COUNTY GOVERNMENT OF MOMBASA COUNTY TREASURY MOMBASA COUNTY BUDGET REVIEW AND OUTLOOK PAPER ©SEPTEMBER 2019 © Budget Review and Outlook Paper (CBROP) 2019 To obtain copies of the document, please contact: Public Relations Office Department of Finance and Economic Planning County Assembly Building P. O. Box 90440-80100 MOMBASA, KENYA Tel: +254-41-2311531 Fax: +254-41-2311531 countyfinance@mombasa.go.ke The document is also available on the internet at: www.mombasa.go.ke Foreword The Mombasa County Budget Review and Outlook Paper (CBROP), prepared in accordance with the Public Finance Management Act, 2012 is the sixth under the new dispensation and the second one in the second term of the County Government. It presents the recent economic developments and actual fiscal performance of the FY 2018/2019 and makes comparisons to the budget appropriations for the same year. It further provides updated forecasts with sufficient information to show changes from the projections outlined in the latest County Fiscal Strategy Paper (CFSP), released in February 2019. In this Paper, we will also provide an overview of how the actual performance of the FY 2018/2019 affected the County’s compliance with the fiscal responsibility principles and the financial objectives as detailed in the 2019 CFSP. This is the second CBROP that has been prepared within the second-generation County Integrated Development Plan 2018-2022 that outlines the County’s planning framework that will guide county programmes budgeting, project funding, monitoring and evaluation. In this CBROP the County is re-emphasizing the Government’s fiscal policy strategy, which focuses on maintaining a strong revenue effort and shifting composition of expenditure from recurrent to productive capital expenditures and optimally ensuring efficiency and effectiveness in the use of public resources. A strategy that recognizes the need to strike a balance between growth and fiscal sustainability, with emphasis on higher investments in the social sectors and infrastructure development for a stronger and more durable growth. As outlined in the CFSP, the development agenda will be implemented through the major priority sectors; Increased accessibility to water and food security, investing in accessible and quality health services, provision of quality education, Youth, Sports & Gender empowerment, Improved Land and housing Services and investing in infrastructure development. The implementation of programs under these strategic sectors is expected to raise efficiency and Productivity in the County’s economy and in turn accelerate and sustain inclusive growth, create opportunities for productive growth and ensure high standards of living for Mombasa County residents. The County Treasury will link this CBROP with the other budgetary policy documents as stipulated in the PFM Act. MS. MARYAM MBARUK COUNTY EXECUTIVE COMMITTEE MEMBER FINANCE AND ECONOMIC PLANNING Acknowledgement This policy document is prepared in line with the provisions of the Public Financial Management Act, 2012 Article 118(1) (a). The preparation of this County Budget Review and Outlook Paper continues to be a collaborative effort from an array of expertise of professionals in the County Treasury. The information in this policy document has been obtained from the Mombasa County Treasury. We are grateful for their inputs. Immense appreciation goes to the Executive Member for Finance and Economic Planning for the good will and guidance provided during the entire period of preparation of this document. A core team from the Accounting and the Budget and Economic Planning units spent significant amount of time consolidating this policy document. We are particularly grateful to Ms. Jane Githui (Director Budget & Economic Planning) and Mr. Affan Mohamed (Head of External Economic Affairs) for working tirelessly in the development of this document. MS. ASHA ABDI CHIEF OFFICER FINANCE AND ECONOMIC PLANNING Table of Contents Legal Background ..........................................................................................................................................7 I. INTRODUCTION .....................................................................................................................................9 II. REVIEW OF FISCAL PERFORMANCE IN 2018/19 ................................................................................. 10 III. OVERVIEW ...................................................................................................................................... 11 IV. FISCAL PERFORMANCE FOR 2018/19 ............................................................................................. 11 LOCAL REVENUE ..................................................................................................................................... 11 EXCHEQUER ISSUES ................................................................................................................................ 12 COUNTY DEPARTMENTAL EXPENDITURE ............................................................................................... 13 DETAILED REVENUE ANALYSIS ............................................................................................................... 17 REVENUE ANALYSIS FOR 2018/19 FY ..................................................................................................... 21 Expenditure ........................................................................................................................................ 21 Overall Balance and Financing ........................................................................................................... 21 Implication of 2018/19 fiscal performance on the set financial objectives ....................................... 22 Updated Expenditure Projections against CFSP'18 Projections, 2018/19- 2020/21 ............................. 27 V. RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK ....................................................................... 28 Recent Economic Developments ........................................................................................................... 29 Macroeconomic Outlook and Policies .................................................................................................... 32 Inflation Outlook .................................................................................................................................... 35 Medium Term Fiscal Framework ............................................................................................................ 36 Risks to the Outlook ............................................................................................................................... 37 VI. RESOURCE ALLOCATION FRAMEWORK ................................................................................................ 38 A. Adjustment to 2019/20 Budget ......................................................................................................... 38 B. Medium-Term Expenditure Framework ............................................................................................ 38 C. Departments Budgets and Programs Prioritization ........................................................................... 41 D. 2020/21 Budget Framework .......................................................................................................... 42 VII. CONCLUSION AND WAY FORWARD ..................................................................................................... 43 Abbreviations and Acronyms ADP Annual Development Plan BOPA Budget Outlook Paper BPS Budget Policy Statement BSP Budget Strategy Paper CBROP County Budget Review and Outlook Paper CG County Government CIDP County Integrated Development Plan FY Financial Year GDP Gross Domestic Product GoK Government of Kenya KNBS Kenya National Bureau of Statistics SDG Social Development Goals MTEF Medium Term Expenditure Framework MTP Medium-Term Plan NFA Net Foreign Assets NDA Net Domestic Assets PERs Public Expenditure Review PFM Public Financial Management PPP Public Private Partnership SBP Single Business Permit SWGs Sector Working Groups VAT Value Added Tax V 2030 Vision 2030 Legal Background The County Budget Review and Outlook Paper (CBROP) have been prepared by the County Treasury in accordance with Section 118 of the Public Finance Management (PFM) Act. The Act states that a County Treasury; • Shall prepare a County Budget Review and Outlook Paper in respect of the county for each financial year; and • Submit the paper to the County Executive Committee by the 30th September of that year. The main objectives of a CBROP are to specify; • The details of the actual fiscal performance in the previous year compared to the budget appropriation for that year; • The updated economic and financial forecasts in relation to the changes from the forecasts in the most recent County Fiscal Strategy Paper (CFSP); • Any changes in the forecasts compared with the CFSP; • How actual financial performance for the previous financial year may have affected compliance with the fiscal responsibility principles, or the financial objectives in the CFSP for that financial year; and • Reasons for any deviation from the financial objectives in the CFSP together with proposals to address the deviation and the time estimated for doing so. In summary, this CBROP is expected to present a review of the fiscal performance for the previous year, 2018/19 financial year. The CBROP is expected to provide a summary of the national macroeconomic outlook and how this will affect the County’s economic performance. The above statistics would partly provide the basis for the revision of the Financial Year 2019/20 budget in the context of the Supplementary Estimates, as well as setting out the broad fiscal parameters for the next budget and medium term. The fiscal framework presented in this document provides a strong basis for building our common future under the current constitutional dispensation. The paper also presents an overview of budget financing sources that includes the equitable share, local revenue and grants. In the last section, the paper offers some conclusions and the way forward. Mombasa County Budget Review and Outlook Paper Page xi I. INTRODUCTION 1. The law requires CBROP to present the fiscal outcome for the previous financial year and to state how this outcome affects the financial objectives contained in that year’s CFSP. In line with the law, this CBROP contains a review of the fiscal performance of the financial year 2018/19, updated macroeconomic forecast, and deviations from the Fiscal Strategy Paper February 2019. 2. The objective of the CBROP is to provide a review of the previous fiscal performance and how this impacts the financial objectives and fiscal responsibility principles set out in the Fiscal Strategy Paper (CFSP). This together with updated macroeconomic outlook provides a basis for revision of the current budget in the context of Supplementary Estimates and the broad fiscal parameters underpinning the next budget and the medium term. Details of the fiscal framework and the medium-term policy priorities will be firmed up in the next Budget Policy Statement (BPS). 3. The CBROP will be a key document in linking policy, planning and budgeting. The County Government has started the implementation of the County Integrated Development Plan (CIDP) 2018-2022 from which is being implemented through the Annual Development Plan 2018 and the Annual Budget estimates for the 2019-20 financial year. 4. The PFM Act enacted in 2012 has set high standards for compliance with the Medium- Term Expenditure Framework (MTEF) budgeting process. Therefore, it is expected that the sector ceilings for the Third Year of the MTEF provided in the previous CFSP will form the indicative baseline sector ceilings for the next budget of 2020/21. However, following the fiscal outcome of 2018/19 and the updated macroeconomic framework these sector ceilings have been modified as indicated in the annex of this CBROP. 5. The updated macroeconomic outlook will be firmed up in the next CFSP to reflect any changes in economic and financial conditions. We are committed to maintain the trend of economic growth and development in line with the expectations and commitments that the County has made to the people of Mombasa County. Towards this end, we shall Mombasa County Budget Review and Outlook Paper Page 2 ensure there is transparency and accountability by relaying our performance indicators to the public as well as publicizing other publications as required by the Constitution and the Public Finance Management Act. II. REVIEW OF FISCAL PERFORMANCE IN 2018/19 6. This section is meant to review how the actual financial performance for the 2018/19 financial year may have affected compliance with the fiscal responsibility principles, or the financial objectives in the CFSP for that financial year. 7. In line with the Constitution, the Public Financial Management (PFM) Act, 2012, sets out the fiscal responsibility principles to ensure prudency and transparency in the management of public resources. The PFM law (Section 15) states that: a) Over the medium term, a minimum of 30% of the budget shall be allocated to development expenditure b) The Government’s expenditure on wages and benefits for public officers shall not exceed a percentage of the Government revenue as prescribed by the regulations (35%) as per the Public Finance Management Regulations 2015. c) Over the medium term, the Government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure d) Public debt and obligations shall be maintained at a sustainable level as approved by County Assembly (CG) e) Fiscal risks shall be managed prudently f) 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. III. OVERVIEW The fiscal performance in 2018/19 was on a bullish trend despite a shortfall in own source revenues and donor funding. The County was able to realize Kshs. 13,360,488,591 which translates to 93 percent of the supplementary budget of Kshs 14,456,495,575, out of which 100 percent was recurrent expenditure of Kshs. 10,253,993,461 and 72 percent being development expenditure of Kshs 3,106,495,130. In view of the above the County had a 7 percent budget deficit of Kshs. 1,096,006,984. IV. FISCAL PERFORMANCE FOR 2018/19 LOCAL REVENUE Table 1: Local Revenue Collection Over Five Financial Years MONTH 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 JULY 104,030,972 138,888,662 78,327,409 128,948,779 91,417,758 AUGUST 93,759,799 121,870,568 138,978,980 79,974,633 131,852,605 SEPTEMBER 95,400,916 123,410,370 134,037,320 98,958,707 75,372,653 OCTOBER 116,757,916 115,703,161 160,474,776 91,999,794 195,706,353 NOVEMBER 102,318,612 122,057,894 183,999,072 90,326,887 147,841,146 DECEMBER 191,916,082 115,254,598 151,828,812 88,025,962 363,008,810 JANUARY 336,767,628 337,339,057 321,392,757 218,656,932 437,327,591 FEBRUARY 346,773,579 200,260,788 303,286,028 202,052,628 423,072,353 MARCH 413,101,785 308,215,252 469,422,317 677,958,599 745,066,240 APRIL 211,331,816 612,075,951 365,071,728 677,126,092 472,840,320 MAY 143,751,841 376,582,733 328,912,588 254,091,979 208,729,502 JUNE 335,744,384 371,871,652 530,509,174 551,010,104 412,062,041 TOTAL 2,491,655,330 2,943,530,686 3,166,240,961 3,168,013,709 3,704,297,372 11 Monthly Revenue Collection over Five Financial Years 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 0 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 Source: Table 1 EXCHEQUER ISSUES 8. Exchequer issues from the National Government increased over the last three financial years as shown below. Table 2: Actual Monthly Exchequer Issues Over Four Financial Years and allocated 2019/20 KSHS. KSHS. KSHS. KSHS. MONTH EXCHEQUER EXCHEQUER EXCHEQUER EXCHEQUER *ALLOCATED ISSUES 2015- ISSUES 2016-2017 ISSUES 2017-2018 ISSUES 2018- EXCHEQUER 2016 2019 ISSUES 2019-2020 JULY 0 0 597,970,752 0 512,052,473 AUGUST 448,064,387 1,037,748,641 0 430,761,965 1,283,472,708 SEPTEMBER 0 501,676,603 473,286,618 587,699,500 767,449,963 OCTOBER 957,032,726 518,083,015 0 741,181,901 786,879,076 NOVEMBER 517,858,857 558,883,251 996,790,289 875,741,969 854,880,971 DECEMBER 517,237,435 501,676,603 843,101,778 822,680,000 767,449,963 JANUARY 450,078,941 478,282,890 866,001,087 944,297,016 928,591,737 FEBRUARY 448,064,387 15,105,000 683,706,112 794,895,339 794,291,130 MARCH 12,399,574 577,456,833 712,190,289 0 884,024,641 APRIL 500,043,327 525,787,311 78,786,439 1,515,161,166 806,308,189 MAY 955,030,610 1,111,343,905 824,219,384 54,151,120 1,015,470,813 JUNE 933,956,255 538,706,387 2,786,366,845 2,449,218,601 825,737,302 TOTAL 5,739,766,499 6,364,750,439 8,862,419,593 9,215,788,577 10,226,608,966 12 EXCHEQUER ISSUES Exchequer issues from the National Government increased over the last three financial years as shown, Expected FY 2019-20 included in Millions. 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 0 1 EXCHEQUER ISSUES 2015-2016 EXCHEQUER ISSUES 2016-2017 EXCHEQUER ISSUES 2017-2018 EXCHEQUER ISSUES 2018-2019 *ALLOCATED EXCHEQUER ISSUES 2019-2020 Source: Table 2 COUNTY DEPARTMENTAL EXPENDITURE 10. The figures and tables below illustrate the County’s departmental utilization of funds both in development and recurrent. They present the fiscal performance for the FY 2018/19 and the deviations from the Original and Revised budget estimates. Table 3: Departmental %Age Expenditure Compared to the Total Budget 2018/2019 DEPARTMENTAL RECURRENT EXPENDITURE S/NO DEPARTMENTS Original Budget Final Budget FY TOTAL %age FY 2018/2019 2018/2019 3011 The Executive 382,877,200 392,849,560 359,522,059 91.8% 3012 County Assembly 610,986,278 707,114,950 682,989,659 96.6% 3013 Public Service Board 131,749,530 97,279,232 77,902,220 80.1% 3014 Finance and Economic Planning 1,107,521,980 2,203,652,095 2,165,655,494 98.3% 3015 Energy, Environment and Waste Management 510,208,594 571,430,649 528,341,544 92.5% 3016 Education, Information Technology and Mv 2035 578,507,296 477,019,476 397,535,735 86.1% 3017 Health 2,683,387,579 2,469,804,767 3,101,738,503 127.2% 3018 Water, Environment and Natural Resources 137,635,994 69,278,191 52,726,209 76.6% 3019 Youth, Gender, Sports and Cultural Affairs 230,297,579 203,328,519 187,973,874 92.4% 13 3020 Trade, Tourism and Investments 405,456,909 483,853,642 386,526,788 79.9% 3021 County Planning, Land and Housing 226,404,844 150,702,589 127,393,238 84.5% 3022 Transport, Infrastructure and Public Works 468,593,286 452,155,443 428,257,872 94.7% 3023 Agriculture, Fisheries, Livestock and Co-Operatives 232,703,389 208,839,379 192,386,271 92.1% 3026 Devolution and Public Service Administration 919,794,396 1,625,206,337 1,565,043,995 98.0% REC TOTAL 8,626,124,854 10,112,514,829 10,253,993,461 102.2% 2018/2019 DEPARTMENTAL DEVELOPMENT EXPENDITURE S/NO DEPARTMENTS Original Budget Final Budget TOTAL %age FY 2018/2019 FY 2018/2019 3011 County Executive 84,424,673 8,913,030 7,306,594 82.0% 3012 County Assembly 45,773,748 - - - 3013 Public Service Board 21,637,280 4,514,200 4,280,707 94.8% 3014 Finance & Economic Planning 302,447,782 572,184,023 559,378,197 97.8% 3015 Energy, Environment & Waste Management 410,372,081 257,525,112 209,644,412 81.4% 3016 Education, Information Technology & MV 2035 244,499,756 97,242,233 54,126,040 55.7% 3017 Health Services 240,255,554 116,559,248 100,776,236 86.5% 3018 Water, Sanitation & Natural Resources 767,050,100 600,000,000 15,562,353 2.6% 3019 Youth, Gender, Sports and Cultural Affairs 1,269,841,602 147,479,603 92,455,232 62.7% 3020 Trade, Tourism & Investment 95,631,669 146,516,150 99,941,671 68.2% 3021 Lands, Housing and Physical Planning 221,201,888 244,153,682 184,373,277 75.5% 3022 Transport & Infrastructure 837,855,896 1,915,739,350 1,589,465,194 83.0% 3023 Agriculture, Fisheries, Livestock and Co-operatives 266,591,948 172,552,337 132,803,363 77.0% 3024 Devolution & Public Service Administration 158,063,060 60,601,778 56,381,853 93.0% TOTAL 4,965,647,037 4,343,980,746 3,106,495,130 71.5% 14 2018/2019 TOTAL DEPARTMENTAL EXPENDITURE Approved Budget FY Supplementary DEPARTMENTS Total Expenditure %age 2018/2019 Budget FY 2018/2019 3011 County Executive 467,301,873 401,762,590 366,828,652 92% 3012 County Assembly 656,760,026 707,114,950 682,989,659 97% 3013 Public Service Board 153,386,810 101,793,432 82,182,927 81% 3014 Finance & Economic Planning 1,409,969,762 2,775,836,119 2,725,033,692 98% 3015 Energy, Environment & Waste Management 920,580,675 828,955,761 737,985,956 89% 3016 Education, Information Technology & MV 2035 823,007,052 574,261,709 451,661,776 79% 3017 Health Services 2,923,643,133 2,586,364,015 3,202,514,740 125% 3018 Water, Sanitation & Natural Resources 904,686,094 669,278,191 68,288,562 10% 3019 Youth, Gender, Sports and Cultural Affairs 1,500,139,181 350,808,122 280,429,106 80% 3020 Trade, Tourism & Investment 501,088,578 630,369,792 486,468,460 77% 3021 Lands, Housing and Physical Planning 447,606,732 394,856,271 311,766,515 79% 3022 Transport & Infrastructure 1,306,449,182 2,367,894,793 2,017,723,065 85% 3023 Agriculture, Fisheries, Livestock and Co-operatives 499,295,337 381,391,716 325,189,634 85% 3026 Devolution and Public Service Administration 1,077,857,456 1,685,808,115 1,621,225,848 96% TOTAL 13,591,771,891 14,456,495,576 13,360,488,591 93% Table 4: GROWTH OF EXECUTIVE EXPENDITURE FROM 2014/15-2018/19 GROWTH OF EXPENDITURE FROM 2014/2015-2018/2019 S NO. DEPARTMENTS 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 3011 County Executive 929,699,966 775,487,598 289,680,017 305,472,424 366,828,652 3013 Public Service Board 55,377,190 42,201,643 47,783,171 69,337,345 682,989,659 3014 Finance & Economic Planning 1,819,878,254 1,777,993,324 2,276,991,615 2,270,755,715 82,182,927 3015 Environment, Waste Management and Energy 63,501,521 111,733,374 70,677,866 504,702,480 2,725,033,692 3016 Education, Information Technology & MV 2035 307,844,255 457,102,717 1,033,070,417 469,161,316 737,985,956 3017 Health Services 1,396,970,317 2,285,276,810 2,532,325,353 2,500,178,693 451,661,776 3018 Water, Sanitation & Natural Resources 612,064,144 492,269,532 73,447,595 95,072,297 3,202,514,740 3019 Youth, Gender, Sports & Cultural Affairs 138,261,355 189,016,828 369,715,814 323,768,818 68,288,562 3020 Trade, Tourism & Investment 330,004,554 289,892,019 186,241,760 212,092,539 280,429,106 3021 Lands, Housing & Physical Planning 144,036,335 323,902,738 185,971,683 276,249,787 486,468,460 3022 Transport & Infrastructure & Public Works 701,982,041 1,175,521,171 1,731,846,854 1,871,526,082 311,766,515 15 3023 Agriculture, Fisheries, Livestock & Cooperatives 158,579,193 110,007,203 116,645,971 194,126,312 2,017,723,065 3026 Devolution & Public Service Administration 712,108,321 325,189,634 Total 6,658,199,125 8,030,404,957 8,914,398,116 9,804,552,129 1 2,677,498,932 GROWTH OF EXPENDITURE FROM 2014/15-2018/19 GROWTH OF EXPENDITURE FROM 2014/2015- 2018/2019 14,000,000,000 12,000,000,000 10,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 2,000,000,000 - 16 DETAILED REVENUE ANALYSIS 1. TOTAL EXCHEQUER ISSUES 2018-19 Revenue Item Annual Budgeted Total Receipt Percentage Equitable share 8,226,800,000 8,226,800,000 100 GRANTS Kenya Devolution Support Project 17-18 - IDA(WB)-KSDP LEVEL 1 49,809,062 0 0 Kenya Devolution Support Project 18-19 - IDA(WB)-KSDP LEVEL 1 53,333,725 0 0 259,416,946 0 Kenya Devolution Support Project- IDA(WB)-KSDP LEVEL II 0 CA-Fuel levy fund 216,604,479 255,997,699 118.2 Agriculture Sector Support Program II 30,697,405 6,937,481 22.6 Conditional Allocation for Rehabilitation of Youth Polytechnics 39,895,000 0 0 23,385,934 100 CA-User Fees Forgone 23,385,934 388,439,309 100 Level 5 H 388,439,306 0 DANIDA 17-18 8,254,082 0 DANIDA-UHDSP 27,337,500 27,337,500 100 Transforming Health Systems for Universal Care Project (World Bank- IDA) 50,000,000 27,473,711 54.9 Universal Health Care - 27,357,500 100 Water & Sanitation Development Program – World Bank Fund 600,000,000 0 0 Total Grants 1,487,756,492 988,988,577 66 Total Exchequer Issues 9,714,556,492 9,215,788,577 95 2. TOTAL LOCAL REVENUE COLLECTED 18-19 Q1 Q2 Q3 Q4 Cumulative amount Comparative amount FY2017/2018 Kshs Kshs Kshs Kshs Kshs Kshs RECEIPTS Other Property Income-Rates 71,258,943 62,163,698 695,111,756 234,142,425 1,062,676,822 733,030,703 Receipts from Administrative Fees and Charges 102,993,917 207,847,762 186,456,297 198,180,810 695,478,786 775,046,024 Business Permits / Cesses 256,525 33,627,718 336,529,726 146,470,039 516,884,008 500,628,593 Plot Rents 5,405,974 3,696,001 4,448,975 1,615,202 15,166,152 15,700,760 Market/Trade Centre fees 13,321,832 14,023,529 14,865,830 14,271,125 56,482,316 49,556,030 Vehicle Parking Fees 87,353,135 113,687,368 139,518,579 109,573,885 450,132,967 471,907,695 Housing 12,819,939 10,320,760 11,719,618 31,802,392 66,662,709 68,379,535 Other Education Related Fees 0 420,000 870,000 1,910,000 3,200,000 10,000 Environment and Conservancy Administration 1,301,500 14,713,535 59,658,345 34,829,372 110,502,752 104,808,921 Other Health and Sanitation Revenues 28,176 242,467,900 150,094,808 314,776,511 707,367,395 432,563,625 Fines Penalties and Forfeitures 3,903,075 3,588,220 6,492,250 6,060,102 20,043,647 16,802,511 TOTAL 298,643,016 706,556,491 1,605,766,184 1,093,631,863 3,704,597,554 3,168,434,397 17 MONTHLY DETAILED REVENUE ANALYSIS 2018-19 REVENUE. ANNUAL BUDGETED GRAND TOTALS. 2018-2019 2018-2019 % KSHS. KSHS. Collection COUNTY PLANNING, LAND AND HOUSING Land Rates Penalties 14,778,551 10,261,394 69.4% Land Rates Other Years 1,484,682,766 1,052,395,898 70.9% Administration Cost 28,127 19,530 69.4% Other Property Income 1,499,489,444 1,062,676,822 70.9% COUNTY EXECUTIVE 0 Document Search Fee 299,275 222,700 74.4% Sales of County's Minutes / Bylaws 1,440 1,000 69.4% COUNTY EXECUTIVE 0 Valuation & Survey Fees 3,802,152 3,130,000 82.3% Plot Transfer Fee 847,419 608,800 71.8% Consent to Sublease 221,072 153,500 69.4% Technical Division 21,469 14,907 69.4% Beacon Search pointing Fee 43,206 30,000 69.4% Survey Fee 1,119,610 796,144 71.1% Subdivision & Consolidation Fees 7,843,378 6,259,500 79.8% Change of User 2,678,789 1,900,000 70.9% Impounding charges 118,911 82,565 69.4% Dog Licenses 61,929 43,000 69.4% Storage Fee 420,909 381,500 90.6% Debts Clearance Certificate Fee 28,436 15,000 52.8% Refund of Over Payment 703,849 488,713 69.4% Consent to Charge Fee/Property certification Fee (Use as collateral) 144,741 100,500 69.4% Imprest 499,653 348,981 69.8% Other Property Charges 4,169,981 2,947,900 70.7% Sand, Gravel, and Ballast Extraction Fees 664,739,351 516,052,704 77.6% Incidental Charges 46,087 38,000 82.5% Tender Documents Sale 8,641 6,000 69.4% Hotel Levy 38,537,307 32,781,256 85.1% Social Hall Hire 1,861,182 1,394,300 74.9% Hire of County Grounds 460,867 390,000 84.6% Sewer Connection Charge 7,201 5,000 69.4% County Vehicles Hire 535,693 371,955 69.4% Fire Inspection Fees 22,813,054 17,198,000 75.4% Fire-Fighting Services 10,921,104 9,203,500 84.3% Land Scape Scheme 35,003,645 24,304,560 69.4% Buildings Plan Preparation Fee 3,144,005 2,261,920 71.9% Buildings Plan Approval Fee 90,739,814 73,100,381 80.6% 18 Demolition of Structures 1,154,327 846,500 73.3% Receipts from Administrative Fees and Charges 892,998,496 695,478,786 77.9% TRADE ENERGY AND UNDUSTRY 0 Business Permits, Current Year 663,974,944 515,554,408 77.6% Business Permits Late Payment Penalties, Current Year 0 0 Business Permits, Other Years (Including Penalties) 53,080,473 1,329,600 2.5% Business Subletting / Transfer Fee 0 0 Business Permits / Cesses 717,055,417 516,884,008 72.1% COUNTY PLANNING, LAND AND HOUSING 0 Plot Transfer Fee 0 13,600 100.0% Document Search Fee 4,321 3,000 69.4% Allottees Documents 38,096 26,452 69.4% Instalment Fee (HDD Scheme) 158,555 110,092 69.4% Annual Ground Rent (HDD Scheme) 3,203,084 2,297,904 71.7% Plots Charges (HDD Scheme) 17,759,922 12,696,354 71.5% Survey Fee 27,004 18,750 69.4% Plot Rents 21,190,982 15,166,152 71.6% 03020205 Mackinnon Market 0 Market Stalls Rent 3,218,939 2,235,050 69.4% 03020305 Makupa Market 0 Market Stalls Rent 1,689,754 1,173,270 69.4% 03020405 Mombasa Wholesale market 0 Market Entrance / Gate Fee 15,276,632 11,574,243 75.8% Market Stalls Rent (Rental store w/s mkt) 13,293,093 11,380,135 85.6% Off loading 3,018,744 2,319,848 76.8% Hawking Fee 26,831,352 19,993,940 74.5% 03020505 Magongo Market 0 Market Stalls Rent 1,163,041 807,550 69.4% 03020605 Likoni Open Air Market 0 Market Stalls Rent 299,275 207,800 69.4% 03020705 Port Tudor, Kongowea & Likoni Market 0 Market Stalls Rent 189,604 131,650 69.4% 03020805 Sega Market 0 Market Stalls Rent 1,888,690 1,311,400 69.4% 03020905 Chaani Open Air Market 0 Market Stalls Rent 1,456,627 1,011,400 69.4% 03021005 Mikindani Market 0 Market Stalls Rent 384,680 267,100 69.4% 03021105 Mwembe Tayari Market 0 Market Stalls Rent 1,664,673 1,155,855 69.4% 03021205 Kisauni Retail Stall Market 0 Market Stalls Rent 4,195,437 2,913,075 69.4% 19 Sales of Market Establishments 74,570,539 56,482,316 75.7% TRANSPORT, ROADS AND INFRASTRUCTURE 0 Drainage Certificate Charges 98,654 68,500 69.4% Road Cutting Application Fees 103,119 71,600 69.4% Other Vehicles Enclosed Park Fees (Cars, lorries, etc.) 1,440 1,200 Street Parking Fee 192,689,232 188,356,529 97.8% Towing Fee. 169,596 117,758 69.4% TLB Matatu Levy 236,995,094 180,738,810 76.3% Right of Way / Way Leave Fee (KPLN, Telkom, etc.) 116,025,925 80,763,570 69.6% Vehicle Parking Fees 546,083,062 450,117,967 82.4% COUNTY PLANNING, LAND AND HOUSING 0 Housing Estates Monthly Rent 62,109,103 66,662,709 107.3% Housing 62,109,103 66,662,709 107.3% WATER, ENVIRONMENT AND NATURAL RESOURCES 0 Sign Boards & Advertisement Fee 133,997,983 102,929,330 76.8% County Vehicle Hire 645,358 459,500 Horticulture Consultation Fee 306,044 239,200 78.2% Livestock Certificates 674,611 521,922 77.4% Livestock Permits 5,185 4,100 79.1% Slaughter Licenses 12,962 10,000 77.1% Vaccination (Dogs, Horses, Camels) 4,321 3,000 69.4% Dog Licenses 249,156 182,000 73.0% Cooperative Audit Charges 757,363 555,900 73.4% Cemeteries Charges 1,254,710 924,700 73.7% 07031405 Refuse Disposal (Nguu Tatu) 0 0 Garbage Dumping Fee 5,932,941 4,498,000 75.8% Refuse Collection Fee 243,395 169,000 Environment and Conservancy Administration 144,084,029 110,496,652 76.7% COUNTY EDUCATION 0 Inspection Schools for Registration 3,557,316 3,200,000 90.0% Other Education Related Fees 3,557,316 3,200,000 90.0% COUNTY HEALTH 0 Sundry Income 189,420,361 197,337,284 104.2% 07021305 Kongowea Health Centre 0 Premises Inspection Fees 566,411,054 510,030,111 90.0% 07023405 Maunguja Clinic 0 Other Health and Sanitation Revenues 755,831,415 707,367,395 93.6% COUNTY EXECUTIVE 0 Court Fines 21,042,017 16,940,777 80.5% Cash Bail 3,927,263 3,102,870 79.0% Fines Penalties and Forfeitures 24,969,280 20,043,647 80.3% COUNTY OWN REVENUE 4,741,939,084 3,704,597,554 78.1% 20 REVENUE ANALYSIS FOR 2018/19 FY 11. The County realized Kshs 3,704,597,554 being 78 percent of the budgeted local revenue of Kshs. 4,741,939,084. The total revenue collected was Kshs 13,360,488,591 being 93 percent of the total budgeted revenue of Kshs. 14,456,495,575 of which Kshs 9,714,556,492 was exchequer issues and Kshs 988,988,577 transfers from other National Government entities including budgeted grants and donor funding. Equitable National share amounted to Kshs 8,226,800,000 which was 100 percent of the County allocation. 12. The County has hit the highest in budget implementation at 93 percent which is a 2 percent increase from the previous financial year’s budget implementation. 13. The County received Donor Funding from DANIDA of Kshs. 27,337,500, Health Conditional Grants of Kshs. 388,439,309, Road Maintenance Levy Grant of Kshs. 255,997,699, World Bank-KDSP Level II, Kshs. 259,416,946, World Bank-THUSCP, Kshs. 27,473,711 and a Grant of Kshs. 6,937,481 for Agriculture Sector Support Program II. Expenditure 14. Total expenditure amounted to Ksh 13,360,488,591 against a target of Ksh 14,456,495,575 representing an under spending of Ksh 1,096,006,984. (or 7 percent deviation from the revised budget). The shortfall was attributed to lower absorption in both recurrent and development expenditures due to unrealized revenues. 15. Recurrent expenditure was 100% amounting 10.2 billion which comprised of personnel emoluments and operations and maintenance. 16. Development expenditure was Ksh 3.1 Billion compared to a target of Ksh 4.3 Billion. This represented an under-spending of approximately Ksh 1.2 Billion (or 28 percent deviation from the approved development expenditure). The underperformance in development expenditure was majorly contributed by lack of disbursement of the World Bank’s Water and Sanitation Grant of Ksh. 600 Million, unrealized local revenue and bureaucracy in procurement. 17. In arriving at the revenues and expenditures above, the cash basis was used and therefore uncollected revenues and pending bills were excluded. Overall Balance and Financing 18. Reflecting the above performance in revenue and expenditure, the County had a balanced budget both in expenditure and revenue with an absorption rate of 93 percent of the overall budget. 21 19. The County had a fiscal deficit of Kshs. 1.0 Billion to finance which was attributed to unrealized revenues. Implication of 2018/19 fiscal performance on the set financial objectives In the 2019 CFSP; 20. The performance in the FY 2018/19 has affected the financial objectives set out in the latest CFSP and the Budget for FY 2019/20 in the following ways: 21. The county will continuously look into ways of enhancing local revenue collection and achieving greater efficiency in terms of cost savings in recurrent expenditure to ensure priority is given to the development projects. 22. Maintaining a lean workforce will assist in checking the wage bill. This will create fiscal space for spending on the key county priorities especially in the social sectors and other development programmes. This will further provide adequate room for future countercyclical fiscal policy in the event of a shock. 23. Fiscal consolidation while ensuring that county resources are adequate to promote growth. The County Government is committed to a reduction in the recurrent expenditure to devote more resources to development. At least thirty percent of the total county revenue shall be used in the implementation of development projects. 24. In addition, the county will continue venturing in public private partnerships with potential local and foreign investors and other development partners to assist in development of the county. 25. While we expect the economy to remain resilient, our projections remain cautious. We expect the revenue growth to be on an upward trend in 2019/20 from all the revenue streams. 26. Notably is the fact that Departments have been taking measures to ensure that they prioritize projects and programs that they are able to implement in the short term which has increased the overall Departmental absorption rate and this trend should be maintained if not improved further. 22 27. Table 5 and 6 provides comparison between the updated Revenue Projections for the FY 2019/20 and in the medium term. Revenue Stream Projected 2019/20 Projected 2020/21 Projected 2021/22 135,010,218 158,760,729 Road maintenance fees 101,914,493 70,997,397 79,547,267 Advertisement income 66,664,188 582,537,360 595,664,228 Parking fees 550,035,581 109,801,083 115,291,137 Fire brigade & ambulance fees 94,572,460 813,186,722 898,346,058 949,263,361 Plot rent & related charges 19,358,612 20,326,543 26,342,870 101,927,203 116,023,563 129,324,741 Development control income 307,505,067 351,580,321 415,659,337 Structural Submission/Approval Fees 1,205,712,819 1,250,998,460 1,273,798,383 Land rates and related fees 69,208,993 72,815,535 78,956,312 Housing Estates Monthly Rent 30,772,128 32,310,735 48,926,271 Valuation & Survey Fees 1,734,484,823 1,844,055,157 1,973,007,914 7,000,000 8,250,000 9,512,500 Stadium & Other Playing Fields 10,400,000 12,820,000 14,261,000 Social halls hire 17,400,000 21,070,000 23,773,500 1,504,731 1,579,968 1,658,966 Legal department fees 5,630,146 5,911,654 6,207,236 General enforcement charges Court Fines 30,180,981 31,690,030 33,274,532 37,315,859 39,181,652 41,140,734 23,294,404 26,959,124 28,657,080 Hotel Levy 318,448,650 329,321,082 362,787,137 Sand, Gravel, and Ballast Extraction Fees 71,802,634 83,042,766 Market collection 67,431,080 659,043,850 675,996,042 Business permit fees 653,375,095 1,062,549,229 1,087,126,690 1,150,483,025 12,559,000 21,000,000 25,050,000 Registration of Child Care Facilities 12,559,000 21,000,000 25,050,000 23 Revenue Stream Projected 2019/20 Projected 2020/21 Projected 2021/22 4,300,000 5,100,000 9,205,000 Meat Inspection/Permit 5,700,000 6,570,000 6,748,500 Boat Operations 10,000,000 11,670,000 15,953,500 1,413,164 1,483,822 1,558,013 Tender Documents Sale 5,850,277 6,142,791 8,213,221 Financial related income 7,263,441 7,626,613 9,771,234 Clinic cost sharing charges & Other services 758,000,000 809,000,000 836,950,000 758,000,000 809,000,000 836,950,000 Total Local Revenue 4,452,759,072 4,739,076,170 5,025,393,268 24 Table 6: Updated Departmental Ceilings against CFSP'19 Projections, 2018/19-2021/22 DEPARTMENTS Actual Budget 2019/2020 Projected Projected 2018/2019 2020/2021 2021/2022 RECURRENT County Executive 359,522,059 363,392,288 403,392,288 419,527,980 County Assembly 682,989,659 658,054,009 658,054,009 684,376,169 Public Service Board 77,902,220 118,831,959 126,377,889 152,233,005 Finance & Economic Planning 2,165,655,494 979,521,955 999,830,859 1071,024,093 Environment, Waste Management and Energy 528,341,544 514,132,378 592,507,149 612,207,435 Education, Information Technology & MV 2035 397,535,735 541,519,644 661,158,345 695,604,679 Health Services 3,101,738,503 2,813,835,534 3,190,391,104 3,268,806,748 Water, Sanitation & Natural Resources 52,726,209 121,221,632 138,861,433 154,815,890 Youth, Gender, Sports and Cultural Affairs 187,973,874 270,276,893 294,469,482 310,248,261 Trade, Tourism & Investment 386,526,788 465,952,264 478,875,185 498,030,192 Lands, Housing and Physical Planning 127,393,238 220,154,262 236,776,432 246,247,489 Transport & Infrastructure 428,257,872 435,222,886 488,548,738 510,090,688 Agriculture, Fisheries, Livestock and Co-operatives 192,386,271 222,020,925 272,930,223 291,847,432 Devolution & Public Service Administration 1,565,043,995 1,015,434,944 996,155,411 1,014,078,519 TOTAL 10,253,993,461 8,739,571,572 9,538,328,547 9,929,138,581 DEPARTMENTS Actual 2018/2019 Budget Projected Projected 2019/2020 2020/2021 2021/2022 DEVELOPMENT County Executive 7,306,594 15,098,932 27,801,660 31,313,726 County Assembly - 25,773,748 47,604,698 49,508,886 Public Service Board 4,280,707 11,637,280 22,502,772 23,402,883 Finance & Economic Planning 559,378,197 749,954,639 440,537,693 462,159,201 Environment, Waste Management and Energy 209,644,412 428,372,081 520,706,965 523,135,244 Education, Information Technology & MV 2035 54,126,040 220,329,356 398,329,356 414,262,530 Health Services 100,776,236 231,641,776 271,641,776 294,507,447 Water, Sanitation & Natural Resources 15,562,353 1,550,000,000 479,225,704 494,394,732 Youth, Gender, Sports and Cultural Affairs 92,455,232 375,595,266 405,595,266 417,819,077 Trade, Tourism & Investment 99,941,671 151,056,936 241,056,936 246,699,213 Lands, Housing and Physical Planning 184,373,277 211,329,963 271,329,963 290,183,162 Transport & Infrastructure 1,589,465,194 657,445,281 943,294,922 973,026,719 25 Agriculture, Fisheries, Livestock and Co-operatives 132,803,363 211,015,626 271,015,626 281,856,251 Devolution & Public Service Administration 56,381,853 100,545,582 220,545,582 224,956,494 TOTAL 3,106,495,130 4,939,796,466 4,561,188,919 4,727,225,564 DEPARTMENTS Actual 2018/2019 Budget Projected 2020/2021 Projected 2019/2020 2021/2022 TOTAL County Executive 366,828,652 378,491,220 431,193,948 450,841,706 County Assembly 682,989,659 683,827,757 705,658,707 733,885,055 Public Service Board 82,182,927 130,469,239 148,880,661 175,635,888 Finance & Economic Planning 2,725,033,692 1,729,476,594 1,440,368,552 1,533,183,294 Environment, Waste Management and Energy 737,985,956 942,504,459 1,113,214,114 1,135,342,679 Education, Information Technology & MV 2035 451,661,776 761,849,000 1,059,487,701 1,109,867,209 Health Services 3,202,514,740 3,045,477,310 3,462,032,880 3,563,314,195 Water, Sanitation & Natural Resources 68,288,562 1,671,221,632 618,087,137 649,210,622 Youth, Gender, Sports and Cultural Affairs 280,429,106 645,872,159 700,064,748 728,067,338 Trade, Tourism & Investment 486,468,460 617,009,199 719,932,121 744,729,405 Lands, Housing and Physical Planning 311,766,515 431,484,225 508,106,395 536,430,651 Transport & Infrastructure 2,017,723,065 1,092,668,167 1,431,843,660 1,483,117,407 Agriculture, Fisheries, Livestock and Co-operatives 325,189,634 433,036,551 543,945,849 573,703,683 Devolution & Public Service Administration 1,621,225,848 1,115,980,526 1,216,700,993 1,239,035,013 TOTAL 13,360,488,591 13,679,368,038 14,099,517,466 14,656,364,145 26 Updated Expenditure Projections against CFSP'18 Projections, 2018/19- 2020/21 28. Given the above deviations, the revision in revenues and expenditures will be based on the revised assumptions contained in this CBROP and which will be firmed up in the context of the next CFSP. The CG will not deviate from the fiscal responsibility principles, but will make appropriate modification to the CFSP 2020, the financial objectives contained in the latest CFSP, to reflect the changed circumstances. 29. The County Government has updated its automated revenue collection systems in most sources to reduce leakages, improved efficiency and effectiveness and thus increase revenue collection. In addition, we also envisage stability in interest rates and exchange rates as a result of the National Government policies to promote access to credit for private sector and boost investments and consumption thus stimulating the County’s economic growth. 30. Domestically, the economy continues to be exposed to risks arising from adverse weather conditions until the mitigating measures of food security under “The Big Four” Plan are put in place. Additional risks could emanate from public expenditure pressures especially on the recurrent expenditures and ensuring that the projected revenue projections is achievable to aid in budget deficit reduction . 27 V. RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK 31. Kenya’s economic growth has remained strong and resilient even under emerging global challenges, supported by strong public and private sector investment and appropriate economic and financial policies. The broad-based economic growth has averaged 5.6 percent for the last five years outperforming the average growth rate of 4.7 percent in the period 2008 to 2012 and 4.6 percent in the period 2002 to 2007. 32. The rebound in economic activity in 2018 is a reflection of improved rains, better business sentiment and easing of political uncertainty. The economy grew by 6.0 percent in the third quarter of 2018 and 6.2 percent in the second quarter of 2018 up from 5.8 percent in the first quarter of 2018, averaging 6.0 percent in the first three quarters of 2018. Growth is projected at 6.0 percent in 2018 up from 4.9 percent in 2017. 33. In the third quarter of 2018, the economy grew by 6.0 percent compared to a growth of 4.7 percent in a similar quarter in 2017, mainly supported by improved weather conditions which led to increased agricultural production and agro processing activity in the manufacturing sector. In addition, this growth was supported by pickup in activities of accommodation and food services, electricity and water supply and construction sectors. 34. Services remained the main source of growth and expanded by 5.9 percent in the third quarter of 2018 compared to a growth of 5.6 percent in the same quarter in 2017. The service sector was supported by improved growth in accommodation and restaurant (16.0 percent), wholesale and retail trade (6.8 percent), transport and storage (5.4 percent) and financial and insurance (2.6 percent). Growth of activities in information and communication (9.1 percent) and real estate (5.8 percent) remained vibrant despite the slowdown relative to the same quarter in 2017. 35. Services contributed 3.1 percentage points to real GDP growth in the third quarter of 2018 largely supported by wholesale and retail trade (0.6 percentage points), Real Estate (0.5 percentage points) and Transport and storage (0.4 percentage points). 36. The performance of Industry improved to a growth of 5.1 percent in the third quarter of 2018 compared to a growth of 2.3 percent in the same quarter in 2017 following increased activities in the manufacturing, construction and electricity and water supply sectors. The recovery of the manufacturing sector was attributable to agro-processing activities that benefitted substantially from increased agricultural production. 28 37. The industry sector accounted for 0.9 percentage points to growth in the third quarter of 2018, largely driven by the construction and manufacturing sectors which contributed 0.4 percentage points and 0.3 percentage points, respectively. Recent Economic Developments 38. Growth in local revenue remained resilient, with the collection being realized in the last two quarters with the highest collection being in March and June. The Exchequer issues were steady throughout the financial year. 39. On the development front in infrastructure, the movement of goods and people around the country has been made cheaper and more effective through expansion of most roads, seaports and airports. On the Standard Gauge Railway (SGR), the Government completed the construction of Phase 1 (Mombasa - Nairobi) in 2017. The railway has significantly reduced transportation costs and eased the movement of people and goods from Nairobi to Mombasa, there has also been reduction in traffic congestion to and from the port area although unfortunately there has been some negative implications due to loss of livelihoods for most residents, transporters, clearing and forwarding agencies and container freight services who have had to close or relocate their businesses . 40. On the blue economy, the County Government targets to significantly expand fishing to 18,000 metric tonnes of fish annually from the current 2,500 metric tonnes. To facilitate the development of the blue economy, the Government has strengthened enforcement measures to curb illegal fishing activities along Kenya’s Indian Ocean territory by commissioning the Kenyan Coast Guards, suspending of the fishing licenses of all international trawlers operating in Kenya’s territorial waters until they comply with the local input requirement; continuous clean up of the ocean; and advocating for enhanced processing before export to improve value of fish and marine products and removal of structural bottlenecks in the sector. 41. In addition to the above measures, the Government will continue to develop industrial infrastructure such as Export Processing Zones (EPZs), Special Economic Zones (SEZs) and industrial parks across the country. More specifically the establishment of the Dongo Kundu SEZs and infrastructures. 42. The National Government in partnership with the County Government has embarked on the face- lifting and rehabilitation of the Mama Ngina sea front CBD facelift which will give the tourism sector a major boost and see Mombasa reclaiming its glory as a major tourism destination both locally and internationally. 29 Comparison of Local and Exchequer Issues 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 0 Local Revenue Exchequer Issues Total Monthly Revenue Growth in Revenue remains resilient but downside risks remain MONTHLY GRAPHICAL COMPARISON FOR LOCAL & EXCHEQUER ISSUES FOR THE FY 2014/15- 2018/19 Month LOCAL & LOCAL & LOCAL & LOCAL & LOCAL & EXCHEQUER EXCHEQUER ISSUES EXCHEQUER EXCHEQUER EXCHEQUER ISSUES 2014-15 2015-16 ISSUES 2016-17 ISSUES 2017-18 ISSUES 2018-19 July 107,993,724 138,888,662 78,327,409 726,919,531 91,417,758 August 687,653,187 569,934,955 1,155,330,121 79,974,633 562,614,570 September 540,354,170 123,410,370 614,169,921 572,245,325 663,072,153 October 118,510,601 1,072,735,887 666,800,635 91,999,794 936,888,254 November 471,021,588 639,916,751 722,067,323 1,087,117,176 1,023,583,115 December 592,447,889 632,492,033 631,961,413 931,127,740 1,185,688,810 January 746,732,473 787,407,998 799,675,647 1,084,658,019 1,381,624,607 February 304,617,946 648,325,175 303,286,028 885,758,740 1,217,967,692 March 1,326,042,828 320,614,826 1,003,791,146 1,390,148,888 745,066,240 April 588,638,411 1,112,119,278 847,054,039 755,912,531 1,988,001,486 May 997,341,675 1,331,613,343 1,316,671,337 1,078,311,363 262,880,622 June 959,935,772 1,305,827,907 1,008,792,061 3,337,376,949 2,861,280,642 30 LOCAL & EXCHEQUER ISSUES 2014-15 TO 2018-19 FYs 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 0 LOCAL & EXCHEQUER ISSUES 2014-15 LOCAL & EXCHEQUER ISSUES 2015-16 LOCAL & EXCHEQUER ISSUES 2016-17 LOCAL & EXCHEQUER ISSUES 2017-18 LOCAL & EXCHEQUER ISSUES 2018-19 GRANTS DISBURSED TO THE COUNTIES FROM 2013/14- 2017/18 FINANCIAL YEARS GRANTS DISBURSED TO THE COUNTY Grant Details 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 Total Level 5 Hospital Grant 209,605,198 402,910,857 369,942,197 388,439,306 388,439,306 1,759,336,864 Leasing of Medical Equipment Grant 35,125,117 35,823,495 7 0,948,612 - - User Fees Forgone 21,896,682 23,514,312 23,514,312 23,385,934 92,311,240 Free Maternal Health Care Grant 98,447,500 125,722,505 2 2 4,170,005 - - DANIDA 3,920,000 3,150,000 23,261,504 27,337,500 57,669,004 World Bank-KDSP Level I 49,809,062 49,809,062 World Bank KDSP Level II 259,416,946 259,416,946 World Bank – Health Grant 10,736,032 10,736,032 World Bank-IDA: Transforming Health 27,473,711 27,473,711 Systems for Universal Care Project Development of Youth Polytechnics 30,586,320 30,586,320 Agriculture Sector Support Program II 6,937,481 6,937,481 Road Maintenance Levy Grant 33,345,423 33,345,423 182,073,057 255,997,699 504,761,602 Total 213,525,198 591,725,579 591,497,932 708,419,593 988,988,577 3,094,156,879 31 43. Revenue in the second and third quarters was the highest in the FY 2018/19 and a major increase in the last month of the fourth quarter due to a massive exchequer release. In the third quarter in the three financial years there was a rise in revenue collection attributed highly by the renewal of the single business permits (SBP) and land rates. Macroeconomic Outlook and Policies Global Growth Outlook 44. Global growth is projected to remain steady and grow by 3.7 percent in 2018 and 2019. The leveling-off is driven by the recently announced trade measures, including the tariffs imposed on $200 billion of US imports from China, closure of output gaps in advanced economies, moderation in trade and investment, and a gradual tightening of financing conditions due to ongoing withdrawal of accommodative monetary policy in advanced economies. Global growth optimism is constrained by rising trade tensions likely to have a negative impact on confidence, asset prices, global trade and investments. 45. Among emerging markets and developing economies, growth is expected to stabilize at 4.7 percent in 2018 and 2019 reflecting offsetting developments as growth moderates to a sustainable pace in China, while it improves in India reflecting increased domestic demand. Higher oil prices have also lifted growth among fuel-exporting economies in sub-Saharan Africa and the Middle East. 46. Growth prospects for sub-Saharan Africa continue to strengthen. Growth is expected to improve from 2.7 percent in 2017 to 3.1 percent in 2018 and further to 3.8 percent in 2019, supported by a stronger global growth, higher commodity prices, improved capital market access and contained fiscal imbalances in many countries. However, downside risks may arise from uncertainties in the run up to the 2019 general elections in South Africa. 47. Growth in the East African Community (EAC) region is estimated to rise to 5.9 percent in 2018 from 5.3 percent in 2017. This growth is driven by a rebound in agricultural activity on the backdrop of favorable weather conditions and a pickup in private sector credit growth. In 2019, economic growth is projected to increase to 6.3 percent supported by a stable macroeconomic environment, ongoing infrastructure investments, and strong private consumption. 32 Monetary Policy Outlook 48. The Kenya Shilling exchange rate has continued to display relatively less volatility, compared to most sub - Saharan currencies. This stability reflects strong inflows from tea and horticulture exports, resilient diaspora remittances and improved receipts from services particularly tourism. 49. The Kenya Shilling exchange rate remained broadly stable and competitive against major international currencies. Against the dollar, the exchange rate has been relatively less volatile exchanging at Ksh 101.6 in January 2019 from Ksh102.9 in January 2018. Against the Euro and the Sterling pound, the Shilling also strengthened to Ksh 115.9 and Ksh 130.8 in January 2019 from Ksh 125.4 and Ksh 141.9 in January 2018, respectively. 50. Foreign exchange reserves have increased from around 3.0 months of import cover in 2003 to above 5.5 months of import cover in 2018. This fulfils the requirement to maintain at least 4 months of imports cover, and the EAC region’s convergence criteria of 4.5 months of imports cover and thus provide an adequate buffer against short term shocks in the foreign exchange market. 51. The close coordination of fiscal and monetary policies will continue delivering on price stability and reduction in cost of doing business in the country. Growth prospects 52. In the third quarter of 2018, the economy grew by 6.0 percent compared to a growth of 4.7 percent in a similar quarter in 2017, mainly supported by improved weather conditions which led to increased agricultural production and agro processing activity in the manufacturing sector. In addition, this growth was supported by pickup in activities of accommodation and food services, electricity and water supply and construction sectors. 53. Agriculture sector recovered and recorded growth of 5.2 percent in the third quarter of 2018 compared to a growth of 3.7 percent in a similar quarter of 2017, supported by improved weather conditions. This enabled the agriculture sector to contribute 1.0 percentage points to GDP growth in the third quarter of 2018 compared to 0.7 percentage points in the same period in 2017. 54. The Non-agricultural sector (service and industry) remained vibrant and grew by 5.8 percent in the third quarter of 2018 up from a growth of 5.1 percent in a similar quarter in 33 2017. It has the largest percentage points to real GDP growth at 4.0 percentage points in the third quarter of 2018, mainly supported by the service sector. 55. Services remained the main source of growth and expanded by 5.9 percent in the third quarter of 2018 compared to a growth of 5.6 percent in the same quarter of 2017. The service sector was supported by improved growth in accommodation and restaurant (16.0 percent), wholesale and retail trade (6.8 percent), transport and storage (5.4 percent) and financial and insurance (2.6 percent). Growth of activities in information and communication (9.1 percent) and real estate (5.8 percent) remained vibrant despite the slowdown relative to the same quarter in 2017. 56. Services contributed 3.1 percentage points to real GDP growth in the third quarter of 2018 largely supported by wholesale and retail trade (0.6 percentage points), Real Estate (0.5 percentage points) and Transport and storage (0.4 percentage points). 57. The performance of Industry improved to a growth of 5.1 percent in the third quarter of 2018 compared to a growth of 2.3 percent in the same quarter in 2017 following increased activities in the manufacturing, construction and electricity and water supply sectors. The recovery of the manufacturing sector was attributable to agro-processing activities that benefitted substantially from increased agricultural production. 58. Growth in the Electricity and Water supply remained vibrant driven by increased use of less input intensive sources of energy such as hydro generated electricity supported by sufficient rainfall, wind power and geothermal power generation coupled with growth of thermal generation. 59. The industry sector accounted for 0.9 percentage points of growth in the third quarter of 2018, largely driven by the construction and manufacturing sectors which contributed 0.4 percentage points and 0.3 percentage points, respectively. 60. Domestically, the county’s economy is exposed to risks; public expenditure pressures especially recurrent expenditures pose a fiscal risk and any inefficiency in spending government resources that may lower impact of development expenditure. 61. Improvement in the investment climate, security coupled with further structural and legal reforms are expected to improve competitiveness of the private sector, revamp tourism sector thus promote overall productivity in the economy and thus increase the County’s own revenue. 34 62. The CG recognizes that further stringent measures needs to be put in place to ensure scaling up of revenue collection and mobilization of resources and more efficient production structure. The CIDP 2018-22 has articulated key priority measures to accelerate growth, taking into account limited public resources and increased service delivery for improved livelihoods. Inflation Outlook 63. Inflation rate was highly volatile in the period 2008-2012 and averaged 10.6 percent compared to the period 2003-2007 when it averaged 8.5 percent. The sharp increase in inflation rate in the year 2008 to 2010 was occasioned by internal shocks (post-elections disruptions and unfavorable weather conditions) and external shocks (high crude oil prices and global financial crisis).The tightening of monetary policy, together with an easing in global food and fuel prices, saw the levels of inflation stabilize in 2012. 64. Inflation was low, stable and within the Government target range of 5+/-2.5 percent in the period 2013 to 2018 (averaging 6.4 percent) as a result of prudent monetary and fiscal policies. The inflationary pressure witnessed in 2017 due to drought that affected food prices eased in 2018 supported by improved weather conditions that resulted in lower food prices. 65. Month-on-month overall inflation declined to 4.7 percent in January 2019 from 5.7 percent in December 2018 and 4.8 percent in January 2018, owing to a decline in food prices particularly maize, sugar, beans and wheat flour following improved weather conditions and a decline in pump prices of petrol and diesel. 66. Kenya’s rate of inflation compares favorably with the rest of sub-Saharan African countries and especially its peers such as Nigeria and Ghana whose inflation rates were 11.4 percent and 9.4 percent, respectively in December 2018. 67. The Kenya Shilling exchange rate remained broadly stable and competitive against major international currencies. Against the dollar, the exchange rate has been relatively less volatile exchanging at Ksh 101.6 in January 2019 from Ksh 102.9 in January 2018. Against the Euro and the Sterling pound, the Shilling also strengthened to Ksh 115.9 and Ksh 130.8 in January 2019 from Ksh 125.4 and Ksh 141.9 in January 2018, respectively. 35 Medium Term Fiscal Framework 68. The County Government will continue to pursue prudent fiscal policy to assure stability. In addition, our fiscal policy objective will provide an avenue to support economic activity while allowing for sustainable public finances. As such, the CG is committed to a gradual reduction in the debts. This will help to bring down the debt-to-revenue ratio to well below 15 percent and contribute to reducing pressure in expenditure and to provide adequate cushion against unforeseen events. 69. Fiscal policy will continue to support County development economic activities while providing platform for the implementation of the CIDP within a context of sustainable public financing. Over the last one year, the County Government has reoriented expenditure towards priority programmes in Health, Youth, Gender and Sports, Education, Transport and Water Infrastructure and Lands under the medium-term expenditure framework (MTEF).This process will be strengthened in the FY 2019/20 by encouraging more private-sector engagement in order to build concrete public private Partnership in pursuit of new economic opportunities. 70. With respect to revenue, the CG will maintain a strong revenue effort at 20 percent of Revenue Growth over the medium term. Measures to achieve this effort include simplification of the Revenue codes in line with international best practices and improved fees and charges collection with enhanced administrative measures. In addition, the CG will rationalize existing fees and charges incentives, expand the income base and remove exemptions as envisaged in the Constitution. 71. On the expenditure side, the CG will continue with rationalization of expenditure to improve efficiency and reduce wastage. Expenditure management will be strengthened with implementation of the Integrated Financial Management Information System (IFMIS) across Departments. Above all, the new PFM Act, 2012 is expected to accelerate reforms in expenditure management system. 72. The county will continue reorienting expenditure towards those priority programmes as identified in public consultative forums. The critical programmes to be implemented are expected to accelerate economic activities and socio-economic development. 36 Risks to the Outlook 73. The main challenges that continue to be experienced relate to unrealized projected local revenue collection, bloated wage bill and huge pending bills some of which are statutory deductions that accrue huge interests. 74. The high wage bill continues to be a major challenge in the implementation of the budget. Currently in the 2018/19 financial year the personnel emoluments stand at 39% of the overall county budget which is 4% way above the statutory requirement of 35%. The recruitment of key essential staff and the frequent salary increment for various cadres of staff continues to increase the already bloated wage bill. The various collective bargaining agreements (CBAs) to increase salaries and benefits of various officers also continues to threat the already bloated wage bill. 75. The County’s major departmental restructuring in terms of personnel and functions continues to affect the Outlook. 76. Non timely disbursement of funds by the national government continues to be another challenge as this could lead to delay in execution of planned activities of the County thus compromising service delivery. 77. Looking ahead, due to revenue shortfalls, the ever-increasing pending bills and a high wage bill, continues to pose a threat of a budget deficit. Systems are being put in place to improve local revenue performance following revenue collection reforms and moderation in recurrent expenditure, so as to increase the revenue bases and the fiscal position in the medium term. 78. The Government will monitor the above risks and take appropriate measures to safeguard macroeconomic stability including preparation of supplementary budgets to regularize and align any emerging issues. 37 VI. RESOURCE ALLOCATION FRAMEWORK A. Adjustment to 2019/20 Budget 79. Given the performance in 2018/19 and the updated fiscal outlook, the risks to the FY 2019/20 budget include lack of realization of the projected local revenue which will hinder the full implementation of the budget. Expenditure pressures with respect to salary demands. 80. In addition, implementation pace in the spending units continues to be a source of concern especially with regard to the development expenditures and uptake of external resources. These risks will be monitored closely and the CG would take appropriate measures in the context of the Supplementary Budget. 81. Adjustments to the 2019/20 budget will take into account actual performance of expenditure so far and absorption capacity in the remainder of the financial year because of the resource constrains, the Government will rationalize expenditures by cutting those that are non-priority. These may include slowing down or reprioritizing development expenditures and increased budgeting for debt resolution. 82. Any review of salaries and benefits for the personnel continues to be conducted by the Salaries and Remunerations Commission (SRC) in accordance with Article 230 of the Constitution and Regulations. 83. On the Revenue side, the County Treasury is expected to institute corrective measures to curb the revenue leakages. Options could include enhanced compliance and automation. 84. Departments are expected to prioritize their expenditure and reallocate funds as per their expenditure during the preparation of the supplementary budget guided by the resource availability. B. Medium-Term Expenditure Framework 85. Going forward, and in view of the limited resources, MTEF budgeting will entail adjusting non-priority expenditures to cater for the priority sectors. In the Meantime, the resource allocation will be based on the Annual Development Plan and the Fiscal Strategy Paper. 86. The priority social sectors will continue to receive adequate resources in the budget and are required to utilize the allocated resources more efficiently to generate fiscal space to accommodate other strategic interventions in their sectors. 38 87. The county will continue reorienting expenditure towards those priority programmes outlined in County’s Integrated Development Plan 2018-2022 and as identified in public consultative forums. The strategy will thus implement the priority programmes/ projects as entailed in the draft CIDP 2018-2022. The critical programmes to be implemented are expected to stimulate the County’s socio-economic development. The key County proposed priority areas are; ➢ Increased accessibility to water and food security ➢ Investing in accessible and quality health services ➢ Streamlined waste management services ➢ Provision of Quality Education, Gender empowerment, Youth & Sports development ➢ Improved Land and Housing Services ➢ Investing in infrastructure development 88. The composition of expenditure will focus on productive capital projects and priority commitments, while protecting budgetary allocations to social sectors, namely; education, health and social protection. The FY 2020/21 MTEF Budget will therefore focus on the following; Employment creation and youth empowerment, improving infrastructure connectivity across the country; Enhancing social welfare programmes in health, education and social protection. The resources earmarked for strategic interventions in the areas of social welfare and youth empowerment will be ring-fenced over the medium term. 89. Reflecting the above medium-term expenditure framework, the tables below provides the tentative projected baseline ceilings for the 2020 MTEF, classified by Departments. 39 Medium Term Sector Ceiling 2018/19 - 2020/21, Ksh Million DEPARTMENTS Actual 2018/2019 Budget 2019/2020 Projected Projected 2 020/2021 2021/2022 RECURRENT County Executive 359,522,059 363,392,288 403,392,288 419,527,980 County Assembly 682,989,659 658,054,009 658,054,009 684,376,169 Public Service Board 77,902,220 118,831,959 126,377,889 152,233,005 Finance & Economic Planning 2,165,655,494 979,521,955 999,830,859 1071,024,093 Environment, Waste Management and Energy 528,341,544 514,132,378 592,507,149 612,207,435 Education, Information Technology & MV 2035 397,535,735 541,519,644 661,158,345 695,604,679 Health Services 3,101,738,503 2,813,835,534 3,190,391,104 3,268,806,748 Water, Sanitation & Natural Resources 52,726,209 121,221,632 138,861,433 154,815,890 Youth, Gender, Sports and Cultural Affairs 187,973,874 270,276,893 294,469,482 310,248,261 Trade, Tourism & Investment 386,526,788 465,952,264 478,875,185 498,030,192 Lands, Housing and Physical Planning 127,393,238 220,154,262 236,776,432 246,247,489 Transport & Infrastructure 428,257,872 435,222,886 488,548,738 510,090,688 Agriculture, Fisheries, Livestock and Co-operatives 192,386,271 222,020,925 272,930,223 291,847,432 Devolution & Public Service Administration 1,565,043,995 1,015,434,944 996,155,411 1,014,078,519 TOTAL 10,253,993,461 8,739,571,572 9,538,328,547 9,929,138,581 DEPARTMENTS Actual 2018/2019 Budget 2019/2020 Projected Projected 2 020/2021 2021/2022 DEVELOPMENT County Executive 7,306,594 15,098,932 27,801,660 31,313,726 County Assembly - 25,773,748 47,604,698 49,508,886 Public Service Board 4,280,707 11,637,280 22,502,772 23,402,883 Finance & Economic Planning 559,378,197 749,954,639 440,537,693 462,159,201 Environment, Waste Management and Energy 209,644,412 428,372,081 520,706,965 523,135,244 Education, Information Technology & MV 2035 54,126,040 220,329,356 398,329,356 414,262,530 Health Services 100,776,236 231,641,776 271,641,776 294,507,447 Water, Sanitation & Natural Resources 15,562,353 1,550,000,000 479,225,704 494,394,732 Youth, Gender, Sports and Cultural Affairs 92,455,232 375,595,266 405,595,266 417,819,077 Trade, Tourism & Investment 99,941,671 151,056,936 241,056,936 246,699,213 Lands, Housing and Physical Planning 184,373,277 211,329,963 271,329,963 290,183,162 Transport & Infrastructure 1,589,465,194 657,445,281 943,294,922 973,026,719 Agriculture, Fisheries, Livestock and Co-operatives 132,803,363 211,015,626 271,015,626 281,856,251 Devolution & Public Service Administration 56,381,853 100,545,582 220,545,582 224,956,494 TOTAL 3,106,495,130 4,939,796,466 4,561,188,919 4,727,225,564 40 DEPARTMENTS Actual 2018/2019 Budget 2019/2020 Projected Projected 2020/2021 2021/2022 TOTAL County Executive 366,828,652 378,491,220 431,193,948 450,841,706 County Assembly 682,989,659 683,827,757 705,658,707 733,885,055 Public Service Board 82,182,927 130,469,239 148,880,661 175,635,888 Finance & Economic Planning 2,725,033,692 1,729,476,594 1,440,368,552 1,533,183,294 Environment, Waste Management and Energy 737,985,956 942,504,459 1,113,214,114 1,135,342,679 Education, Information Technology & MV 2035 451,661,776 761,849,000 1,059,487,701 1,109,867,209 Health Services 3,202,514,740 3,045,477,310 3,462,032,880 3,563,314,195 Water, Sanitation & Natural Resources 68,288,562 1,671,221,632 618,087,137 649,210,622 Youth, Gender, Sports and Cultural Affairs 280,429,106 645,872,159 700,064,748 728,067,338 Trade, Tourism & Investment 486,468,460 617,009,199 719,932,121 744,729,405 Lands, Housing and Physical Planning 311,766,515 431,484,225 508,106,395 536,430,651 Transport & Infrastructure 2,017,723,065 1,092,668,167 1,431,843,660 1,483,117,407 Agriculture, Fisheries, Livestock and Co-operatives 325,189,634 433,036,551 543,945,849 573,703,683 Devolution & Public Service Administration 1,621,225,848 1,115,980,526 1,216,700,993 1,239,035,013 TOTAL 13,360,488,591 13,679,368,038 14,099,517,466 14,656,364,145 C. Departments Budgets and Programs Prioritization 90. A key challenge in developing the 2020/21 MTEF budget is the allocation of funds to departments. The departments have to manage their own funds and modality of reporting on timely basis instituted. 91. As such, it will be critical to have the CG Departments capacities continuously strengthened in order to enable them perform their assigned functions effectively and efficiently. The key technical Staff need to be deployed and rationalized to streamline the County activities. 92. Extensive work has been done in providing reporting templates and issuance of budget guidelines so as to ensure consistency in reporting and monitoring progress. 41 93. Operationalization of the Monitoring and evaluation unit in the Finance and Economic Planning Unit and linking up with the Service delivery unit will lead to a harmonized monitoring and evaluation system in the county. D. 2020/21 Budget Framework 94. The 2020/21 budget framework is set against the background of the updated medium-term macro-fiscal framework set out above. Revenue Projections 95. The 20/21 budget targets local revenue of Kshs 4.7 billion and National Government transfer of 9.4 billion. As noted above, this performance will be underpinned by on-going reforms in revenue policy and revenue administration. As such, total revenue including exchequer issues is expected to be Kshs 14.1 Billion. Expenditure Forecasts 96. In 2020/21, overall expenditures are projected to be 14.1 Billion 42 VII. CONCLUSION AND WAY FORWARD 97. The fiscal outcome for 2018/19 together with the updated forecast have had ramification of the financial objectives elaborated in the last CFSP 2019. 98. The FY 2020/2021 and the Medium-Term budget and fiscal framework projections presented in this CBROP takes into account the expected recovery in the global economy and risks facing our economy such as public expenditure pressures coupled and the County’s huge wage bill which continues to exert pressure on other expenditures. 99. As such, there is moderate growth in the overall revenue collection and a decline in overall recurrent expenditure as more resources are allocated to development projects. These measures take into account the need to maintain fiscal discipline in all levels of the government for maximum return from public resources. 100. The set of policies outlined in this CBROP reflect the changed circumstances and are broadly in line with the fiscal responsibility principles outlined in the PFM law. They are also consistent with the national strategic objectives pursued by the Government as a basis of allocation of public resources especially the “Big Four” Agenda. 101. The policies ensures continuity in resource allocation based on prioritized programs that have been earmarked by the government to accelerate growth, employment creation and poverty reduction. 102. The fiscal outlook presented herein will seek to achieve the objectives outlined in the PFM Act and lay ground for the next financial year in terms of preparing the CBROP and CFSP. Fiscal discipline will be important in ensuring proper management of funds and delivery of expected output. Effective and efficient utilization of funds especially on capacity building on different sectors of the county will be crucial in ensuring that the County gets to deliver on its functions. 103. Another area worth mentioning is the complexity in the operationalization of IFMIS exacerbated by inadequate human capacity and computer hardware to support the systems. 43 Indeed, Mombasa County continued experiencing a constant downtime for IFMIS during the period under review. To solve these challenges, critical user divisions will be given an on- the-job training and the County will continuously invest in upgrading our systems to boost connection. 104. The policies and sector ceilings annexed herewith will guide the Departments in preparation of the 2020/21 budget. The CG should endeavor in the preparation of realistic budget’s while progressively expanding its revenue base. The ceilings will form inputs into the next County Fiscal Strategy Paper (CFSP) which will be finalized by February 2020. 44 ANNEXES ANNEX 1. COMPARISON OF EXCHEQUER ISSUES AND LOCAL REVENUE COLLECTION BY ON MONTHLY BASIS 2018-2019. Month Local Revenue Exchequer Issues July 91,417,758 0 August 131,852,605 430,761,965 September 75,372,653 587,699,500 October 195,706,353 741,181,901 November 147,841,146 875,741,969 December 363,008,810 822,680,000 January 437,327,591 944,297,016 February 423,072,353 794,895,339 March 745,066,240 0 April 472,840,320 1,515,161,166 May 208,729,502 54,151,120 June 412,062,041 2,449,218,601 Total 3,704,297,372 9,215,788,577 To compare Revenue collection between two major sources ANNEX 2: COMPARISON OF LOCAL REVENUE BETWEEN FY 2014/2015 TO FY 2018/2019 MONTH 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 JULY 104,030,972 138,888,662 78,327,409 128,948,779 91,417,758 AUGUST 93,759,799 121,870,568 138,978,980 79,974,633 131,852,605 SEPTEMBER 95,400,916 123,410,370 134,037,320 98,958,707 75,372,653 OCTOBER 116,757,916 115,703,161 160,474,776 91,999,794 195,706,353 NOVEMBER 102,318,612 122,057,894 183,999,072 90,326,887 147,841,146 DECEMBER 191,916,082 115,254,598 151,828,812 88,025,962 363,008,810 JANUARY 336,767,628 337,339,057 321,392,757 218,656,932 437,327,591 FEBRUARY 346,773,579 200,260,788 303,286,028 202,052,628 423,072,353 MARCH 413,101,785 308,215,252 469,422,317 677,958,599 745,066,240 APRIL 211,331,816 612,075,951 365,071,728 677,126,092 472,840,320 MAY 143,751,841 376,582,733 328,912,588 254,091,979 208,729,502 JUNE 335,744,384 371,871,652 530,509,174 551,010,104 412,062,041 TOTAL 2,491,655,330 2,943,530,686 3,166,240,961 3,168,013,709 3,704,297,372 To Compare Local Revenue between five fiscal years 45 ANNEX 3: COMPUTATION OF MONTHLY LOCAL AND EXCHEQUER ISSUES FOR 2018/2019 FY Month Local Revenue Exchequer Issues Total Monthly Revenue July 91,417,758 0 91,417,758 August 131,852,605 430,761,965 562,614,570 September 75,372,653 587,699,500 663,072,153 October 195,706,353 741,181,901 936,888,254 November 147,841,146 875,741,969 1,023,583,115 December 363,008,810 822,680,000 1,185,688,810 January 437,327,591 944,297,016 1,381,624,607 February 423,072,353 794,895,339 1,217,967,692 March 745,066,240 0 745,066,240 April 472,840,320 1,515,161,166 1,988,001,486 May 208,729,502 54,151,120 262,880,622 June 412,062,041 2,449,218,601 2,861,280,642 Total 3,704,297,372 9,215,788,577 12,920,085,949 To compare total monthly revenue 46