share disbursements, Kshs 1,196,690,337 from conditional grants and loans and Kshs 2,098,331,286 being balances brought forward from the previous financial year 2022/2023. The county raised Kshs 427,380,000 from its own sources during the same period. 16. The total transfers from the Exchequer amounting to Kshs 9.09 Billion including equitable share and conditional grants and loans accounted for 78.25 percent of the total funds received and 63.74 percent of the total targeted revenues in the financial period 2023/2024. This represents a decline from 89.60 percent of the total actual revenues received in 2022/2023. 17. Compared to the revenue performance in the previous financial year 2022/2023, there is a decline in the amount of equitable share received. In financial year 2022/2023, the County received Kshs 8,265,585,516 as equitable share of revenue which declined to Kshs 7,897,375,394 in FY2023/2024 implying a decline of about 4.45 percent. Conditional grants performance showed a significant increase from Kshs 819,028,729 received in FY2022/2023 to Kshs 1,196,690,337. In FY2022/2023, a 43 percent of the anticipated amount of conditional grants and loans were received while in FY2023/2024 the county received only 40 percent against a target of Kshs 2,977,233,783. Performance of the own source revenue collection improved from Kshs. 392,952,872 collected in FY2022/2023 to Kshs 427,380,000 in FY2023/2024 implying an increment of about 8.76 percent. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 5 Table 4: Revenue Performance for FY2023/2024 Source Annual CARA, 2023 Allocation- Kshs. Actual Funds received-Kshs. Variance Actual Receipts as a % of CARA Allocation Equitable Share of Revenue 8,584,103,693 7,897,375,394 - 92 County Own Source Revenue(Target) 600,000,000 427,380,000 61,323,249 71 Sub-Total 9,184,103,693 8,324,755,394 61,323,249 91 Conditional Allocations from National Government Provision of Fertilizer Subsidy Programme 90,011,220 - 90,011,220 - Allocation for Mining Royalties 1,166,507,886 - 1,166,507,886 - Sub-Total 1,256,519,106 - 1,256,519,106 - Conditional Allocation from Development Partners Loans & Grants DANIDA Grant to Supplement Financing of County Health facilities 14,206,500 14,206,500 - 100 World Bank Grant for Universal Health Care Project 22,171,888 - 22,171,888 - World Bank Loan for National Agricultural and Rural Inclusive Growth Project 38,900,000 4,261,826 34,638,174 11 National Agricultural Value Chain Development Project NAVCDP) 252,807,271 199,781,175 53,026,096 79 De risking and Value Enhancement (DRIVE) 63,341,980 - 63,341,980 - Kenya Marine Fisheries and Socio Economic Development (KEMFSED) 100,730,260 107,043,100.00 (6,312,840) 106 Agricultural Sector Development Support Programme-ASDSP 31,711,863 1,111,669 30,600,194 4 Kenya Informal Settlement Improvement Project KISIP II 112,211,667 112,211,667 - 100 World Bank Loan for Kenya Urban Support Program 33,395,288 - 33,395,288 - Urban Institutional Grant (UIG) 11,426,233 - 11,426,233 - Financing Locally-Led Climate Action (FLLoCA) 11,000,000 11,000,000 - 100 County Climate Change Resilient Investment (CCCRI) 117,811,727 117,811,728 (1) 100 EU-IDEAS Tranche III 11,000,000 - 11,000,000 - Water and Sanitation Development Project WSDP 900,000,000 629,262,672 270,737,328 70 Sub-Total 1,720,714,677 1,196,690,337 524,024,340 70 Total Grants 2,977,233,783 1,196,690,337 1,780,543,446 40 Income Brought Forward 2,098,331,286 2,098,331,286 - 100 Sub-Total 2,098,331,286 2,098,331,286 - 100 Grand Total 14,259,668,762 11,619,777,017 2,639,891,745 81 Source: Kwale county Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 6 Table 5: Comparison of Revenue Performance in FY2022/2023 and FY 2023/2024 Source Annual CARA, 2022 Allocation- Kshs. Actual Funds received-Kshs. Actual Receipts as a % of CARA Allocation Annual CARA, 2023 Allocation- Kshs. Actual Funds received-Kshs. Actual Receipts as a % of CARA Allocation Equitable Share of Revenue 8,265,585,516 8,265,585,516 100 8,584,103,693 7,897,375,394 92 County Own Source Revenue(Target) 454,276,121 392,952,872 87 600,000,000 427,380,000 71 Sub-Total 8,719,861,637 8,658,538,388 99 9,184,103,693 8,324,755,394 91 Conditional Allocations from National Government Compensation for User Fees Forgone 14,814,598 - - - - - Road Maintenance Levy 257,663,634 - - - - - Leasing of Medical Equipment 110,638,298 - - - - - Provision of Fertilizer Subsidy Programme - - - 90,011,220 - - Allocation for Mining Royalties - - - 1,166,507,886 - - Sub-Total 383,116,530 - - 1,256,519,106 - - Conditional Allocation from Development Partners Loans & Grants World Bank Grant on Kenya Devolution Support Programme 193,944,526 - - - - - DANIDA Grant to Supplement Financing of County Health facilities 58,772,074 15,203,746 26 14,206,500 14,206,500 100 World Bank Grant for Universal Health Care Project 22,171,888 - 22,171,888 - - World Bank Loan for National Agricultural and Rural Inclusive Growth Project 449,940,588 151,179,199 34 38,900,000 4,261,826 11 National Agricultural Value Chain Development Project NAVCDP) 70,000,000 67,192,729 96 252,807,271 199,781,175 79 De risking and Value Enhancement (DRIVE) - - - 63,341,980 - - Kenya Marine Fisheries and Socio Economic Development (KEMFSED) - - - 100,730,260 107,043,100 106 Agricultural Sector Development Support Programme-ASDSP 46,388,803 5,505,017 12 31,711,863 1,111,669 4 Kenya Informal Settlement Improvement Project KISIP II 50,000,000 - 112,211,667 112,211,667 100 Urban development Grant(UDG) 33,395,288 2,339,914 7 33,395,288 - - Urban Institutional Grant (UIG) 11,426,233 - 11,426,233 - - COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 7 Source Annual CARA, 2022 Allocation- Kshs. Actual Funds received-Kshs. Actual Receipts as a % of CARA Allocation Annual CARA, 2023 Allocation- Kshs. Actual Funds received-Kshs. Actual Receipts as a % of CARA Allocation Financing Locally-Led Climate Action (FLLoCA) 22,000,000 22,000,000 100 11,000,000 11,000,000 100 County Climate Change Resilient Investment (CCCRI) - - - 117,811,727 117,811,727 100 EU-IDEAS Tranche III 14,726,052 10,187,986 69 11,000,000 - - COVID - 19 Grant 3,778,038 - - - - - Water and Sanitation Development Project WSDP 550,000,000 545,420,138 99 900,000,000 629,262,672 70 Sub-Total 1,526,543,490 819,028,729 54 1,720,714,677 1,196,690,336 70 Total Grants 1,909,660,020 819,028,729 43 2,977,233,783 1,196,690,336 40 Income Brought Forward 1,299,888,249 661,246,842 - 2,098,331,286 2,098,331,286 100 Sub-Total 1,299,888,249 661,246,842 - 2,098,331,286 2,098,331,286 100 Grand Total 11,929,409,906 10,138,813,959 84.8 14,259,668,762 11,619,777,016 81 Source: Kwale County Treasury 18. Figure 1 below represents trends in the actual funds received from 2013/2014 to 2023/2024. It shows a steady increase in revenue from Kshs 3.4 Billion in 2013/2014 to about Kshs 11.6 Billion in 2023/2024. The highest amount of funds were received in FY2020/2021 of about Kshs 11.78 Billion. Figure 1: Trend in Actual Total Revenue from FY2013/14 to FY2023/2024 Source: Kwale County Treasury 0 2 4 6 8 10 12 3.4 5.24 5.59 6.12 9.04 10.6 11.52 11.78 10.2 10.1 11.62 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 8 2.1.1 Details on Performance of Revenue by Category 2.1.1.1 Performance of Equitable Share 19. The County recorded a decline in the actual transfers from the National Government allocation of the equitable share. During the 2023/2024 financial period under review Kshs. 7,897,375,394 was received compared to Kshs. 8,265,585,516 received in the previous period FY2022/2023 representing a 4.45 percent decline. Further, delays in the disbursement of funds from the exchequer continue to be the main challenge in the budget execution. For instance, in this period, a total of Kshs 2.92 Billion was disbursed in the fourth quarter of the period under review. This explains the increasing amount of pending bills recorded by the county government. Table 6: Schedule of Equitable Share Disbursement FY2023/24 Period Amount Received Date Received Funds Transfer No. Percent of Quarterly receipts to Approved Allocation First Quarter 729,648,814 28-Jul-23 FT23209XFNYH 686,728,295 25-Sep-23 FT23268CRFG0 1,416,377,109 16.5 Second Quarter 729,648,814 15-Nov-23 FT233197FDP8 686,728,295 20-Dec-23 FT23354YBH38 1,416,377,109 16.5 Third Quarter 729,648,814 25-Jan-24 FT240258F1GS 686,728,295 20-Feb-24 FT2405194NHV 729,648,813 27-Mar-24 FT240870JPX9 2,146,025,922 25.0 Fourth Quarter 729,648,813 24-Apr-24 FT24115PNBDR 686,728,295 23-May-24 FT241449MT2Z 772,569,332 20-Jun-24 FT2417268PTD 729,648,814 26-Jun-24 FT241786PD4L 2,918,595,254 34.0 8,584,103,693 7,897,375,394 92.0 Source: Kwale County Treasury 20. From the information above, 16.5, 16.5, and 25.0 percent of the funds from the exchequer was disbursed during the first quarter, the second, and the third quarter consecutively. The highest disbursement (34.0 percent) was recorded in the fourth quarter. This explains the slow pace in absorption capacities for development funds recorded in the same period. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 9 2.1.1.2 Performance of Conditional Grants 21. According to the table below, the County Government received, from conditional grants and loans a total of Kshs 1,196,690,337 against a target of Kshs 2,977,233,783 in the approved revised budget for FY2023/2024. This represented 40.0 percent of the total amount of conditional grants anticipated. This implies an improvement of 46.1 percent in the disbursement of conditional grants and loans compared to the previous period FY2022/2023. Table 7: Grants Received for FY 2022/2023 Amount Received Date Received Activity Period Funds Transfer Number 34,246,211 21-Aug-23 KEMFSED Quarter 1 500,000 6-Oct-23 ASDSP Quarter 2 FT23279VMYRS 33,383,100 13-Feb-24 KEMFSED Quarter 3 611,669 13-Mar-24 ASDSP FT24073HDW0R 34,413,789 19-Mar-24 KEMFSED 414,432,672 21-Mar-24 WSDP GRANT FT24081MHVM6 30,000,000 27-Mar-24 KISIP GRANT FT24087LVQH0 58,905,864 28-May-24 FLLOCA/CCCR Quarter 4 FT24149BN075 4,261,826 30-May-24 NARIGP FT24151GTWWG 195,079,224 30-May-24 NAVCDP FT24151SY21Z 14,206,500 21-Jun-24 DANIDA FT24173C2S3R 4,701,951 25-Jun-24 NAVCDP FT24177PCM16 58,905,864 25-Jun-24 FLLOCA/CCCR FT24177XMVWJ 82,211,667 26-Jun-24 KISIP II GRANT FT24178W5C21 214,830,000 28-Jun-24 WSDP FT24180DC0MP 11,000,000.00 5-Jul-24 FLLOCA FT24187SXKQF 5,000,000.00 12-Jul-24 KEMFSED 1,196,690,337 Source: Kwale County Treasury 2.1.1.3 Performance of Own Source Revenue(OSR) 22. During the review period, the County Government of Kwale posted a total OSR collection of Kshs 427,377,928 against an annual target of Kshs 600,000,000. This represents a 71.23 percent performance in local revenue collection. This reflects a reduction in performance compared to a 86.5 percent collection posted in the previous financial period. The major revenue streams for the county during the financial year 2023/2024 were hospital fees, business permits, Land Rates, Cess fees and Advertising fees respectively. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 10 Table 8: Summary of Own Source Revenue Collection Revenue Stream Approved Revised Target Actual Funds Collected Variance Percentage Collection Cess 30,909,700 31,589,841 680,141 102 Land Rate 65,000,000 48,093,410 -16,906,590 74 Single/Business Permits 68,495,500 71,435,872 2,940,372 104 Property Rent 7,141,000 5,019,733 -2,121,267 70 Parking Fees 20,227,800 19,262,700 -965,100 95 Market Fees 12,403,500 9,157,265 -3,246,235 74 Advertising 19,759,300 31,970,905 12,211,605 162 Hospital Fees 265,754,800 162,817,761 -102,937,039 61 Public Health Service Fees 8,461,800 7,134,070 -1,327,730 84 Physical Planning and Development 38,472,850 7,776,174 -30,696,676 20 Hire Of County Assets 960,000 1,000,000 40,000 104 Conservancy Administration 3,740,000 4,441,050 701,050 119 Administration Control Fees and Charges 51,041,750 11,176,550 -39,865,200 22 Other Fines, Penalties, And Forfeiture Fees 112,600 137,075 24,475 122 Miscellaneous Receipts 7,519,400 16,365,522 8,846,122 218 Total County Own Source Revenue 600,000,000 427,377,928 172,622,072 71 Source: Kwale County Treasury 23. Historical trends of own source revenue collection shows remarkable improvement over the past financial years. This affirms the county’s enormous potential in own source revenue collection. The county government ought to streamline the revenue raising measures to realize its full potential. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 11 Table 9: Analysis of Own Source Revenue from FY 2013/2014- 2023/2024 Financial Year Approved Revised Budget (Kshs Million) Actual Receipt (Kshs Million) Percentage Collected 2013/2014 370 203 54.86 2014/2015 500 253 50.60 2015/2016 300 249 83.00 2016/2017 261 221 84.67 2017/2018 275 226 82.18 2018/2019 303 315 103.96 2019/2020 325 254 78.15 2020/2021 365 250 68.49 2021/2022 438 302 68.95 2022/2023 454 393 86.56 2023/2024 600 427 71.17 TOTAL 4,191 3,093 73.80 Source: Kwale County Treasury Figure 2: Kwale County historical trends in own source revenue collection Source: Kwale County Treasury 2.2 Expenditure Performance and Analysis by Economic Classification 24. During the FY2023/2024 review period, total expenditure amounted to Kshs. 10,183,806,876 against a revised target of Kshs.14, 259,668,763. This translates to an absorption rate of 71.42 percent and an under performance of Kshs.4.1 Billion (29%).This under performance is on 0 100 200 300 400 500 600 A m o u n t (K sh s. M ill io n ) Financial Year Target (Kshs Million) Actual (Ksh Million) COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 12 account of irregular disbursement of funds from the national exchequer .The mining royalties amounting to Kshs 1.16 billion which had been budgeted to undertake most of the development was not received. This resulted in lower absorption rates especially in development expenditures by the various county government departments. Compared to FY FY2022/2023, the FY 2023/2024 performance shows a decline in the absorption rate. In FY 2022/2023 ,the county government posted an absorption rate of 81 percent and an under performance of Kshs.2.2 Billion (19%).The total expenditure in FY 2022/2023 was Kshs.9, 708,906,748 against a revised target of Kshs.11, 929,409,906. 25. Recurrent expenditure amounted to Kshs. 7,122,716,219 (including payments of commitments from previous financial year) against a revised target of Kshs. 8, 131,343,268. This represents an 88 percent absorption against the revised target. The underperformance of Kshs 1,008,627,049 (12.4 percent) can be partly accounted for by the shortfall recorded in the OSR collection during the same period. In the same period in FY 2022/2023, recurrent expenditure amounted to Kshs.6, 758,715,082 (including payments of commitments from previous financial year) against a revised target of Kshs.7, 061,200,490 implying a funds utilization rate of 95.72 percent out of the total budget allocation and an under performance of shs.302, 485,408 .This shows there was a decline in recurrent expenditure from an absorption rate of 95.7 percent in FY 2022/2023 to 88 percent in FY 2023/2024. 26. On the other hand, development expenditure during the same period stood at 49.95 percent translating to Kshs 3,061,090,657 against an approved target of Kshs. 6,128,325,495. The county had allocated 42.98 percent of the approved revised budget to development expenditure. Delayed disbursement from the national exchequer, the non-disbursement of the mining royalties of Ksh 1.16 billion and slow tendering processes account for the underperformance during this period. Development expenditure during the same period in FY 202/2023 recorded an absorption rate of 61 percent with Kshs.2, 950,191,667 being the total actual expenditure against the target of Kshs.4, 868,209,416. This shows a decline in development expenditure between FY 202/2023 and FY 2023/2024. COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 13 Table 10: Summary of Expenditure by Economic Classification for FY 2023/2024 Expenditure Classification FY2023/2024 % Absorption % Total Expendit ure Approved Revised Estimates Actual Expenditure Current Expenditure 8,131,343,268 7,122,716,219 88 70 Compensation to Employees 3,997,188,297 3,805,359,785 95 37 Use of Goods and Services 4,134,154,971 3,317,356,434 80 33 Capital Expenditure 6,128,325,495 3,061,090,657 50 30 Other Development 6,128,325,495 3,061,090,657 50 30 Total Expenditure 14,259,668,763 10,183,806,876 71 100 Source: Kwale County Treasury 27. The table below give a comparison of the expenditures by Economic Classification between FY 2022/23 and FY 2023/2024. Table 11: Summary of Expenditure by Economic Classification between FY 2022/2023 and FY 2023/2024 (Amount in Kshs Billion) Expenditure Classification FY 2022/2023 FY 2023/2024 FY 2022/2023 FY 2023/2024 FY 2022/2023 FY 2023/2024 Approved Estimates Approved Estimates Actual Expenditure Actual Expenditure % Absorption % Absorption Current Expenditure 7.1 8.1 6.8 7.1 96 88 Compensation to Employees 3.4 4.0 3.2 3.8 95 95 Use of Goods and Services 3.7 4.1 3.6 3.3 96 80 Capital Expenditure 4.9 6.1 2.9 3.1 61 50 Other Development 4.9 6.1 2.9 3.1 61 50 Total Expenditure 11.9 14.3 9.7 10.2 81 71 Source: Kwale County Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 14 28. The above information can be summarized using a graph as shown below. Figure 3: Summary of Expenditure by Economic Classification Source: Kwale County Treasury 2.2.1 Departmental Expenditure Performance 29. During the period under review, the department of Finance and Economic Planning poeted the highest absorption rate at 95 percent, followed by the department of Curative Health Services and the County Executive Services at 86 percent and 81 percent respectively. Departments that recorded the lowest absorption capacities were the Lunga Lunga Municipality, Preventive and Promotive Health Services, and Roads and Public Works at 27 percent, 33 percent, 44 percent and 46 percent respectively. 30. However, in absolute terms, the department of Curative and Rehabilitative Health Services recorded the highest expenditures at 28.1 percent followed by the department of Education and Finance and Economic Planning at 13.7 percent and 12.7 percent respectively. Lowest expenditures were recorded by Lunga Lunga Municipality, Kinango Municipality and the County Attorney at 0.14 percent, 0.24 percent and 0.5 percent respectively. - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Compensation to Employees Use of Goods and Services Capital Development A m o u n t (M ill io n ) Expenditure Category Approved Revised Estimates Actual Expenditure COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 15 Table 12: Summary of Departmental Expenditure Performance FY2023/2024 Vote Department Departmental Expenditure Revised Estimates Actual Expenditure Absorption Capacity (%) % of Total Expenditure 3061 Finance and Economic Planning 1,369,914,162 1,297,650,413 95 12.7 3062 Agriculture, Livestock & Fisheries 963,842,815 445,681,621 46 4.4 3063 Environmental & Natural Resources 532,939,118 286,687,151 54 2.8 3064 Curative Health Services 3,324,234,532 2,863,177,967 86 28.1 3065 County Assembly 1,091,212,566 791,119,187 72 7.8 3066 Trade & Cooperative Services 347,768,096 212,468,822 61 2.1 3067 Social Services & Talent Management 372,790,521 225,477,081 60 2.2 3068 County Executive 189,242,924 153,053,995 81 1.5 3069 Education 1,789,055,557 1,391,173,478 78 13.7 3070 Water Services 1,844,842,085 1,240,003,803 67 12.2 3071 Roads & Public Works 1,013,041,481 448,809,802 44 4.4 3072 Tourism & ICT 171,636,516 78,315,253 46 0.8 3073 County Public Service Board 75,581,290 56,395,726 75 0.6 3074 Public Service & Administration 445,969,456 358,492,727 80 3.5 3075 Kwale Municipality 116,131,653 77,781,892 67 0.8 3076 Diani Municipality 107,206,237 63,434,905 59 0.6 3077 County Attorney 70,163,600 46,699,858 67 0.5 3078 LungaLunga Municipality 54,500,000 14,627,771 27 0.14 3079 Kinango Municipality 50,000,000 23,965,705 48 0.24 3080 Preventive Health Services 329,596,154 108,789,719 33 1.1 TOTAL 14,259,668,763 10,183,806,876 71.42 Source: Kwale County Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 16 31. The table shows further analysis on the departmental expenditure per economic classification for the FY 2023/2024 budget. Table 13: Analysis of Departmental Expenditure Performance FY2023/2024 Source: Kwale County Treasury Target Actual Target Actual Target Actual 3061 Finance and Economic Planning 1,341,534,162 1,277,650,413 95 28,380,000 20,000,000 70 1,369,914,162 1,297,650,413 95 3062 Agriculture, Livestock & Fisheries 201,844,242 162,657,155 81 761,998,573 283,024,466 37 963,842,815 445,681,621 46 3063 Environmental & Natural Resources 98,806,813 79,430,953 80 434,132,305 207,256,198 48 532,939,118 286,687,151 54 3064 Curative Health Services 2,924,355,960 2,689,473,303 92 399,878,572 173,704,664 43 3,324,234,532 2,863,177,967 86 3065 County Assembly 794,128,805 691,451,080 87 297,083,761 99,668,107 34 1,091,212,566 791,119,187 72 3066 Trade & Cooperative Services 91,032,455 58,087,452 64 256,735,641 154,381,370 60 347,768,096 212,468,822 61 3067 Social Services & Talent Management 138,874,196 112,394,052 81 233,916,325 113,083,029 48 372,790,521 225,477,081 60 3068 County Executive 177,402,438 153,053,995 86 11,840,486 - - 189,242,924 153,053,995 81 3069 Education 1,272,780,375 1,154,269,396 91 516,275,182 236,904,082 46 1,789,055,557 1,391,173,478 78 3070 Water Services 139,739,365 107,202,976 77 1,705,102,720 1,132,800,827 66 1,844,842,085 1,240,003,803 67 3071 Roads & Public Works 165,009,365 110,244,363 67 848,032,116 338,565,439 40 1,013,041,481 448,809,802 44 3072 Tourism & ICT 91,991,526 38,759,629 42 79,644,990 39,555,624 50 171,636,516 78,315,253 46 3073 County Public Service Board 75,581,290 56,395,726 75 - - - 75,581,290 56,395,726 75 3074 Public Service & Administration 404,039,467 325,705,769 81 41,929,989 32,786,958 78 445,969,456 358,492,727 80 3075 Kwale Municipality 14,357,105 5,184,037 36 101,774,548 72,597,855 71 116,131,653 77,781,892 67 3076 Diani Municipality 28,104,000 16,450,618 59 79,102,237 46,984,287 59 107,206,237 63,434,905 59 3077 County Attorney 70,163,600 46,699,858 67 - - - 70,163,600 46,699,858 67 3078 LungaLunga Municipality 3,898,788 1,151,870 30 50,601,212 13,475,901 27 54,500,000 14,627,771 27 3079 Kinango Municipality 3,100,000 1,588,983 51 46,900,000 22,376,722 48 50,000,000 23,965,705 48 3080 Preventive Health Services 94,599,316 34,864,591 37 234,996,838 73,925,128 31 329,596,154 108,789,719 33 8,131,343,268 7,122,716,219 88 6,128,325,495 3,061,090,657 50 14,259,668,763 10,183,806,876 71 BER Development Expenditure BER Total Expenditure BER Vote Department TOTAL Recurrent Expenditure COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 17 32. The table below give a comparison of the expenditures by Vote between FY 2022/23 and FY2023/2024 Table 14: Summary of Expenditure by Vote between FY2022/2023 and FY2023/2024 Vote Department FY 2023/2024 FY 2022/2023 Revised Estimates Actual Expenditure Absorption (%) Revised Estimates Actual Expenditure Absorption (%) 3061 Finance and Economic Planning 1,369,914,162 1,297,650,413 95 1,420,106,906 1,351,733,342 95.2 3062 Agriculture, Livestock & Fisheries 963,842,815 445,681,621 46 928,018,430 527,492,040 56.8 3063 Environmental & Natural Resources 532,939,118 286,687,151 54 252,876,970 134,812,372 53.3 3064 Curative Health Services 3,324,234,532 2,863,177,967 86 3,180,034,409 2,808,840,087 88.3 3065 County Assembly 1,091,212,566 791,119,187 72 1,169,141,072 1,052,141,280 90 3066 Trade & Cooperative Services 347,768,096 212,468,822 61 227,340,256 160,441,562 70.6 3067 Social Services & Talent Management 372,790,521 225,477,081 60 240,179,227 172,613,941 71.9 3068 County Executive 189,242,924 153,053,995 81 219,939,785 191,709,488 87.2 3069 Education 1,789,055,557 1,391,173,478 78 1,712,956,322 1,467,167,520 85.7 3070 Water Services 1,844,842,085 1,240,003,803 67 1,251,989,779 968,882,649 77.4 3071 Roads & Public Works 1,013,041,481 448,809,802 44 731,295,572 417,922,446 57.1 3072 Tourism & ICT 171,636,516 78,315,253 46 107,499,048 72,570,027 67.5 3073 County Public Service Board 75,581,290 56,395,726 75 52,691,541 45,122,149 85.6 3074 Public Service & Administration 445,969,456 358,492,727 80 314,985,135 306,842,461 97.4 3075 Kwale Municipality 116,131,653 77,781,892 67 79,699,428 27,755,753 34.8 3076 Diani Municipality 107,206,237 63,434,905 59 40,656,028 2,859,630 7 3077 County Attorney 70,163,600 46,699,858 67 3078 Lunga Lunga Municipality 54,500,000 14,627,771 27 3079 Kinango Municipality 50,000,000 23,965,705 48 3080 Preventive Health Services 329,596,154 108,789,719 33 TOTAL 14,259,668,763 10,183,806,876 71.42 11,929,409,906 9,708,906,748 81.4 Source: Kwale County Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 18 Table 15: Summary of Expenditure by Programmes and Sub Programmes Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) Vote:3061-Kwale - Finance and Economic Planning 703003061 703023060 - Budget formulation, coordination and management 210,702,925 211,875,834 (1,172,909) 101 - - - 704003061 704013060 - Audit Services 264,607,391 264,505,097 102,294 100 - - - 704043060 - General Administration 675,743,172 628,640,913 47,102,259 93 28,380,000 20,000,000 8,380,000 70 710003061 710013060 - Revenue Collection Management 130,643,833 119,572,434 11,071,399 92 - - - 711003061 711023060 - Procurement Services 14,080,000 14,069,588 10,412 100 - - - 711033060 - Risk Assurance Services 19,965,000 14,154,163 5,810,837 71 - - - 711013060 - Public Finance and Accounting Services 25,791,841 24,832,385 959,456 96 - - - Total 1,341,534,162 1,277,650,413 63,883,749 95 28,380,000 20,000,000 8,380,000 70 Vote:3062-Kwale - Agriculture, Livestock and Fisheries 102003062 102063060 - Personnel Services 156,172,416 142,372,094 13,800,322 91 - - - 102053060 - General administration and support services 13,334,830 6,695,540 6,639,290 50 332,947,092 62,061,107 270,885,985 19 107003062 107033060 - Farm Land Utilization, Mechanization and Crop Storage 20,286,996 5,225,292 15,061,704 26 25,980,573 20,958,578 5,021,995 81 107013060 - Crop Production and Food Security 3,130,000 3,649,757 (519,757) 117 281,578,393 121,659,742 159,918,651 43 107023060 - Agricultural 650,000 330,000 320,000 51 4,999,225 - 4,999,225 - COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 19 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) extension, Research and Training 108003062 108033060 - Livestock Disease Control 4,630,000 600,834 4,029,166 13 67,692,125 15,720,908 51,971,218 23 108013060 - Dairy and Meat Production 1,620,000 1,793,189 (173,189) 111 - - - 108023060 - Value Addition of Livestock and Livestock Products - 980,500 (980,500) - 24,355,000 14,938,750 9,416,250 61 109003062 109023060 - Value Addition and Marketing - - - - 24,446,165 7,897,454 16,548,711 32 109013060 - Fish production Management 2,020,000 1,009,949 1,010,051 50 - 39,787,927 (39,787,927) 0 Total 201,844,242 162,657,155 39,187,087 81 761,998,573 283,024,466 478,974,107 37 Vote:3063-Kwale - Land, Environment, Mining and Natural Resources 102003063 102063060 - Personnel Services 49,055,744 45,941,055 3,114,689 94 - - - 0 102053060 - General administration and support services 30,754,169 23,405,759 7,348,410 76 179,120,365 50,501,204 128,619,161 28 104003063 104013060 - Physical development plans - 2,500,133 (2,500,133) - 10,000,000 1,331,276 8,668,724 13 105013060 - Establishment of squatter settlement schemes 10,500,000 3,625,300 6,874,700 35 44,973,500 15,611,990 29,361,510 35 106003063 106033060 - Rehabilitation of degraded natural landscapes - 540,090 (540,090) - - - - - COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 20 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) 106023060 - County Environmental Awareness Initiative 8,496,900 3,418,616 5,078,284 40 200,038,440 139,811,728 60,226,712 70 Total 98,806,813 79,430,953 19,375,860 80 434,132,305 207,256,198 226,876,107 48 Vote:3064-Kwale – Curative and Rehabilitative Health Services 402023060 - Operational Rural Health Facilities - - - - 11,000,000 - 11,000,000 - 402043060 - Medical Health Drugs 531,665,374 542,485,582 (10,820,208) 102 - - - - 403013060 - General Administration 147,559,388 94,222,918 53,336,470 64 292,553,572 137,666,905 154,886,667 47 403053060 - Personnel Services 2,032,406,939 1,894,294,796 138,112,143 93 - - - - 405003064 405013060 - Msambweni hospital 92,990,000 63,781,347 29,208,653 69 55,325,000 13,435,380 41,889,620 24 406003064 406013060 - Kinango Hospital 35,961,700 28,733,777 7,227,924 80 9,700,000 9,492,560 207,440 98 407003064 407013060 - Kwale Hospital 41,095,000 32,673,440 8,421,560 80 11,300,000 5,175,821 6,124,179 46 408003064 408013060 - Tiwi Rural Health Facility - - - - - - - - 409003064 409013060 - Samburu Hospital 22,121,500 16,270,739 5,850,761 74 11,000,000 3,433,998 7,566,002 31 410003064 410013060 - Lunga Lunga Hospital 20,556,059 17,010,703 3,545,356 83 9,000,000 4,500,000 4,500,000 50 Total 2,924,355,960 2,689,473,303 234,882,657 92 399,878,572 173,704,664 226,173,908 43 Vote:3065-Kwale - County Assembly 704003065 704013060 - Audit Services 293,276,232 223,709,257 69,566,975 76 - - - 0 704043060 - General Administration 303,111,536 280,691,508 22,420,028 93 186,550,939 99,668,107 86,882,832 53 705003065 705013060 - Oversight and legislation of county affairs 197,741,037 187,050,315 10,690,722 95 110,532,822 - 110,532,822 0 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 21 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) Total 794,128,805 691,451,080 102,677,725 87 297,083,761 99,668,107 197,415,654 34 Vote:3066-Kwale - Industry, Trade and Investments 301043060 - Enforcement of Weights & Measures Act 2,750,077 1,442,863 1,307,214 52 3,000,000 3,000,000 - 100 301013060 - Building capacity of traders for better market access 5,289,500 1,902,380 3,387,120 36 3,000,000 - 3,000,000 0 302003066 302023060 - Investment publicity and promotion 5,962,000 1,755,768 4,206,232 29 - - - 0 305003066 305023060 - Administration Services 29,666,563 11,024,084 18,642,479 37 84,436,108 63,750,694 20,685,415 76 305013060 - Personnel Services 41,583,708 39,767,432 1,816,276 96 - - - 0 306003066 306013060 - Rehabilitation of Existing Markets 3,892,000 1,509,015 2,382,985 39 - - - 0 306023060 - Construction of New Markets - - - - 51,006,113 26,364,530 24,641,583 52 307003066 307013060 - Investment Promotion Services 1,888,607 685,910 1,202,697 36 115,293,420 61,266,146 54,027,274 53 Total 91,032,455 58,087,452 32,945,003 64 256,735,641 154,381,370 102,354,271 60 Vote:3067-Kwale - Community Development, Youth and Women Empowerment and Social Services 903003067 903023060 - Community development 10,045,739 7,570,245 2,475,494 75 - - - 903003067 903013060 - Social services 18,525,000 15,624,362 2,900,639 84 - - - 903003067 903033060 - Drug and substance abuse management 3,500,000 3,430,390 69,610 98 - - - COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 22 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) 903003067 904013060 - Protection and promotion of positive culture and heritage 15,500,000 12,654,865 2,845,135 82 4,129,200 - 4,129,200 0 903003067 905013060 - Youth sporting talent search and development 27,300,000 17,978,350 9,321,650 66 - - - 903003067 905023060 - Sports development program - - - - 170,243,525 78,676,773 91,566,752 46 906003067 906023060 - Administration Services 23,696,992 15,644,632 8,052,360 66 59,543,600 34,406,256 25,137,344 58 906003067 906013060 - Personnel Services 40,306,465 39,491,208 815,257 98 - - - Total 138,874,196 112,394,052 26,480,144 81 233,916,325 113,083,029 120,833,296 48 Vote:3068-Kwale - Office of the Governor and the Deputy Governor 702003068 702013060 - County Coordination Services 7,330,000 3,691,565 3,638,435 50 - - - 0 702003068 704043060 - General Administration 82,490,490 67,111,728 15,378,762 81 11,840,486 - 11,840,486 0 702003068 704013060 - Audit Services 78,809,427 74,899,672 3,909,755 95 - - - 0 702003068 707033060 - Media and Communication Services 8,772,521 7,351,030 1,421,491 84 - - - 0 Total 177,402,438 153,053,995 24,348,443 86 11,840,486 - 11,840,486 0 Vote:3069-Kwale - Education 501043060 - Infrastructure Development - - - - 208,026,165 77,393,312 130,632,853 37 501013060 - Early childhood and development 63,654,884 25,654,270 38,000,614 40 - - - - 502003069 502013060 - Administration 49,906,680 24,697,828 25,208,852 49 222,360,702 123,493,012 98,867,690 56 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 23 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) Planning and support services 502023060 - Personnel Services 640,808,811 592,299,931 48,508,880 92 - - - - 503003069 503023060 - Infrastructure Development - - - - 85,888,315 36,017,758 49,870,557 42 503013060 - Administration 12,200,000 5,407,368 6,792,632 44 - - - - 504003069 504013060 - Scholarship and Bursary 506,210,000 506,210,000 - 100 - - - - Total 1,272,780,375 1,154,269,396 118,510,979 91 516,275,182 236,904,082 279,371,100 46 Vote:3070-Kwale - Water and Urban Planning and Decentralized Units 1001003070 1001033060 - Development of Borehole water supply systems - - - - 149,154,025 66,136,547 83,017,478 44 1001003070 1001063060 - Community Water Project - - - - 35,920,000 27,831,628 8,088,372 77 1001003070 1001023060 - Construction and maintenance of water pipeline supply systems - - - - 135,690,375 61,586,850 74,103,525 45 1001003070 1001043060 - Development/Constru ction of Surface water supply systems - - - - 176,126,975 64,815,733 111,311,243 37 1001003070 1002023060 - Administration Services 90,508,372 62,463,610 28,044,762 69 1,208,211,34 5 912,430,069 295,781,276 76 1001003070 1002013060 - Personnel Services 49,230,993 44,739,366 4,491,627 91 - - - 0 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 24 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) Total 139,739,365 107,202,976 32,536,389 77 1,705,102,720 1,132,800,827 572,301,893 66 Vote:3071-Kwale - Infrastructure and Public Works 202003071 202013060 - Rehabilitation of Roads, Drainage and Bridges - - - - 486,369,099 121,521,761 364,847,338 25 203003071 203013060 - Installation of Street Lighting Facilities - - - - 61,229,981 27,687,362 33,542,619 45 305003071 305013060 - Personnel Services 68,742,682 61,161,507 7,581,175 89 - - - - 305023060 - Administration Services 96,266,683 49,082,856 47,183,827 51 300,433,036 189,356,317 111,076,719 63 Total 165,009,365 110,244,363 54,765,002 67 848,032,116 338,565,439 509,466,677 40 Vote:3072-Kwale - ICT and Tourism 304003072 304013060 - Tourism promotion 5,732,749 2,856,835 2,875,914 50 18,457,802 10,816,232 7,641,570 59 305003072 305023060 - Administration Services 51,097,227 6,544,302 44,552,925 13 54,205,374 23,773,385 30,431,989 44 305003072 305013060 - Personnel Services 27,400,616 25,344,487 2,056,129 92 - - - 0 305003072 308013060 - Local Area Network Installation/ICT Support 7,760,934 4,014,006 3,746,928 52 6,981,814 4,966,006 2,015,808 71 Total 91,991,526 38,759,629 53,231,897 42 79,644,990 39,555,624 40,089,366 50 Vote:3073-Kwale - County Public Service Board 706003073 706063060 - Staff Rationalization 6,570,000 5,382,010 1,187,990 82 - - - 0 706003073 706053060 - Human Resource Planning 3,320,000 1,940,260 1,379,740 58 - - - 0 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 25 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) 706003073 706043060 - Compensation to employees 31,996,290 28,855,185 3,141,105 90 - - - 0 706003073 706013060 - Human Resource Planning 23,845,000 13,020,172 10,824,828 55 - - - 0 706003073 706023060 - Transformation of service delivery in the public service 9,850,000 7,198,100 2,651,900 73 - - - 0 Total 75,581,290 56,395,726 19,185,564 75 - - - 0 Vote:3074-Kwale- Public Service and Administration 704003074 704043060 - General Administration 135,744,173 74,887,634 60,856,539 55 41,929,989 32,786,958 9,143,031 78 704013060 - Personnel Services 224,040,583 214,189,012 9,851,571 96 - - - 0 708003074 708033060 - County compliance and enforcement 6,605,000 1,865,172 4,739,828 28 - - - 0 712003074 712013060 - Sub County Admin Msambweni 6,556,000 6,092,500 463,500 93 - - - 0 712003074 712023060 - Sub County Admin Lunga Lunga 6,935,600 6,367,052 568,548 92 - - - 0 712003074 712033060 - Sub County Admin Matuga 5,651,000 8,206,600 (2,555,600) 145 - - - 0 712003074 712043060 - Sub County Admin Kinango 8,441,747 5,786,797 2,654,950 69 - - - 0 713003074 713013060 - County garbage and Cleaning Services 4,045,364 6,570,575 (2,525,211) 162 - - - 0 714003074 714013060 - General Administration Livest ock Development 6,020,000 1,740,427 4,279,573 29 - - - 0 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 26 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) Total 404,039,467 325,705,769 78,333,698 81 41,929,989 32,786,958 9,143,031 78 Vote:3075-Municipality of Kwale 102053060 - General administration and support services 14,357,105 5,184,037 9,173,068 36 - - - 0 111013060 - Kwale Municipality - - - - 101,774,548 72,597,855 29,176,693 71 Total 14,357,105 5,184,037 9,173,068 36 101,774,548 72,597,855 29,176,693 71 Vote:3076-Municipality of Diani 102003076 102053060 - General administration and support services 28,104,000 16,450,618 11,653,382 59 - - - 0 112003076 112013060 - Diani Municipality - - - - 79,102,237 46,984,287 32,117,950 59 Total 28,104,000 16,450,618 11,653,382 59 79,102,237 46,984,287 32,117,950 59 Vote:3077-Kwale - County Attorney 0 - Default - Non Programmatic - 46,700 (46,700) - - - - 0 704043060 - General Administration 70,163,600 46,653,158 23,510,442 66 - - - 0 Total 70,163,600 46,699,858 23,463,742 67 - - - 0 Vote:3078-Kwale - Lungalunga Municipality 102003078 102053060 - General administration and support services 3,898,788 1,151,870 2,746,918 30 50,601,212 13,475,901 37,125,311 27 Total 3,898,788 1,151,870 2,746,918 30 50,601,212 13,475,901 37,125,311 27 Vote:3079-Kwale - Kinango Municipality 102003079 102053060 - General administration and support services 3,100,000 1,588,983 1,511,017 51 46,900,000 22,376,722 24,523,278 48 Total 3,100,000 1,588,983 1,511,017 51 46,900,000 22,376,722 24,523,278 48 Vote:3080-Kwale - Preventive Health Services 401003080 401033060 - TB/HIV/ Malaria 5,605,000 - 5,605,000 - - - - 0 COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 27 Programme Sub-Programme Recurrent Actual Variance BER (%) Development Actual Variance BER (%) 401003080 401043060 - Neglected tropical diseases 1,000,000 - 1,000,000 - - - - 0 401003080 401063060 - Healthcare Waste Management 4,803,000 - 4,803,000 - - - - 0 401003080 401013060 - Community health strategy 2,100,000 - 2,100,000 - - - - 0 401003080 401053060 - Public health Hygiene 5,839,657 1,199,700 4,639,957 21 - - - 0 401003080 401073060 - Epidermics Control 1,000,000 - 1,000,000 - - - - 0 403003080 403013060 - General Administration - - - - 77,385,608 38,508,200 38,877,408 50 408003080 408013060 - Tiwi Rural Health Facility 9,074,000 950,000 8,124,000 10 10,000,000 7,646,772 2,353,228 76 412003080 412013060 - Rural Health Facilies 62,665,167 32,487,771 30,177,396 52 147,611,230 27,770,156 119,841,074 19 413003080 413013060 - Diani Health Centre 2,512,492 227,120 2,285,372 9 - - - 0 Total 94,599,316 34,864,591 59,734,725 37 234,996,838 73,925,128 161,071,710 31 GRAND TOTAL 8,131,343,268 7,122,716,219 1,008,627,049 88 6,128,325,495 3,061,090,658 3,067,234,838 50 Source: Kwale County Treasury COUNTY BUDGET REVIEW AND OUTLOOK PAPER, 2024 Kwale County Treasury, 2024 Page 28 2.2.2 Departmental Recurrent Expenditure Performance 33. During the FY2023/2024 review period, the County Government had an approved revised recurrent budget of Kshs 8,131,343,268 comprising of 57.02 percent of the total approved revised budget for the same period. The actual recurrent expenditure during this period stood at Kshs 7,122,716,219 implying an absorption capacity of 87.60 percent. This indicates an underperformance of 12.40 percent mainly on account of delays in disbursement of equitable share from national treasury and shortfall in the own source revenue collection. In the same period in FY 2022/2023, recurrent expenditure amounted to Kshs.6, 758,715,0