REPUBLIC OF KENYA COUNTY GOVERNMENT OF NYERI DEPARTMENT OF FINANCE AND ECONOMIC PLANNING THE COUNTY TREASURY COUNTY FISCAL STRATEGY PAPER 2016 SUSTAINING ECONOMIC PROSPERITY FOR ALL THE PEOPLE OF NYERI FEBRUARY, 2016 Foreword One of the key stages in the county budget preparation cycle is the production of the County Fiscal Strategy Paper (CFSP). It sets out the county policy goals and strategic priorities that will be the basis for formulation of the County’s Financial Year 2016/17 budget and the Medium Term projections. This is an annual planning document that shows the various fiscal strategies that the County Government of Nyeri intends to employ to meet its overall objective of improving the livelihoods of its citizens. The County priorities and goals outlined herein are based on the County Integrated Development Plan as enunciated in the 2016/2017 Annual Development Plan with emphasis on investment in: roads and infrastructure, accessibility of water for domestic and irrigation purposes, accessible health care, education, promoting investor and business confidence necessary to encourage investment, growth and employment creation. These priorities shall form the basis for formulation of FY 2016/17 budget and the Medium Term. The paper therefore links county planning and policies to Budget which is the main objective of the Medium Term Expenditure Framework. As a build-up on the County Budget Review and Outlook Paper (CBROP) 2015, which analyzed the performance in the FY 2014/2015 financial year’s budget, scanned the current year’s fiscal environment and provided an outlook for the FY 2016/2017 and the medium term, this CFSP shows the allocation of resources in all sectors and departments. The main sources of county revenue, in the medium term, will be the equitable share, conditional grants, local revenue collections and donor funding. In the FY 2016/17 and the medium term, the County Government proposes a series of measures to increase revenue and balance its fiscal spending. The County will focus on strengthening the potential it is endowed with to stimulate economic growth and development. This paper, therefore, puts into perspective how the County anticipates to expend its scarce resources in the FY 2016/17 and the medium term. The paper covers the following broad areas; highlights of the recent economic developments and the economic outlook; broad strategic priorities and policies ii for the Medium Term and the Medium Term Fiscal Framework. The fiscal framework presented in the paper ensures a sustainable financing while allowing continued spending on priority programmes. Achievement of the set objectives calls for greater transparency, effectiveness and efficiency in public financial management in order to ensure fiscal discipline. DR. CHARLES GITHUA GITHINJI, PhD, C.E.C.M - FINANCE AND ECONOMIC PLANNING. iii Acknowledgement A lot of effort and dedication have been spent to ensure the County Fiscal Strategy Paper (CFSP), 2016 is prepared and submitted on time, as required under the PFM Act, 2012. Lots of efforts have been dedicated to the timely preparation of this CFSP, without which, actualization of this MTEF budgeting policy document would not have been possible. 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 as we move towards sustaining economic prosperity for all the people of Nyeri Special thanks go to the office of the County Secretary, all the Chief Officers, County Directors and various county officials especially from the department of Public Administration, Information and Communication who dedicated their valuable time to ensure the success of the public participation forums held, in all the wards, to collect information for the preparation of the CFSP, 2016. Special appreciation goes to the preparation coordinating team that worked tirelessly throughout to transform raw data gathered from public participation forums and county departments to this refined document As it is the responsibility of County Treasury to ensure timely submission of the CFSP a team from the departments of Finance and Economic Planning spent valuable time to put together this strategy paper. These officers included the Chief Officer for Finance and Accounting, Richard Kimani. Other included Lucy Kirigo, Gibson Mwangi and Chris Gathogo While as it is 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 FRANCIS MARANGA KIRIRA CHIEF OFFICER - ECONOMIC PLANNING iv List of Abbreviations BPS Budget Policy Statement CBR Central Bank Rate CBROP County Budget Review and Outlook Paper CFSP County Fiscal Strategy Paper CIDP County Integrated Development Plan CRA Commission on Revenue Allocation ECDE Early Childhood Development Education ESP Economic Stimulus Programme FIF Facility Improvement Fund FY Financial Year ICT Information and Communication Technology IFAD International Fund for Agricultural Development IFMIS Integrated Financial Management Information System IMF International Monetary Fund KTBH Kenya-Top-Bar-Hive MTEF Medium Term Expenditure Framework NHIF National Hospital Insurance Fund PFM Public Finance Management TOL Temporary Occupation License USD United States Dollar v TABLE OF CONTENTS Foreword………. ................................................................................................... ii List of Abbreviations ............................................................................................. v Acknowledgement ................................................................................................ iv I SUSTAINING ECONOMIC PROSPERITY FOR ALL THE PEOPLE OF NYERI…….. ......................................................................................................... 1 Overview……….. .................................................................................................. 1 Programmes for sustaining economic prosperity for all the people of Nyeri ........ 2 Prioritizing Development ....................................................................................... 2 Outline of the 2016 County Fiscal Strategy Paper ................................................. 3 II RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK ..................... 4 Overview of Recent Economic Performance ......................................................... 4 Fiscal performance and emerging challenges ........................................................ 9 2015/16 Budget ...................................................................................................... 9 III FISCAL AND BUDGET FRAMEWORK .................................................... 11 Overview……. ..................................................................................................... 11 Observing fiscal responsibility principles ............................................................ 11 Fiscal structural reforms ...................................................................................... 12 2014/15 Budget Framework ................................................................................ 12 Revenue Projections ............................................................................................. 12 Overall Deficit Financing .................................................................................... 14 Summary…….. .................................................................................................... 15 IV DEPARTMENTAL ALLOCATION OF RESOURCES .............................. 16 Introduction………. ............................................................................................. 16 Departmental Budgeting ...................................................................................... 16 Resources available .............................................................................................. 17 Allocation of Revenue among Departments ........................................................ 17 vi Supplementary Budget Estimates for FY 2015/16 .............................................. 18 Fiscal Discipline ................................................................................................... 19 Equity in Allocation of Resources ....................................................................... 20 Capacity Building of County Departments .......................................................... 20 Resource Envelope ............................................................................................... 21 Spending Priorities ............................................................................................... 21 2015/16 Expenditure Estimates ........................................................................... 22 Medium-Term Expenditure Estimates ................................................................. 23 Baseline ceilings .................................................................................................. 23 V CONCLUSION .............................................................................................. 25 ANNEX I: REVENUE COLLECTED IN THE FIRST 6 MONTHS OF THE FY 2015/2016 .. 26 ANNEX: II SOURCES OF BUDGET FUNDING IN FY 2016/17 ...................................... 28 ANNEX III: WARD PRIORITIES AS CAPTURED DURING THE PUBLIC PARTICIPATION FORUMS……………. .............................................................................................. 29 Table 1: Crop production trends and value ........................................................................ 6 Table 2: Livestock Production ............................................................................................ 6 Table 3: Roads Surface ....................................................................................................... 7 Table 4: Cumulative Budget Out-turn, July – December 2015 ........................................ 10 Table 5: Approved Budget Allocations by County Departments and Units, July 2015 – June 2016 .......................................................................................................................... 18 Table 6: Supplementary Budget Allocations by Departments and Spending Units. ........ 18 Table 7: Projected Budget Allocations FY 2016-2017..................................................... 23 vii 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. viii 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. ix I SUSTAINING ECONOMIC PROSPERITY FOR ALL THE PEOPLE OF NYERI Overview 1. The 2016 Nyeri County Fiscal Strategy Paper is the third to be prepared under the devolved governance structures and continues the implementation of far reaching economic policies and structural reforms for economic prosperity in line with the national Budget Policy Statement (BPS), 2016. The policies are implemented around economic transformation agenda that includes; (i) creating a conducive business environment for job creation; (ii) investing in sectoral transformation to ensure broad based and sustainable economic growth with a major focus on agricultural transformation to ensure farmers get better returns for their produce; (iii) investing in infrastructure in areas such as roads, energy and water; (iv) investing in quality and accessible health care services and quality vocational education as well as strengthening the social safety net to reduce the burden on households and promote shared prosperity. 2. The implementation of the transformative agenda is expected to raise efficiency and productivity in the economy thereby sustaining inclusive growth. This will create opportunities for productive jobs in Nyeri County. This CFSP, therefore, reiterates the ongoing County’s priority programmes and structural reform measures to be implemented over the Medium Term. 3. The national development trends, together with renewed investors’ 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, and 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. 4. Despite the national macro-economic performance remaining strong in the face of headwinds from the global economic slowdown, the county is still experiencing development challenges which may derail the overall growth and development. 1 Nyeri County Fiscal Strategy Paper, 2016 Continued consumption of second generation brews, inadequate and high cost of energy, inappropriate agricultural practices, undeveloped and poorly maintained road network and numerous litigations on the revenue administration laws continue to be the key obstacles to sustainable development in the county. In addition, the high and unsustainable recurrent expenditure, weak budget implementation and fiscal related challenges surrounding devolution, continue to constrain the county economy from achieving its full potential. 5. The country’s economy grew by 5.3 percent in 2014 and is projected to rise to 5.6 percent in 2015, 6.0 percent in 2016 and 6.5 percent over the medium term. This robust economic growth is supported by continued investment in infrastructure, construction, mining, lower energy prices and improved agriculture following improved rains. Inflation is expected to remain within target over the medium term. Interest rates are expected to remain low and stable and exchange rates competitive. Programmes for sustaining economic prosperity for all the people of Nyeri 6. The programmes to be funded in the FY 2016/17 Budget as outlined in this County Fiscal Strategy Paper rides on the priorities outlined in the County Integrated Development Plan 2013-2018. 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 2016/17 budget, the major funding areas will be guided by the projects identified through a public participation process. Prioritizing Development 7. In the Fiscal Year 2016/17, the County Government will continue receiving support from the National Government so as to improve on service delivery as envisaged in the constitution. In addition, the County Treasury will continue to ensure prudent utilisation of financial resources as outlined in the Public Finance Management Act, 2012 and its attendant regulations. Continuous training of staff on emerging issues relating to financial management will be prioritised. 2 Nyeri County Fiscal Strategy Paper, 2016 Structural Reforms 8. The strategies in this paper are aligned to efforts towards reforming own-revenue administration in order to raise more resources to finance budget programmes while deepening private and public sector development to spur economic growth and development. 9. In the 2016 County Fiscal Strategy Paper, the key structural reforms on economic policies and sectoral spending will focus on establishing good governance, cost reduction and optimal utilization of resources. 10. It will also continue capacity building on e-procurement and Internet-banking, to simplify budget preparation, implementation, monitoring and reporting. This will immensely reduce the challenges faced in administration of programme based budget. Outline of the 2016 County Fiscal Strategy Paper Recent Economic Developments and Outlook 11. The next section (II) outlines the economic context in which the 2016/17 budget is prepared. It provides an overview of the recent economic developments. Fiscal and Budget Framework 12. 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 13. Section IV provides a framework for the proposed allocation of resources between county departments. County Budget Framework 14. Section V presents the resource envelope and spending priorities for the proposed 2016/17 Budget and the Medium Term Expenditure Framework. Departmental achievements and priorities are also reviewed for the FY 2015/16. 15. Section VI provides conclusions. 3 Nyeri County Fiscal Strategy Paper, 2016 II RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK Overview of Recent Economic Performance 16. Kenya’s economic growth has been robust supported by significant infrastructure investments, construction, mining, and lower energy prices and improvement in agriculture following improved weather. The economy grew by 5.3 percent in 2014 and is projected to grow at 5.6 percent in 2015, 6.0 percent in 2016 and 6.5 percent in the medium term. 17. Macroeconomic stability has been preserved with inflation remaining on average within target. Overall month on month inflation was at 8.0 percent in December 2015 from 6.0 percent in December 2014. This was attributed to the increase in prices of several food items which outweighed the decreases in oil prices as well as an increase in the Alcoholic Beverages, Tobacco & Narcotics index. 18. The Kenya Shilling exchange rate has stabilized following increased foreign exchange inflows in the money market. The current level of foreign exchange reserves, backstopped by the precautionary program with the IMF, continues to provide an adequate cushion against exogenous shocks. Furthermore, the current account deficit narrowed, mainly due to a lower oil import bill, and a slowdown in consumer imports. 19. Short term interest rates have declined following improved monetary conditions that led to increased liquidity in the money market. The interbank rate was at 6.2 percent as of 21st January 2016 while the 91 day Treasury bill rate was 11.4 percent as of 22nd January 2016. Growth Update 20. The economy grew by 5.3 percent in 2014 supported by strong performance in most sectors of the economy which offset the contraction in the tourism sector. Kenya’s economic growth remained resilient in 2015. The first three quarters of 2015 recorded an 4 Nyeri County Fiscal Strategy Paper, 2016 average of 5.5 percent growth compared to 5.3 percent growth in a similar period in 2014. Inflation within target 21. Overall month on month inflation was at 8.0 percent in December 2015 from 7.3 percent in November 2015. On average, the annual inflation rate was 6.5 percent in December 2015 compared to 6.9 percent in December 2014 and was therefore, within the current allowable margin of 2.5 percent on either side of the target of 5.0 percent. Interest rates 22. Liquidity conditions remained tight between September and October 2015, with short- term interest rates remaining above the Central Bank Rate (CBR) and the rates on treasury bills rising substantially. This tight liquidity situation improved beginning November, 2015 resulting in reduction in all the money market interest rates. The Kenya shilling Exchange Rate 23. The Kenya Shilling exchange rate which had weakened against major international currencies, for most of the year strengthened following foreign exchange inflows into the money market. The currency stabilized at Ksh 102.2 against the US dollar as of 21st January 2016 compared to Ksh 102.8 in October 2015. The depreciation of the currency was mainly due to the global strengthening of the USD on the international market, and high dollar demand by importers in the domestic market Agriculture 24. The county economy is mainly agricultural and there is significant increase in crop production which can be attributed to better prices and favourable weather as indicated in the tables below: 5 Nyeri County Fiscal Strategy Paper, 2016 Table 1: Crop production trends and value 2012 2013 2014 2015 Crop Production Value Production Value Production Value Production Value Bags Kshs. Metric Kshs. Metric Tons Kshs. Tons Kshs. Tons Tea 62.9 3,486,000,000 178000 4,592,400,000 166,969 3,400,000,000 86,100 3,920,000,000 Coffee 36 183.8 2,042,000,000 43,000 2,400,000,000 27,000 1,506,976,744 32,000 3,100,000,000 Maize 36,170 43,404,000 276,362 414,543,000 416,,020 1,367,790,000 Beans 11,102 27,550,000 17,893.90 71,575,600 88,363 544,851,000 Wheat 4,683.50 9,367,000 85,590 248,211,000 Banana 16,296 212,296,000 15938 236,803,424 21,028 312,431,937 Cabbages 96.99 359,640,000 42903 666,270,000 44384 714,348,000 74,418 1,197,732,892 Irish Potatoes 2586.6 1,767,347,800 87427.5 1,181,794,330 91964 1,568,441,000 101,054 1,723,468,951 French Beans 901.7 41,358,500 804.75 36,163,500 Tomatoes 244.08 235,045,700 3165.62 109,460,000 3720 124,083,500 7,822 260,919,022 Bulb Onions 1085.3 54,630,500 1271.8 62,170,000 5,403 264,116,425 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 3,083 44,872,482 Passion fruit 484.3 18,399,000 476.2 17,601,000 564 20,839,386 Carrots 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 2,283 125,572,673 Tree tomato 474.6 21,593,043 851 40,231,500 855 40,439,271 Mangoes 449.3 13,295,000 475 15,169,000 513 16,376,143 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 130.96 22,416,972 134 0 Spinach 178 0 2,494 49,735,604 Tuberose 0.08 0 Ornis 0.2 0 Morbydick 1.1 0 Totals 158,898 9,954,186,721 166,690.31 9,502,953,128 292,272,517 13,237,356,786 Source: Department of Agriculture, Livestock, Fisheries and Cooperatives Development 25. The main cash crops in the county are tea, coffee, maize, cabbages, Irish potatoes and wheat. Coffee, tea, maize, cabbages and Irish potatoes production levels for 2015 are absolutely high as compared to the previous year due to favourable climate. However in the long run tea production is on the decline. 26. The table below shows the county’s livestock production for the period between 2012 and 2015. Table 2: Livestock Production 2013 2014 2015 Livestock Production Value Production Value Production Value Metric tons Kshs. Metric tons Kshs. Kshs. Cattle slaughtered 914,080 Kgs 367,281,400 Dairy Cattle 163400 MT 4,166,700,000 172,000 MT 4,380,000,000 118,652,204 3,647,785,394 litres 6 Nyeri County Fiscal Strategy Paper, 2016 Exotic 163,400,000 litres 4,166,700,000 73,244,308 2,145,953,164 0 0 of milk Crosses 8,600,000litres of 213,300,000 0 0 milk Poultry 263,890,000 173196520 Indigenous 96,300 trays 28,890,000 127,638 36,813,950 2554430 eggs 84,988,000 Chicken Layers 700,000 trays 210,000,000 473,415 115,936,330 5417,228 eggs 53,458,595 Broilers 100,000Kg 25,000,000 115,576 20,446,240 83849 kgs 15,975,600 Shoats 113726590 Dairy Goats Sale of 1708 19,780,000 2655580 litres 134,651,450 goats Meat Goats 137,236 kg meat 40,799,890 128,730 43,571,770 180412 kgs 67,156,850 Hair sheep 165,600kg meat 52,969,700 243,003 85,395,650 605474 kgs 149,798,550 Wool sheep 22,500 kg wool 450,000 55275 kgs 24,873,750 Rabbits 52,500 kg meat 51,200,000 33380 7,872,050 13610 kgs 4,328,000 Beekeeping 103,199,800 54,546,380 24120 kgs 10,171,000 Log Hive 1,876 kg honey 1,031,800 756 155,780 1026 kgs 565,680 KTBH 112,582 kg honey 61,920,100 15,100 12,094,600 2420 kgs 1,157,600 Lang stroth 73,178 kg honey 40,247,900 - - 636 kgs 370,080 Pigs 310,000 kg meat 93,000,000 214870 42,296,000 97808 kgs 95,307,276 Fish 12,000 14,000 Source: Department of Agriculture, Livestock, Fisheries and Cooperative Development 27. Livestock production has recorded a significant increase in indigenous chicken, dairy goats, meat goats, hair sheep, log hive and the pigs. Among the major losers in production include; layers, log hive, lang stroth and Kenya to Bar Hive (KTBH). Infrastructure 28. Improvement of infrastructure mainly roads remains a key focus area for the county and will continue to be given high priority. The table below shows the Kilometres of roads by road surface. Table 3: Length of Road Surface by Type. Category of road service 2013 2014 2015 Bitumen 450 450 450 Gravel/murram 1390.59 1,554.39 1,794.39 Earth 1252.14 1,088.34 848.34 Total 3,092.73 3,092.73 3,092.73 Source: Department of Lands and Infrastructure Development, Nyeri County 29. In the year 2014, the county gravelled 163.8 Km of roads while 240 Km was gravelled in 2015. This has greatly improved both access and feeder roads across the county where 7 Nyeri County Fiscal Strategy Paper, 2016 farmers are able to easily reach the markets and move their goods across and outside the county. Energy 30. The county has also continued to facilitate provision of adequate lighting along streets, towns and estates in major urban areas of the county through installation of high mast flood lights and street lighting. Health 31. The County 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. The renal and cancer centres are now operational at the County Referral Hospital and 265 community health units have been formed and trained to address the challenges of non- communicable disease which remains a burden to the county. Education and ICT 32. The County Government installed free internet connection at Whispers Park to enable the public to create link between education and employment driven by knowledge and technology. The County is also in the process of supporting eight polytechnics making them centres of excellence. Trade, Tourism and Industry 33. The County government is in the process of renovating markets across the county to provide favourable working environment for the fresh produce traders. It has also established a county Enterprise Development Fund to support entrepreneurs with affordable loans to spur economic growth. 8 Nyeri County Fiscal Strategy Paper, 2016 Special programmes 34. The county government is embarking on social protection measures to cushion the vulnerable within the society. This is through programmes such as “BIMA Mashinani” that provides NHIF cover to the elderly; and provision of sanitary pads for girls and underwears for boys in class eight across the county. Fiscal performance and emerging challenges 2015/16 Budget 35. The County Assembly approved the FY 2015/16 budget with expenditures amounting to Kshs. 6,284,210,040. The budget comprises of Kshs 4,286,753,693 for recurrent and Kshs 1,997,456,347 for development expenditure. These expenditures are expected to be financed by the locally collected revenue and the allocation from the equitable share and donors as shown below; No. Source Amount in Kshs. 1 Equitable Share 4,341,891,811 2 Conditional Grants and donor funds in health and roads sectors 453,960,093 3 Internally Generated Revenue 1,493,358,136 Total 6,284,210,040 Implementation progress and emerging fiscal challenges 36. As at end of December 2015, cumulative revenue receipts amounted to Kshs. 272,485,959 (Including the Facility Implementation Fund from level 4 and 5 Hospitals) against a target of Kshs. 746,679,068 based on our annual projection of Kshs. 1,493,358,136 in the approved budget, thus reflecting an under performance of Kshs. 474,192,109 9 Nyeri County Fiscal Strategy Paper, 2016 Table 4: Cumulative Budget Out-turn, July – December 2015 Performance July – Dec 2014 Performance July – Dec 2015 Target Achieved Deviation Target Achieved Deviation % change between 2014/15 and 2015/16 Total revenue 671,983,402 268,144,538 -60.1% 746,679,068 272,485,959 -63.5% +1.62 collected Total Expenditure 1,904,557,527 869,347,199 - Recurrent 54.4% 2,143,376,846.50 1,705,114,610 79.45% +96.14 - Development 817,693,330 537,733,489 34.2% 998,728,173.50 147,194,451 14.7% -72.63 Source: Department of Finance and Economic Planning 37. Revenue collected during the first half of the FY 2015/16 was Kshs 272,485,959 as compared to Kshs 268,144,538 received for the same period in the FY 2014/15. This represents a dismal increase of 1.62%. On the expenditure side, recurrent expenditure for the first half FY 2015/16 increased by 96.14 as compared to the spending in the same period in FY 2014/15. However the expenditure on development reduced by 72.63% for the same period. The dismal performance in development was instigated by the time taken by the county treasury to fulfil the requirements by the Controller of Budget particularly on the established funds. 38. The major sources of local revenue remains as hospital services, parking fees, single business permits and land rates. It is important to note that there is a great deviation between the projected revenue and the actual performance for the period under review. This has necessitated downward review of the revenue targets as reflected in the supplementary budget estimates for the FY 2015/2016. 10 Nyeri County Fiscal Strategy Paper, 2016 III FISCAL AND BUDGET FRAMEWORK Overview 39. The 2016 County Fiscal Strategy Paper emphasizes on:  Consolidation of various departmental fiscal needs while making sure that the resource basket in the county is adequate to promote and sustain growth. The County Government is committed to strengthening cost reduction measures in order to devote more resources to development.  Continued reforms in expenditure management, implementation and enforcement of the Revenue Administration Act, 2014 and subsequent amendments through Finance Act, 2015 will be enhanced. This will widen the revenue base by identifying new revenue streams and hence increasing the spending space.  Efficiency to improve expenditure productivity by ensuring that sufficient resources are available for the key operations cutting across all sectors in the county. Observing fiscal responsibility principles 40. 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 from 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. 41. In an attempt to ensure that development is not crowded out, the County Government will ensure adherence to development to recurrent expenditure ratio of at least 30:70, over the medium term, as set out in the PFM Act, 2012. The highest standards of fiscal rules will be observed to entrench fiscal discipline in all County Government spending aspects. 11 Nyeri County Fiscal Strategy Paper, 2016 42. 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 the 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 43. Expenditure management will be strengthened with full implementation of the Integrated Financial Management Information System (IFMIS) covering all the county departments’ and units’ expenditures as an end-to-end transaction platform. Entrenchment of Program Based Budget, capacity building on budget related matters and enforcement performance benchmarks will be emphasized. 2014/15 Budget Framework 44. The County government strategic objectives are outlined in the County Integrated Development Plan on which the FY 2016/17 budget framework is based on. The presumed economic growth is based on an assumption of normal weather pattern during the year as the county is mainly agricultural based. Revenue Projections 45. The County Government is expected to continue instituting measures to widen the revenue base and eliminate possible leakages. The modernization of revenue collection from manual to cashless method and also the implementation of Revenue Administration Act, 2014 and Finance Act, 2015 are expected to streamline revenue collection and increase own generated revenue. The projected revenue in FY 2015/16 budget was scaled 12 Nyeri County Fiscal Strategy Paper, 2016 down during the preparation of the supplementary budget for the same period from Kshs 1,493,358,136 to Kshs 1,082,000,000. This is meant to reflect the reality on the ground based on the prevailing economic trends. As such, total revenue including health sector FIF is expected to be maintained at Kshs 1 billion in the FY 2016/2017. Expenditure Forecasts 46. The key policy documents guiding the County Government’s expenditure decisions is the CIDP (2013-2017), which provides for the development priorities of the county. In addition, the Annual Development Plan outlines the priority projects and programme expected to be implemented in a particular year. In 2016/17, projected development expenditures are expected to remain at 30 percent of total budget as required under the PFM Act, 2012. Recurrent Expenditure 47. Recurrent expenditure is expected to remain at 70 percent of total budget in FY 2016/17. Importantly, this will greatly facilitate delivery of services in line with the programme based budgeting framework which will ultimately strengthen economic growth in the county by optimizing use of the available resources. 48. Wage bill pressures remain high emanating from staff promotion demands. This includes promotions made before devolution of salaries to the counties but have not yet been effected and also those promotions that fell due after devolution. There is also continued pressure from devolution of functions such as youth training and absorption of employees previously contracted under the Economic Stimulus Programme (ESP). 49. 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 then reduced to take into account one-off expenditures affecting the entire county in the FY 2015/16 and then an adjustment factor is applied to take into account the general increase in prices. 13 Nyeri County Fiscal Strategy Paper, 2016 Development Expenditure 50. 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 30percent of the total revenue in FY 2016/17, Most of the outlays are expected to support critical infrastructure that will crowd in private sector investment as well as facilitate critical interventions to eliminate requisite constraints to sustainable growth. 51. 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 encourage investment by the private sector. 52. 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 2016/2017 the fund will be operationalized under the existing legislative framework. Overall Deficit Financing 53. The overall budget for the Financial Year 2016/17 (including grants) is expected to be balanced and the only carry overs from FY 2015/16 budget will be paid through a budgetary reserve in FY 2016/17 planning period. This may result from shortfall in the current projected revenue collection necessitating coming up with a way of addressing the outcomes of the deficit. 54. The County Treasury will continue to tighten the fiscal policy to avoid fiscal deficit. This will be achieved through strengthening revenue mobilization, containing unproductive expenditures and leakages during the medium term period. 14 Nyeri County Fiscal Strategy Paper, 2016 Summary 55. 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. Meanwhile, efficiency and economical spending of County Government resources will be enhanced to create room for critical interventions and pro-poor spending. 56. The county will also ensure full compliance to the national standards and existing legislations to avoid litigations touching on financial administration and management that may delay development and generate possible sanctions impacting negatively on the county financial systems. 15 Nyeri County Fiscal Strategy Paper, 2016 IV DEPARTMENTAL ALLOCATION OF RESOURCES Introduction 57. The 2016 County Fiscal Strategy Paper is prepared at a time when significant improvement in financial and procurement systems in the county has been made. This includes the use of Integrated Financial Management Information System and Introduction of e- Procurement. Despite this progress, the County Government has continue to face a myriad of challenges in planning and budgeting as well as the implementation and reporting on budget status. 58. Limited capacity on budget making and implementation processes by county departments has contributed to inconsistencies in their respective budget estimates. In order to realign the revenue projections with the prevailing economic trends, the projections for the FY 2015/16 was revised through a supplementary budget. 59. There is continuous training and capacity on public finance management, procurement and programme based and participatory budgeting to address the professional gaps for effective service delivery. The County Government will also train its staff on all issues that promotes efficiency in resource management. Departmental Budgeting 60. The County Executive Secretary in charge of Finance and Economic Planning will issue guidelines to the county departments on the preparation of 2016/17 budget with specific ceilings. Each department is expected to plan, formulate, execute and report on their budgets. The 2016/17 budget for the county will be prepared in line with the Public Finance Management Act, 2012 and its attendant regulations of 2015. 16 Nyeri County Fiscal Strategy Paper, 2016 Resources available Equitable share 61. This is from the shared national revenue as provided for in Article 202 and 203 of the constitution. The county is expected to receive Kshs 4.8 billion as part of the constitutionally approved share from the consolidated fund as proposed in the Budget Policy Statement, 2016 and approved by The National Assembly. Additional resources 62. In addition to the equitable share of revenue, the County Government is also expected to get additional resources from the following sources as detailed in Annex II.  Conditional and unconditional allocations from share of the national government as contemplated under Article 202(2) of the Constitution. These amount is expected to be Kshs 388 million for the Nyeri Level V Hospital, Kshs 14 million for compensation of user fees forgone, Kshs 69 for free maternity health care, Ksh 95 million for leasing of health equipment, Ksh 22 million for DANIDA and Ksh 73 million for Roads Maintenance Levy Fund.  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. In the FY 2016/17 is the county projects local revenue collection of Kshs 1 billion.  Grants and donations from development partners in accordance with section 138 and 139 of the Public Finance Management Act, 2012. The county is to receive Kshs 11 million as loans and grants. Allocation of Revenue among Departments 63. Table 5 provides estimates of revenue allocation among departments in the county for FY 2015/16. The allocations comprise of the recurrent and development expenditure. 17 Nyeri County Fiscal Strategy Paper, 2016 Table 5: Approved Budget Allocations by County Departments and Units, July 2015 – June 2016 DEPARTMENTS RECURRENT % OF DEVELOPMENT % OF TOTAL TOTAL TOTAL County Assembly 547,580,707 77.9 155,000,000 22.1 702,580,707 Office of the Governor 81,066,924 100.0 0.0 81,066,924 County Secretary 110,811,352 100.0 0.0 110,811,352 Finance and Economic Planning 262,008,880 55.4 210,877,245 44.6 472,886,125 Lands and Infrastructure 107,554,835 15.2 599,852,127 84.8 707,406,962 Development Health Services 2,014,297,388 87.7 281,492,571 12.3 2,295,789,959 Special Programmes 71,221,428 63.8 40,439,929 36.2 111,661,357 Public Administration, Information 416,335,949 90.6 43,000,000 9.4 459,335,949 and Communication Agriculture, Livestock 296,488,588 72.6 111,668,532 27.4 408,157,120 Development, Fisheries and Co- operative Development Trade, Industrialization 75,282,976 31.4 164,598,823 68.6 239,881,799 Development and Tourism Education, Youth Affairs, ICT and 54,093,002 28.0 138,771,730 72.0 192,864,732 Sports Water, Forestry and Wildlife, 136,804,000 48.3 146,662,780 51.7 283,466,780 Environment and Natural Resources County Public Service Board 34,357,664 87.3 5,000,000 12.7 39,357,664 Energy 78,850,000 44.1 100,092,610 55.9 178,942,610 TOTAL 4,286,753,693 68.2 1,997,456,347 31.8 6,284,210,040 Source: Department of Finance and Economic Planning Supplementary Budget Estimates for FY 2015/16 64. In order to realign the County budget and revenue projections with the prevailing economic trends and the provisions of County Allocation of Revenue Act, 2015, the County Government is operating on a supplementary budget where the local revenue was revised downwards from a projected estimate of Kshs. 1.49 billion to Kshs 1.082 billion. Currently the supplementary recurrent estimates stands at Kshs 4,419,610,946 while the development amounts to Kshs 1,857,937,767 as shown in table below; Table 6: Supplementary Budget Allocations by Departments and Spending Units. 18 Nyeri County Fiscal Strategy Paper, 2016 DEPARTMENTS RECURRENT % OF DEVELOPMENT % OF TOTAL TOTAL TOTAL County Assembly 567,580,707 80.8 90,000,000 12.8 657,580,707 Office of the Governor 106,874,442 131.8 0.0 106,874,442 County Secretary 145,080,596 130.9 5,000,000 4.5 150,080,596 Finance and Economic 345,052,950 73.0 182,377,245 38.6 527,430,195 Planning Lands and Infrastructure 114,054,835 16.1 633,417,653 89.5 747,472,488 Development Health Services 1,914,297,274 83.4 273,162,876 11.9 2,187,460,150 Special Programmes 76,171,428 68.2 32,365,216 29.0 108,536,644 Public Administration, 420,580,785 91.6 30,000,000 6.5 450,580,785 Information and Communication Agriculture, Livestock 306,499,780 75.1 94,048,955 23.0 400,548,735 Development, Fisheries and Co-operative Development Trade, Industrialization 81,282,976 33.9 152,193,020 63.4 233,475,996 Development and Tourism Education, Youth Affairs, ICT 69,819,787 36.2 134,670,692 69.8 204,490,479 and Sports Water, Forestry and Wildlife, 134,144,141 47.3 145,662,780 51.4 279,806,921 Environment and Natural Resources County Public Service Board 37,322,229 94.8 0.0 37,322,229 Energy 100,849,019 56.4 85,039,330 47.5 185,888,349 TOTAL 4,419,610,949 70.3 1,857,937,767 29.6 6,277,548,716 Source: Department of Finance and Economic Planning, 2016 65. Based on the supplementary budget estimates, the half year revenue collection target was Kshs. 541,000,000 and thus with a collection of Kshs 272,485,959 the shortfall constitutes Kshs. 268,514,041 representing a percentage of 49.6%. The development allocation is 29.6% of the total budget estimates with 70.3% going to finance recurrent expenditure. This is necessitated by expenditure pressures on non-discretionary expenditure such as salaries and wages amounting in excess of Kshs 2.6 billion. Fiscal Discipline 66. The county will continue to ensure prudence in management of resources in line with the PFM Act, 2012. With programme based and itemised budget, delivery of goods and services in the county will be seamless. This will be made possible by full adoption of IFMIS and e-procurement ensuring efficiency in financial and procurement procedures. 19 Nyeri County Fiscal Strategy Paper, 2016 Equity in Allocation of Resources 67. In the last three years there has been tremendous development in the county. However, this development has not been experienced equitably. In preparation of this year CFSP, these issues were considered and various public participation forum covering all wards were conducted. Through these forums, three priority projects per ward were identified for possible funding to ensure equitable allocation of resources. The county is also exercising affirmative action for marginalised and underdevelopment areas. 68. The county will also pursue policies that promote equity as this will help, directly and indirectly, to reduce poverty. Equity-enhancing policies, particularly investment in infrastructure (Roads and irrigation system) and human capital such as education and health can, in the long run, accelerate economic growth creating sustainable development. Capacity Building of County Departments 69. County departments have continued to experience 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 adequate resources are provided for training of the departmental personnel on economic planning and budgetary emerging issues. There is also need to deploy requisite professionals to other county departments to give support in planning and budget making. 20 Nyeri County Fiscal Strategy Paper, 2016 V 2016/17 EXPENDITURE FRAMEWORK Resource Envelope 70. 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 and grants are 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 FY 2016/17.  The county government envisages a balanced budget that will be fully funded by the resource envelop comprising of revenue collected from local sources, equitable share, donor funds and conditional grants. Spending Priorities 71. The CIDP has identified priority sectors for funding and this will be adhered to, as required, as we embark on implementation of FY 2016/2017 activities. These priorities were confirmed through the participatory ward forums conducted during the preparation of this document. 72. The County Government will remain steadfast in promoting budgetary transparency, accountability and effective financial management of the economy and the public sector as required by the PFM Act, 2012. Therefore, inefficient and wasteful public expenditure will be eliminated at all levels in order to promote public trust in County Government spending. 21 Nyeri County Fiscal Strategy Paper, 2016 73. Overall, the 2016/17 budget will focus on the following:  The county priority sectors which include health and infrastructure will continue to receive adequate resources. The above sectors will receive a significant share of resources in the budget and thus expected to efficiently create fiscal space to accommodate other strategic interventions in the county.  While as the Health Department is proposed to receive a total of 34.58% of the total budget, it is important to note that 68.1% will be for payment of salaries and other personal emoluments leaving little for development, operations and maintenance.  The allocation to social programmes through Education and Special Programmes departments is a significant consideration which will ensure suffering of the vulnerable is mitigated. These programmes are Elimu Fund; “BIMA Mashinani” that provides NHIF cover to the elderly; and provision of sanitary pads for girls and underwears for boys in class eight across the county.  All sectors such as agriculture, trade, tourism, industry, water and environment will continue to receive reasonable allocations to ensure continued development tempo. 2015/16 Expenditure Estimates 74. Cumulative recurrent expenditure as at end of December 2015 was Kshs 1,705,114,610 (79.45 of the half year recurrent budget) which was mainly used on wages and other operational expenses. The development expenditure at the same period was 147,194,451 (14.7% of the half year development budget). On a cumulative basis, local revenue performance during the first half of the financial year was Kshs 272,485,959 which is 50 percent of the half year target based on the revised estimates. 75. In the course of budget implementation during the first half of the FY 2015/16, several challenges emerged. They include: delayed disbursement of funds; failure to meet revenue target due to existing litigations and narrow revenue base, high and unsustainable 22 Nyeri County Fiscal Strategy Paper, 2016 wage bill and slow adaptation of the new accounting systems and lack of technological knowhow in the implementation of the end–to-end e-procurement procedures. Medium-Term Expenditure Estimates 76. Table 7, below, shows the projected baseline ceilings for the FY 2016/17 budget estimates and projections for the FY 2017/2018 and FY 2018/2019 classified by county departments and units. Table 7: Projected Budget Allocations FY 2016-2017 Department/ 2015/2016 (Revised Estimates) % 2016/2017 (Proposed Ceilings) % 2017/2018 2018/2019 Spending Unit Alloca Alloca Recurrent Development Total tion Recurrent Development Total tion Total Total County Assembly 567,580,707 90,000,000 657,580,707 10.48 567,580,707 50,000,000 617,580,707 9.7 669,459,742 702,932,729 Office of the 106,874,442 0 106,874,442 1.70 131,874,442 0 131,874,442 2.07 138,468,164 145,391,572 Governor County Secretary 145,080,596 5,000,000 150,080,596 2.39 152,080,596 15,000,000 167,080,596 2.62 175,434,626 184,206,357 Public 420,580,785 30,000,000 450,580,785 7.18 400,580,785 30,000,000 430,580,785 6.76 483,609,824 507,790,315 Administration, Information and Communication Finance and 345,052,950 182,377,245 527,430,195 8.40 318,207,475 188,377,247 506,584,722 7.95 531,913,958 558,509,656 Economic Planning Agriculture, 306,499,780 94,048,955 400,548,735 6.38 323,499,780 107,413,563 430,913,343 6.77 426,734,010 448,070,711 Livestock Development and Fisheries Development Water, Forestry and 134,144,141 145,662,780 279,806,921 4.46 134,144,141 149,759,555 283,903,696 4.46 298,098,881 313,003,825 Wildlife, Environment and Natural Resources Education and ICT 69,819,787 134,670,692 204,490,479 3.26 80,819,787 259,670,692 340,490,479 5.35 252,515,003 265,140,753 Health Services and 1,914,297,274 273,162,876 2,187,460,150 34.85 1,919,297,274 283,162,876 2,202,460,150 34.58 2,312,583,158 2,428,212,315 Sanitation Lands and 114,054,835 633,417,653 747,472,488 11.91 114,054,835 553,417,653 667,472,488 10.48 784,846,112 824,088,418 Infrastructure Development Trade, Culture, 81,282,976 152,193,020 233,475,996 3.72 64,282,976 144,693,020 208,975,996 3.28 245,149,796 257,407,286 Industrialization and Tourism Special Programmes 76,171,428 32,365,216 108,536,644 1.73 107,760,560 32,365,216 140,125,776 2.2 115,632,065 121,413,668 Energy 100,849,019 85,039,330 185,888,349 2.96 103,570,691 96,978,490 200,549,181 3.15 210,576,640 221,105,472 County Public 37,322,229 0 37,322,229 0.59 40,868,680 0 40,868,680 0.64 42,912,114 45,057,720 Service Board Total 4,419,610,949 1,857,937,767 6,277,548,716 100.00 4,458,622,729 1,910,838,312 6,369,461,041 100.00 6,687,934,093 7,022,330,798 Source: Department of Finance and Economic Planning Baseline ceilings 77. The recurrent expenditure accounts for 70 per cent which is inclusive of all non- discretionary expenditures mainly personnel emoluments, statutory obligations i.e. pension, payee and utilities (Water and Electricity). These costs must make the first charge on the budget. 23 Nyeri County Fiscal Strategy Paper, 2016 78. A total of 30 percent of the total revenue must be available to fund planned development projects and programmes in line with the PFM Act, 2012. 79. Development expenditures are shared out on the basis of the county priorities as outlined in the CIDP (2013-2017) and the Annual Development Plan FY 2016/17. The priorities have been reassessed and confirmed through public participatory forums conducted at the ward level where three priority projects per ward were identified for possible funding as included in Annex III, as well as other recent CGN’s policy and concept documents. 24 Nyeri County Fiscal Strategy Paper, 2016 V CONCLUSION 80. In the FY 2016/17 budget, improvement of roads and infrastructure, water for domestic use and irrigation and energy will remain key priorities while maintaining reasonable growth on social development programmes in the county. Allocation of funds to the county departments will generally reflect the critical needs of the county residents with the aim of achieving sustainable economic prosperity for all the people of Nyeri. 81. The set of policies outlined in this County Fiscal Strategy Paper reflect the specific diverse county 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 corresponding departmental strategic plans. 82. Resources will always be scarce and therefore prudence in management will be required. A reasonable amount has been allocated to all the departments but it’s important to note that about 43 per cent of the county budget will be spent on personnel emoluments leaving paltry 27 percent for operations and maintenance. 25 Nyeri County Fiscal Strategy Paper, 2016 ANNEX I: REVENUE COLLECTED IN THE FIRST 6 MONTHS OF THE FY 2015/2016 ACCOUNT TARGET Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 TOTAL DESCRIPTION 2015/2016 Kshs Kshs Kshs Kshs Kshs Kshs Kshs CILOR Current Year 0 0 0 0 0 0 0 - DEPARTMENT OF PUBLIC ADMINISTRATION, INFORMATION AND COMMUNICATION. Liquor Licence 7,889,046 3,083,300 3,134,000 6,640,150 3,971,900 7,425,350 4,948,350 29,203,050 AGRICULTURE, LIVESTOCK FISHERIES AND COOPERATIVE DEVELOPMENT Co-operative Audit 1,574,622 86,100 12,300 18,200 40,000 16,700 10,100 183,400 Agricultural 1,928,200 0 45,450 0 123,250 840,000 774,200 1,782,900 Mechanisation Station Wambugu Agricultural 8,834,136 1,251,130 128,897 303,720 247,055 388,530 359,500 2,678,832 Training Centre Veterinary Charges 5,743,179 227,090 344,901 432,040 197,215 501,671 544,515 2,247,432 Slaughtering Fees 3,751,267 230,655 235,600 244,375 263,095 259,305 1,233,030 Slaughter House 630,484 155,705 104,365 78,865 58,590 97,830 119,130 614,485 Inspection Fees Nyeri Slaughter House - 0 0 0 0 0 0 0 Kiganjo Slaughter House - 0 0 0 0 0 0 0 Sale of Fertilizer - 0 0 2,593,500 0 0 400,000 2,993,500 Tea cess - 0 0 0 0 0 0 0 Coffee Cess 392,000 0 0 0 0 0 0 0 Revolving fund Coffee(% - 0 0 0 0 0 0 0 of gross sales) TRADE, INDUSTRIALIZATION & TOURISM Weights and Measures 1,182,944 121,240 162,440 0 0 177,630 0 461,310 Business Permits 151,954,610 4,972,035 2,323,322 1,593,484 1,051,245 1,787,858 2,649,235 14,377,179 Market 77,721,130 3,154,680 2,921,052 3,086,913 3,145,198 2,535,555 2,898,145 17,741,543 Entrance/Stalls/Shop Rents Bed Occupancy - 0 0 0 0 0 0 0 Ambulant Hawkers 1,301,430 43,410 30,490 37,820 50,990 12,590 14,020 189,320 Licences (Other than BSS Permits) HEALTH AND SANITATION SERVICES Hospital Services 258,859,938 9,849,805 20,101,515 8,038,415 1,132,330 1,660,850 10,165 40,793,080 Public Health 46,395,572 758,700 4,230,617 261,700 98,500 48,900 185,900 5,584,317 Burial Fees 142,660 18,000 7,800 6,900 14,200 2,900 9,600 59,400 Public Toilets 551,264 3,575 6,275 14,230 17,370 18,000 13,500 72,950 Garbage Dumping 72,800 47,700 18,300 15,900 7,500 31,590 12,300 133,290 Fee/waste disposal charges Refuse Collection Fee 42,647,173 1,767,046 1,231,641 252,955 153,625 303,420 446,620 4,155,307 Debts Clearance 2,774,320 229,000 148,500 134,500 178,500 65,500 77,700 833,700 Certificate Fee Application Fee 17,495,820 872,520 1,460,650 2,901,450 1,641,990 472,850 453,170 7,802,630 Business Subletting / 394,660 17,800 0 0 10,000 27,600 0 55,400 Transfer Fee Document Search Fee 264,040 16,000 13,750 15,000 20,500 10,000 16,500 91,750 Agency Fee (Fees from, 13,703 0 6,000 2,250 1,114,075 0 0 1,122,325 Insurance Firms, etc.) Cheque Clearance Fee 350 0 5,000 0 0 0 0 5,000 26 Nyeri County Fiscal Strategy Paper, 2016 Impounding 4,003,200 636,950 726,310 240,340 104,600 313,685 243,600 2,265,485 Charges/Court Fines, penalties, and forfeitures Sales of Council's 396,960 20,000 18,000 16,000 10,000 22,000 8,000 94,000 Minutes / Bylaws Tender Documents Sale 2,911,020 0 0 0 1,000 0 0 1,000 Sale of Old Office - 0 0 0 0 0 0 0 Equipment and Furniture IFAD Hall - 0 0 0 0 0 0 0 miscellaneous Income 702,520 10,500 34,855 31,150 2,000 340,940 108,780 528,225 Interest from Investments 2,530,110 0 500 11,717 77,805 0 0 90,022 Customers Deposits 970,075 58,865 52,925 64,945 57,910 51,845 57,450 343,940 (Other than Water & Sewerage) Benevolent Fund 1,776,600 88,500 91,500 91,500 90,000 81,000 67,500 510,000 Central Kenya show - 0 0 0 0 0 0 0 annual permit Grants PUBLIC WORKS, ROADS,TRANSPORT, LANDS, HOUSING & PHYSICAL PLANNING Parking Fees 143,436,072 7,049,130 6,996,880 6,777,940 5,987,725 5,850,180 5,930,510 38,592,365 Parking 195,010 170,000 165,300 345,800 186,100 148,300 1,210,510 Clamping/Penalties/Offen ces fees Land Rates 79,100,397 4,823,085 3,090,186 1,838,413 1,233,378 761,934 1,375,600 13,122,596 Other Property Charges 737,597 48,526 19,750 32,778 16,900 23,250 15,000 156,204 Ground Rent - Current 4,405,532 183,345 80,931 58,881 40,563 39,038 72,962 475,720 Year Ground Rent - Other 3,086,009 485,009 101,914 128,927 129,298 121,911 123,902 1,090,961 Years Stand 83,000 0 0 0 0 0 0 0 Premium/Commissioner of Lands Temporary Occupation 2,394,000 162,500 107,500 137,500 127,500 140,000 122,500 797,500 License (TOL),New occupation, Space Rent, Retainers fees Hire of Plant & - 0 0 0 0 0 0 0 Machinery Plot Transfer Fee 1,268,000 131,500 149,000 56,000 52,500 62,500 58,500 510,000 Cess (Quarry, produce, 37,269,376 3,015,041 2,032,830 1,301,830 1,171,790 1,483,166 1,131,460 10,136,117 Kaolin, etc.) Housing Estates Monthly 16,911,457 1,277,787 1,019,949 944,912 1,132,237 1,147,828 1,671,204 7,193,917 Rent Housing Estates Monthly 1,834,295 350,087 0 13,294 164,288 34,852 123,547 686,068 Rent (Kiawara, Majengo & Kingongo ph. 3) Approvals(extension of 3,342,500 58,500 130,500 76,500 75,000 21,000 88,500 450,000 users, pegging for Kiosk, subdivision, transfer, amalgamation, survey, Occupation cert, boundary dispute etc.) Sign Boards & 23,269,444 1,183,330 1,217,948 761,600 1,057,300 927,300 530,000 5,677,478 Advertisement Fee Buildings Plan Approval 13,216,766 626,259 775,254 703,106 402,808 656,466 765,577 3,929,470 Fee Buildings Inspection Fee 3,643,348 210,400 161,500 210,100 197,800 205,500 156,500 1,141,800 Right-of-Way / Way- 1,680,000 416,160 24,720 0 0 0 0 440,880 Leave Fee (KPLN, 27 Nyeri County Fiscal Strategy Paper, 2016 Telkom, etc.) Consent to Charge 1,693,220 0 158,500 161,000 127,500 64,000 72,000 583,000 Fee/Property Certification Fee (Use as Collateral) Fire-Fighting Services 1,752,800 3,000 0 0 15,000 11,000 5,000 34,000 DEPARTMENT OF GENDER, CULTURE AND SOCIAL DEVELOPMENT Social Hall Hire 133,420 2,000 24,000 14,000 28,000 60,000 26,000 154,000 EDUCATION,YOUTH - 0 0 0 0 0 0 0 AFFAIRS,SPORTS AND ICT Nursery Schools Fee 300,000 600 24,600 60,260 3,600 0 33,660 122,720 (KRT) Nursery Schools 216,160 11,150 1,350 37,500 11,300 5,400 0 66,700 Fee(Kingongo) Nursery Schools Fee 198,800 9,950 5,000 16,200 17,700 17,650 0 66,500 (Nyakinyua) Stadium Hire 1,552,800 0 160,000 10,000 0 0 226,000 396,000 Registration of School, 56,000 0 0 0 0 0 0 0 Training/Learning Centre Fee WATER,ENVIRONMENT AND NATURAL RESOURCES Sale of flowers, plants, - 0 0 0 0 0 0 0 firewood, produce e.t.c Exhauster services - 0 0 0 0 0 0 0 Charge Lease of Water - 0 0 0 0 0 0 0 Distribution Network Private borehole - 0 0 0 0 0 0 0 operators Quarry /mining charges- - 0 0 0 0 0 0 0 annual licence fee Tree c cutting permits - 0 0 0 0 0 0 0 Water bowser/water - 0 0 0 0 0 0 0 vendor licences Tipping charges - 0 0 0 0 0 0 0 Use of public toilets - 0 0 0 0 0 0 0 Polluters of environment - 0 0 0 0 0 0 0 penalties Sub Total 996,008,066 47,962,675 54,049,267 40,634,060 26,169,805 29,316,964 27,364,007 225,496,778 FIF 46,989,181 Total 272,485,959 Source: Department of Finance and Economic Planning ANNEX: II SOURCES OF BUDGET FUNDING IN FY 2016/17 No. Description Total in Kshs Comments 1 Equitable Share 4,800,764,767 28 Nyeri County Fiscal Strategy Paper, 2016 No. Description Total in Kshs Comments 2 Conditional Grants County Referral Hospital 388,439,306 For health department Compensation for user fees 14,347,664 For health department foregone Free maternity health care 69,215,585 For health department Leasing of medical 95,744,681 Retained by the National equipment Government Loans and Grants 11,465,000 Retained by the National Government DANIDA 22,930,000 Not reflected in the BPS but assumed the funding will continue Health sub total 602,142,236 This is part of budget Road maintenance levy fund 73,762,719 For roads department (This is part of the budget) Total 675,904,955 3 Local Revenue 1,000,000,000 Reduced by Kshs. 82m from the 2015/2016 projected estimates Total County Allocation 6,476,669,722 Total for budgeting 6,369,461,041 ANNEX III: WARD PRIORITIES AS CAPTURED DURING THE PUBLIC PARTICIPATION FORUMS NO. WARD PRIORITY PROJECTS SPECIFIC ACTIVITIES DEPARTMENT 1. Konyu Access road improvement Murraming 8 kilometers Lands and Infrastructure Street lighting 5 no. High mast flood lights at Kiamabara, Energy Gathugu, Ndimaini, Gatina and Gaturiri Konyu ECDE’s Renovation of classrooms Education and ICT 2. Rware Access road improvement Gravelling and Murraming Lands and Infrastructure Nyeri town markets Upgrading of all markets in Nyeri town Trade Jua kali sheds Construction and Settlement of all mechanics Trade 3. Mahiga Access road improvement Gravelling and Murraming of Gathima-Kagere Lands and Infrastructure road and Kihiri-Ngorano Road Mahiga irrigation water Reviving the irrigation project by renovating the Water, Environment and project infrastructure natural resources Kamoko health center Upgrading and equipping Health Services 4. Iriaini- Mathira New Iriaini Water Project Upgrade existing water lines to distribute to all Water, Environment and the 13 sub locations natural resources Access road improvement -Gravelling and Murraming of 8 km, culvert Lands and Infrastructure installation -Construction of Gatura bridge 29 Nyeri County Fiscal Strategy Paper, 2016 NO. WARD PRIORITY PROJECTS SPECIFIC ACTIVITIES DEPARTMENT Health facilities Upgrade Ihwagi and Kangocho dispensaries to Health Services improvement health centers Construction of Miiri and Kiaguthu Dispensaries 5. Gatarakwa Access road improvement Gravelling and Murraming of 8 km, culvert Lands and Infrastructure installation Health facilities Construction of Gitegi, Charity and Kimunyuru Health Services improvement dispensaries Nganyuthe water project Extending the pipeline and construct a reservoir Water, Environment and at Kimunyuru natural resources 6. Mukurweini west Mukurweini west water Extension of Iganjo and construction of Gura Water, Environment and project water pipelines and intake at Gura river natural resources Muyu Dispensary Construction and equipping Health Services Mukurweini west street Installation of High mast flight lights at Gakindu, Energy lighting Tambaya, Kiawamururu and Kaheti centres 7. Dedan Kimathi Access road improvement Gravelling and Murraming of 8 km, culvert Lands and Infrastructure installation Kimathi/Muhoya irrigation Construction of intake and pipeline Water, Environment and water project natural resources Dedan Kimathi colonial Planning of the colonial villages Lands and Infrastructure villages 8. Mugunda Access road improvement Gravelling and Murraming of 8 km, culvert Lands and Infrastructure installation Health facilities -Completion of Karemeno, Muthangira, Health Services improvement Kiambogo, Lamuria and Mugunda dispensaries - Contruction of Kiawara Level IV hospital Mugunda Water project Construction of reservoirs at Komu, Kiawara Water, Environment and and St. George, water tanks at ECDEs and natural resources expansion of Mugunda and Gatarakwa intakes. 9. AGUTHI GAAKI WARD Grading and gravelling of kiaraho –bangaini road, ithekahuno-mathira Lands and Infrastructure roads road, githu- kaaro rd Aguthi –Gaaki irrigation Water for irrigation Water, environment & project natural resources Mulika mwizi Muthinga shopping centre Energy 10. Gikondi ward Water for irrigation Water for irrigation Water, Environment and natural resources Roads Grading, construct brigdes (various) Lands and infrastructure Health centres Karaba health centre ugrade Health Services 11. Endarasha/mwiyogo Mwiyogo water project 7 reservoire tanks at various points Water, Environment and natural resources Honi- mweiga- Road improvement drainage and expansion Lands and infrastructure muturanguru rd Endarasha market Toilets and livestock market Trade 12. Ruring’u ward Mulika mwizi & street Erection of high mast flood lights Energy lighting Kiamwathi dispensary Construction Health Services Ruring’u Roads Expansion and grading Lands and Infrastructure 13. Iriani ward- Othaya Dispensaries Improve and upgrade all dispensaries Health Services Youth polytechnic Improve and construct youth Education and ICT Irrigation water Provide infrastructure Water, Environment and natural resources 14. Mukurwe-ini central Upgrading of feeder roads Expansion and grading Lands and Infrastructure 30 Nyeri County Fiscal Strategy Paper, 2016 NO. WARD PRIORITY PROJECTS SPECIFIC ACTIVITIES DEPARTMENT Upgrading of Mukurweini Improve and upgrade Health Services hospital Water for Irrigation Provide infrastructure Water, Environment and natural resources 15. Kabaru a) Health facilities - construction of Mortuary at Kabaru Dispensary Health Services imrovement - construction of Staff houses at Island Farms Health Centre - Construction of Dispensary at Mbiriri-jet – Huhoini Kairi b) Construction of a Construction of a dam for irrigation Water, Environment and dam for irrigation Natural Resources c) Access roads Grading and murraming Lands and Infrastructure Improvement 16. Magutu a) Water intake at construction Water, Environment and Magutu Natural Resources b) Maternity wing at construction Health Services Gatei Dispensary c) Gikumbo stadium Fencing the playground, construction of covered Special Programs refurbishment she (dias) and toilet blocks 17. Rugi Ward a) Rugi irrigation Water intake and supply Water, Environment and water project Natural Resources b) Store for subsidized construction Agriculture, Livestock, farm inputs Fisheries and Cooperatives c) Giathungu Public Construction of Public Library at Giathungu Special Programs Library Polytechnic 18. Thegu Ward a) Electric fence around Construction of Electric fence around Mt. Kenya Energy Mt. Kenya forest in forest in Thegu Ward Thegu Ward b) Thingiri dispensary Construction Health Services c) ECDE Classes Construction of ECDE classes in each of the 4 Education and ICT locations 19. Wagamana Ward a) Roads Grading and murraming Lands and Infrastructure Improvement b) Irrigation water Construction and water reticulation Water , Environment and Natural Resources c) Upgrading of Construction Health Services Wamagana Dispensary to a level four hospital 20. Ruguru Ward a) Roads Grading and murraming Lands and Infrastructure Improvement b) Giagachika Water Water supply – Kabiruini-Maria- Muutini, Water , Environment and project Giagachika route Natural Resource c) High mast flood At Kiamariga , centre hospital, Hombe (Iruri) Energy lights 21. Kirimukuyu Water connection Pipeline Infrastructure development Water, Environment and Natural Resources Access Roads Grading and Gravelling Lands and Infrastructure Improvement Health Centre Completion and Equipping Health services 31 Nyeri County Fiscal Strategy Paper, 2016 NO. WARD PRIORITY PROJECTS SPECIFIC ACTIVITIES DEPARTMENT 22. Kamakwa/ Mukaro Mukaro Water Project Pipeline Infrastructure development Water, Environment and Natural Resources Access Roads Grading and Gravelling Lands and Infrastructure Improvement Gitero and Kamuyu Connection of electricity Health Services Dispensary 23. Karatina Karatina Main Stage and Rehabilitation Lands and Infrastructure Kiawarigi stage Construction and Enhancing the drainage system Kariithi Water Project Piping and distribution Water, Environment and Natural Resources Access Roads Grading and Gravelling Lands and Infrastructure Improvement 24. Chinga Access Roads Grading and Gravelling Lands and Infrastructure Improvement Changachicha Irrigation Construction of Intake, reservoir and distribution Water, Environment and Water Project Natural Resources Chinga Milk Cooling Plant Collection containers and vehicle Agriculture, Livestock, fisheries and Cooperative Development 25. Naromoru/ Kiamathaga Naromoru Health Centre Upgrading to level IV Health Services Naromoru Stadium Completion, Fencing and toilet construction Special Programmes, Youth Affairs and Sports Naromoru/Kiamathaga Purchase of pipes, Construction of storage Water, Environment and Various Water Projects tanks and intakes Natural Resources 26. Gakawa Tinga Dam Construction of water pans Water, Environment and Natural Resources Ragati Dispensary Completion and Equipping Health Services Gakawa Youth Construction Education and ICT Polytechnic 27. Karima Karima Ward Irrigation Pipeline Infrastructure development Water, Environment and Projects Natural Resources Witima Health Centre Upgrading, Staffing, Rehabilitation centre Health Services development, and purchase of X-ray Equipment Foot Bridge Project and Construction of Foot bridges at Kagongo, Thuti, Lands and Infrastructure Access Roads Kihiu, Gakundo, Gatugi Factory and Kihungiru Improvement Grading and Gravelling 28. Kiganjo/ Mathari Mathari/ Kihuyo Irrigation Pipeline Infrastructure development Water, Environment and Water Project Natural Resources Wangi-Kanuna Irrigation Pipeline Infrastructure development Water, Environment and Water project Natural Resources Kiganjo-Nyaribo link road Grading and Gravelling Lands and Infrastructure and other feeder roads 29. Mweiga Mweiga Health Centre and Upgrading of the Health Centre and Health Services Amboni Construction of Maternity Wing of the Dispensary Improvement of all Feeder Grading and Gravelling Lands and Infrastructure Roads Irrigation Water Projects Simbara Bondeni and Simbara Amboni Water, Environment and Natural Resources 30. Gatitu/ Muruguru Improvement of all Feeder Grading and Gravelling Lands and Infrastructure 32 Nyeri County Fiscal Strategy Paper, 2016 NO. WARD PRIORITY PROJECTS SPECIFIC ACTIVITIES DEPARTMENT and Access Roads Thunguma Dispensary Completion, Equipping and Staffing Health Services High Mast Flood Lights Installation at Riamukurwe, Thunguma, Githiru, Energy Marua, Kiamuiru Trading Centers 33 Nyeri County Fiscal Strategy Paper, 2016