Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning COUNTY GOVERNMENT OF SIAYA DEPARTMENT OF FINANCE AND ECONOMIC PLANNING BUDGET REVIEW AND OUTLOOK PAPER FOR FY 2017/2018 SEPTEMBER 2018 ‘Transforming the county economy through infrastructure and socio-economic development” i | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning ii | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Table of Content Table of Content .............................................................................................................................. iii List of Tables .................................................................................................................................... iv Acronyms and Abbreviations ............................................................................................................ v Foreword .......................................................................................................................................... vi Acknowledgement ...........................................................................................................................vii Legal Basis for Budget Review and Outlook Paper ......................................................................... viii Chapter One ...................................................................................................................................... 1 Introduction ...................................................................................................................................... 1 Objective of the 2018 County Budget Review and Outlook Paper (CBROP) .................................... 1 Fiscal Responsibility Principles .......................................................................................................... 1 Review of FY 2017/18 Fiscal Performance ........................................................................................ 2 Revenue ............................................................................................................................................ 2 Supplementary Budgets .................................................................................................................... 2 Receipts ............................................................................................................................................. 5 Expenditure ..................................................................................................................................... 10 Chapter Two .................................................................................................................................... 14 Recent Economic Developments and Outlook ............................................................................... 14 Recent Economic Development ...................................................................................................... 14 Fiscal Outlook .................................................................................................................................. 17 Chapter Three ................................................................................................................................. 19 Review of Fiscal Performance against Fiscal Strategy Paper 2017 ................................................. 19 Chapter Four ................................................................................................................................... 23 Resource Allocation Framework ..................................................................................................... 23 3.1 Adjustments to the FY 2018/19 Budget .............................................................................. 23 4.2 Medium Term Fiscal Projections ......................................................................................... 23 iii | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning 4.3 Budget Framework for FY 2019/20 ..................................................................................... 24 List of Tables Table 1: Approved Original Budget and Supplementary .................................................................. 3 Table 2: Approved Recurrent Expenditure after Supplementary ...................................................... 3 List of Figures Figure 1: Total Budget and Supplementary Analysis ....................................................................... 3 Figure 2: Recurrent Expenditure after Supplementary ..................................................................... 4 Figure 3: Development Expenditure after Supplementary................................................................ 5 Figure 4: Performance of Revenue sources ...................................................................................... 6 Figure 5: Revenue performance ....................................................................................................... 7 Figure 6: Performance of Equitable share ........................................................................................ 7 iv | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Acronyms and Abbreviations BROP Budget Review and Outlook Paper OSR Own Source Revenue MTEF Medium Term Expenditure Framework FSP Fiscal Strategy Paper KDSP Kenya Devolution Support Project CRF County Revenue Fund PLDW People Living with Disabilities GDP Gross Domestic Product CBR Central Bank Rate SGR Standard Gauge Railway RMLF Road Maintenance Levy Fund ASDSP Agriculture Sector Development Support Project FY Financial Year ICT Information Communication Technology DANIDA Danish Development Agency PFMA Public Finance Management Act CECM County Executive Committee Member v | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Foreword A review of organizational performance at the end of an operating year is a critical managerial concept. It provides an opportunity to reflect on the successes, failures and challenges experienced during the year as well as draw lessons from the challenges to inform future programming and project implementation. The BROP affords such an opportunity to government entities of which the County Government of Siaya is one. This BROP gives a detailed analysis of actual fiscal performance of the County Government of Siaya for FY 2017/18 against the approved budgetary allocations for the said FY. From the analysis, overall absorption rate for FY 2017/18 was 66.8 percent a declined by 12.2 percent from the previous fiscal year which had an absorption rate of 89 percent. Absorption rate of development budget was 11 percent of the total budget a decline from 62.7 percent for FY 2016/17. For recurrent expenditure absorption rate was 55.4 percent a decline from FY 2016/17 which was 110 percent. Local revenue collection realized 47 percent performance compared to 64 percent performance in the FY 2016/17 The low rate of absorption both for recurrent and development expenditure was attributed to the prolonged political tension after the 2017 general elections which caused disruption of business activities, inadequacy in county legislations hindered collection of revenue from other potential streams of revenue especially liquor licensing. Besides, stringent conditionalities imposed by the national treasury to access funds slowed down implementation of key programmes and projects. Going forward the county government will focus on revenue enhancement measures, fast- track implementation of development projects to minimize on project roll-overs, scale down on micro green field projects in favour of macro- projects which have high impact on the citizenry and are transformative in nature. Focus will also be directed towards operationalization of already completed facilities in all sectors. ________________________________ Joseph O. Warega CECM-Finance and Economic Planning vi | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Acknowledgement The BROP not only presents government entities with an opportunity to review performance of a fiscal year but also sets in motion the process of preparing the budget for the following year by providing an outlook for the coming year and setting departmental MTEF ceilings to guide budget making. Overall performance in OSR for FY 2017/18 significantly declined from Kshs. 172,822,681 to Kshs. 127,729,540 representing 26.1 percent drop from the previous fiscal year 2016/17. This drop was attributed to prolonged political tension after the 2017 general elections caused disruption of business activities, high charges leading to low levels of compliance, weak enforcement capacity, poor infrastructure limiting provision of utility services in some markets and inadequacy in county legislations hindered collection of revenue from liquor licensing. The preparation and subsequent submission of this document was made possible by a team of dedicated officers who traded off their invaluable time to ensure a quality production. I wish to salute all of them for a job well done. It is my hope that lessons drawn from implementation of the 2017/18 budget will inform future programming and project implementation as we endeavor to ‘Transform the county economy through infrastructure and socio-economic development”. _________________________ Hezbon Kadullo Mariwa Chief Officer – Finance and Economic Planning vii | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Legal Basis for Budget Review and Outlook Paper The preparation of the Budget Review and Outlook Paper is provided for under section 118 of the Public Finance Management Act, 2012 which states that: (1) A County Treasury shall — a) Prepare a County Budget Review and Outlook Paper in respect of the county for each financial year; and b) Submit the paper to the County Executive Committee by the 30th September of that year. (2) In preparing its county Budget Review and Outlook Paper, the County Treasury shall specify— (a) The details of the actual fiscal performance in the previous year compared to the budget appropriation for that year; (b) The updated economic and financial forecasts with sufficient information to show changes from the forecasts in the most recent County Fiscal Strategy Paper; (c) Information on— (i) Any changes in the forecasts compared with the County Fiscal Strategy Paper; or (ii) How actual financial performance for the previous financial year may have affected compliance with the fiscal responsibility principles, or the financial objectives in the County Fiscal Strategy Paper for that financial year; and (d) Reasons for any deviation from the financial objectives in the County Fiscal Strategy Paper together with proposals to address the deviation and the time estimated for doing so. (3) The County Executive Committee shall consider the County Budget Review and Outlook Paper with a view to approving it, with or without amendments, within fourteen days after its submission. (4) Not later than seven days after the County Budget Review and Outlook Paper is approved by the County Executive Committee, the County Treasury shall— (a) Arrange for the Paper to be laid before the County Assembly; and (b) as soon as practicable after having done so, publish and publicise the Paper viii | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Chapter One Introduction Objective of the 2018 County Budget Review and Outlook Paper (CBROP) The BROP is one among the various documents prepared by the county government in any fiscal year. These documents are outlined in the PFM Act and are instrumental in linking policy, planning, budget making and execution in respective fiscal years and the medium term. The objective of the 2018 (CBROP) is to provide a review of fiscal performance for the FY 2017/18 and how this performance impacts on the financial objectives and fiscal responsibility principles set out in the 2018 Fiscal Strategy Paper (FSP). This together with updated macroeconomic developments and outlook provides a basis for revision of the 2018/19 budget in the context of Supplementary Estimates. Further, the document provides highlights of recent economic developments and outlook and sets sectoral ceilings for FY 2019/20 and the medium term. Fiscal Responsibility Principles Fiscal responsibility principles governing management of public finances are provided for under Section 107 of the Public Finance Management (PFM) Act, 2012. These principles are as listed below: 1. The County government’s recurrent expenditure shall not exceed the county government’s total revenue. 2. Over the medium term a minimum of thirty per cent of the County government’s budget shall be allocated to the development expenditure. 3. The County government’s expenditure on wages and benefits for public officers shall not exceed a percentage of the County government’s total revenue as prescribed by the County Executive Member Finance regulations and approved by the County Assembly. 4. Over the medium term, the County government’s borrowings shall be used only for 1 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning the purpose of financing development expenditure and not for recurrent expenditure 5. The County debt shall be maintained at a sustainable level as approved by county assembly 6. Fiscal risks shall be managed prudently 7. A reasonable degree of predictability with respect to the level of tax rates and tax bases shall be maintained, considering any tax reforms that may be made in the future Review of FY 2017/18 Fiscal Performance Revenue The total resource envelope for FY 2017/18 was Ksh 6,845,341,860 comprising Ksh 270,000,000 OSR, Ksh 5,526,600,000 equitable share, Ksh 499,123,042 value of projects brought forward from 2016/17 FY and Ks h 549,618,818 conditional allocations. Conditional allocations consisted of Ksh 18,194,808 Compensation for User Fee Forgone, Ksh 95,744,681 Leasing of Medical Equipment, Ksh 212,834,314 Road Maintenance Levy Fund, Ksh 39,021,230 Universal Health Care Project, Ksh 23,075,979 DANIDA, Ksh 43,031,378 Kenya Devolution Support Project (KDSP), other loans and grants Ksh 63,669,291, Agricultural Sector Development Support Project (ASDSP) Ksh 13,400,000 and development of youth polytechnics Ksh 40,647,137 Supplementary Budgets During the period, one supplementary budget was prepared in December 2017. This was necessitated by the need to bring down the equitable share from Ksh 5,777,164,456 to Ksh 5,526,600,000 in line with County Allocation of Revenue Act (CARA) 2017, roll over projects equivalent to Ksh 499,123,042 which had not been concluded by the close of FY 2016/17, reverse Ksh 128,080,400 from the budget in line with the CARA 2017, provide for Ksh 40,647,137 for development of youth polytechnics, increase Allocations for Road Maintenance Levy Fund (RMLF), Universal Health Care Project (UHCP), loans and grants and DANIDA by Ksh 61,634,314, Ksh 21,284,308, Ksh 11,156,260 and Ksh 7,211,243 respectively in line with CARA 2017 and reduce Allocations for compensation for user fee foregone and Kenya Devolution Support Project (KDSP) by Ksh 1,439,269 2 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning and Ksh 14,078,826 respectively. The net effect of the supplementary budget was therefore an increase in the resource envelope from Ksh 6,598,448,507 to Ksh 6,845,341,860 as tabulated below: Table 1: Approved Original Budget and Supplementary Supplementary Original Deviation Vote Details estimates (A) estimates (B) (A-B) County Assembly 893,344,218 868,619,878 24,724,340 County Executive 556,875,343 552,102,186 4,773,157 Finance, Planning and Vision 2030 692,905,643 734,332,267 - 41,426,624 Agriculture, Livestock & Fisheries 415,172,583 397,625,222 17,547,361 Water, Environment & Natural Resources 312,940,581 290,304,111 22,636,470 Education, Youth Affairs, Sports & Social Services 792,394,093 582,599,677 209,794,416 Health Services 1,914,333,565 2,070,006,772 - 155,673,207 Lands, Housing, Physical Planning & Survey 81,916,108 98,966,260 - 17,050,152 Trade, Industry and Cooperative Development 202,245,619 110,780,764 91,464,855 Tourism and ICT 108,016,464 125,339,878 - 17,323,414 Roads, Transport & Public Works 875,197,643 767,771,492 107,426,151 Total 6,845,341,860 6,598,448,507 246,893,353 Source: 2017/18 Budget Figure 1: Total Budget and Supplementary Analysis Recurrent budget reduced by Ksh 319,860,763 as a result of the supplementary budget as tabulated below: Table 2: Approved Recurrent Expenditure after Supplementary Supplementary Original Deviation (A- Vote Details Estimates (A) Estimates (B) B) County Assembly 592,664,559 692,664,559 - 100,000,000 County Executive 552,102,186 552,102,186 - Finance, Planning and Vision 2030 669,433,003 699,332,267 - 29,899,264 Agriculture, Livestock & Fisheries 267,560,107 282,451,455 - 14,891,348 3 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Supplementary Original Deviation (A- Vote Details Estimates (A) Estimates (B) B) Water, Environment & Natural Resources 98,588,805 104,605,966 - 6,017,161 Education, Youth Affairs, Sports & Social Services 328,172,190 333,262,188 - 5,089,998 Health Services 1,549,709,955 1,687,394,083 - 137,684,128 Lands, Housing, Physical Planning & Survey 50,568,108 60,125,118 - 9,557,010 Trade, Industry and Cooperative Development 48,161,096 51,822,382 - 3,661,286 Tourism and ICT 52,244,424 59,339,878 - 7,095,454 Roads, Transport & Public Works 89,848,759 95,813,873 - 5,965,114 Total 4,299,053,192 4,618,913,955 - 319,860,763 Source: 2017/18 Budget Figure 2: Recurrent Expenditure after Supplementary The supplementary budget increased the allocation to development projects by Ksh 566,754,116 as shown in the table and graphical illustration below: Table 3:Approved Development Expenditure after Supplementary Total Supp Original Vote Details Deviation (A-B) Estimates (A) Estimates (B) County Assembly 300,679,659 175,955,319 124,724,340 County Executive 4,773,157 4,773,157 Finance, Planning and Vision 2030 23,472,640 35,000,000 -11,527,360 Agriculture, Livestock & Fisheries 153,112,476 115,173,767 37,938,709 Water, Environment & Natural Resources 218,951,776 185,698,145 33,253,631 Education, Youth Affairs, Sports & Social Services 415,721,903 249,337,489 166,384,414 Health Services 364,623,610 382,612,689 -17,989,079 Lands, Housing, Physical Planning & Survey 31,348,000 38,841,142 -7,493,142 Trade, Industry and Cooperative Development 154,084,523 58,958,382 95,126,141 Tourism and ICT 55,772,040 66,000,000 -10,227,960 Roads, Transport & Public Works 823,748,884 671,957,619 151,791,265 Total 2,546,288,668 1,979,534,552 566,754,116 Source: 2017/18 Budget 4 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Figure 3: Development Expenditure after Supplementary Receipts During the FY 2017/18, the County Government operations were funded from County Allocation of Revenue Act (CARA 2017) and OSR. The CARA constituted equitable share and conditional grants. The receipt from CARA was 97 percent of the total projection while the performance of OSR was 47 percent. Table 4 below shows the performance of the revenue sources Table 4: Performance of revenue sources Item Budget (Kshs.) Received (Kshs.) Deviation (Kshs.) CARA 6,076,218,818 5,874,329,546 201,889,272 Own Source Revenue 270,000,000 127,729,540 (OSR) 142,270,460 Total 6,346,218,818 6,002,059,086 344,159,732 5 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Figure 4: Performance of Revenue sources Table 5 below shows the cumulative budgeted and received figures in FY 2017/18. The cumulative figures comprise CARA (equitable share and conditional grants), OSR and roll over projects from FY 2016/17 worth Kshs. 499,123,042 Table 5: Analysis of Revenue Performance in FY 2017/18 Item Budget Received Deviation Equitable Share 5,526,600,000 5,526,600,000 - Conditional Grant 549,618,818 347,729,546 201,889,272 Own Source Revenue (OSR) 270,000,000 127,729,540 142,270,460 Sub-Total 6,346,218,818 6,002,059,086 344,159,732 Roll over from FY 2016/17 499,123,042 499,123,042 - Total 6,845,341,860 6,501,182,128 344,159,732 6 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Figure 5: Revenue performance Equitable Share In the FY 2017/18 the County projected a total receipt of Kshs. 5,526,600,000 from National government as equitable share and at the end of the fiscal year the total amount was received Table 6: Performance of Equitable Share Item Budget Received Equitable Share 5,526,600,000 5,526,600,000 Figure 6: Performance of Equitable share 7 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Conditional Grant The County expected a total of Kshs. 549,618,818 as conditional grants, however the actual receipts was Kshs. 347,729,546 representing 63.3 percent of the total expected receipt with a deviation of Kshs. 201, 889,273. The table 5 below shows budgeted and actual receipts of the grants Table 7: Approved Grants and Receipts Item Budget Receipt Deviation Compensation for User Fee Forgone, 18,194,808 19,057,306 -862,498 Leasing of Medical Equipment 95,744,681 - 95,744,681 Road Maintenance Levy Fund 212,834,314 212,834,315 - Universal Health Care Project 39,021,230 17,736,923 21,284,307 DANIDA 23,075,979 14,422,487 8,653,492 Kenya Devolution Support Project 43,031,378 43,031,378 - Other loans and grants 63,669,291 - 63,669,291 ASDSP 13,400,000 - 13,400,000 Development of youth polytechnics 40,647,137 40,647,137 - Total 549,618,818 347,729,546 201,889,273 Figure 7: Performance of Conditional grants Own Source Revenue (OSR) The County government targeted to collect Ksh 270,000,000 as OSR; however the actual collection stood at Kshs.127, 729,540 representing 47 percent performance. Table 5 below shows the breakdown of the local revenue performance 8 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Table 8: Local Revenue Projections and Actual Performance Budgeted Estimates Actual Collections % Revenue Item Deviation FY 2017-18 FY 2017-18 Deviation Parking Fees 22,950,000 12,548,515 10,401,485 45% Rates 21,802,500 1,694,295 20,108,205 92% Single Business Permits 40,500,000 32,326,603 8,173,397 20% Fish Cess& quarry 8,775,000 4,003,024 4,771,976 54% Plans Inspection 3,375,000 3,050,009 324,991 10% Advertising (Billboards) - Rent (County Houses, Market stalls, 15,038,730 3,374,214 11,664,516 County commercial buildings) 78% Tenant Purchase Scheme (TPS) - Market Fees 54,000,000 22,787,579 31,212,421 58% Mortuary Charges - Water Lease Fees - Hospital Fees 61,425,000 34,115,960 27,309,040 44% Other receipt not classified anywhere 32,008,770 4,323,204 27,685,566 86% Sundry debtors (Premium for property - allocation and ground rent) Licences 10,125,000 9,506,137 618,863 6% TOTAL 270,000,000 127,729,540 142,270,460 53% Source: County Treasury Table 6 below shows the comparative figures of various revenue streams for FY 2016-17 and FY 2017-18 and the deviation Table 9: Local Revenue Comparative Analysis Revenue Item Actual 2016-17(A) Actual 2017-18 (B) Deviation (B-A) % Deviation SBP 32,899,734 32,326,603 - 573,131 - 0.3 Market Fee 25,212,879 22,787,579 - 2,425,300 - 1.4 Bus Park/ parking Fee 15,713,913 12,548,515 - 3,165,398 - 1.8 Fish Cess and Quarry 4,916,775 4,003,024 - 913,751 - 0.5 Fee Tender Fee - - Plan Approval Fee 4,239,840 3,050,009 - 1,189,831 - 0.7 Transfer Fees 93,700 - 93,700 - 0.1 Miscellaneous Fee (Including other receipts 1,366,965 4,323,204 2,956,239 1.7 not classified anywhere) Plot Rates 3,533,177 1,694,295 - 1,838,882 - 1.1 Plot Rents 6,808,691 3,374,214 - 3,434,477 - 2.0 School Fees 50,100 - 50,100 - 0.0 Slaughter Fees 456,072 - 456,072 - 0.3 Ground/Stall Rent 4,470,832 - 4,470,832 - 2.6 Burial Fees 13,200 - 13,200 - 0.0 Sand Cess 511,192 - 511,192 - 0.3 CILOR - - Sugar Cess 100,000 - 100,000 - 0.1 Boda Boda Fee - - Health Department 60,547,082 34,115,960 - 26,431,122 - 15.3 Lands Department - - Agriculture 9,602,356 - 9,602,356 - 5.6 Trade 362,060 - 362,060 - 0.2 Roads, Public Works 1,924,113 - 1,924,113 - 1.1 9 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Revenue Item Actual 2016-17(A) Actual 2017-18 (B) Deviation (B-A) % Deviation Liquor license - - Education, Youth Affairs - - Licenses 9,506,137 9,506,137 5.5 Total 172,822,681 127,729,540 - 45,093,141 - 26.1 Source: County Treasury From the table 6 above the local revenue performance for FY 2017/18 declined by 26.1 from the previous fiscal year. This downward trend in revenue collection was attributed to the following factors: 1. Prolonged political tension after the 2017 general elections caused disruption of business activities. 2. High charges in Finance Act 2017 leading to low levels of compliance 3. Inadequacy in county legislations hindered collection of revenue from liquor licensing 4. Weak enforcement capacity 5. Poor infrastructure in some trading centres limiting provision of utility services Roll over from FY 2016/17-Unspent Funds in FY 2016/17 At the end of FY 2016/17 a total amount of Kshs. 499,123,042 was unspent and was rolled over to FY 2017/18 where the total amount was received by the County Government in the fiscal year under review Expenditure Total projected expenditure for the period under review was Ksh 6,845,341,860 which was to be incurred by all sectors towards implementation of their programmes and sub programmes. Departmental Budgeted Expenditure The table below shows programmes and sub-programmes planned for implementation by various sectors in FY 2017/18 Table 10: Sectoral Programmes and Allocations Sector Programme Estimates County assembly P. 1 Legislation and Representation 259,400,110 P. 2 Legislative Oversight 53,586,760 P. 3 General Administration, 580,357,348 Governance and Programme 1: County Executive Administration 192,860,485 public service Programme 2: Office of the Governor and Deputy 145,760,248 10 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Sector Programme Estimates Governor Programme 3: County Public Service Board 101,790,220 Programme 4: Coordination of devolved units 62,018,813 Programme 5: Human Capital Management 54,445,577 Programme 6: Disaster Management (Fire fight) - Finance, Planning P1: Financial services 173,288,961 and vision 2030 P2: Economic planning services 26,675,987 General Administration 492,940,695 Agriculture, Cp.1 General Administration, Planning and Support 53,483,115 livestock and Services fisheries Cp 2: Livestock Development and Management 74,978,169 Cp 3: Crop Management 197,320,458 Cp 4: Fisheries Management & Development 56,022,302 Cp 5: Veterinary Services 33,368,539 Water, Water Resources Development and Management 298,183,717 environment and Environmental and Natural Resources Conservation and 7,625,182 natural resources Management General Administration, planning and support services 7,131,682 Education, youth CP 1: General Administration, planning and support 108,115,656 affairs, gender and services social services CP 2: County pre-primary education 390,435,281 CP 3: Vocational Education and Training development 123,897,500 CP 4: County social security and services 37,716,476 CP 5: Sports and Talents Development 132,229,181 Health services Programme 1: General Administration 849,481,035 Programme 2: Curative Services 655,808,376 Programme Preventive and Promotive 376,806,154 Programme 4: waste Management 32,238,000 Lands, physical C P 1: General Administration, Planning and Support 44,264,169 planning and Services housing CP 2: Physical planning 21,966,872 CP. 3. Land surveying and mapping 13,523,986 Cp 4. Housing Development 2,161,082 Programme 1: - Trade Development and Promotion 114,581,669 Trade, industry Programme 2: - Fair Trade Practices and Consumer and cooperative 3,521,088 Protection Services development Programme 3: - Co-Operative Development & 46,252,816 Management Programme:4: - General Administration, Planning and 37,890,046 Support Services Programme 1: General Administration, planning and ICT and Tourism 41,690,018 support services Programme 2: Information & Communication Services 27,395,540 Programme 3: Tourism development and promotion 38,930,906 Works Programme 1: Transport Infrastructure Development 834,941,955 Programme 2: Fire Fighting - Programme 3: Street Lighting 2,550,000 11 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Sector Programme Estimates Programme 4: County Government Buildings Services 24,989,036 Programme 5: General Administration, Planning & 12,716,650 Support Service Total 6,845,341,860 Actual Expenditure Total expenditure for the period under review amounted to Ksh 4,573,191,295 comprising Kshs. 782,049,003 as development expenditure and Kshs. 3,791,142,292 as recurrent expenditure against a planned budget of Ksh 6,845,341,860 translating to an absorption rate of 66.8 percent of the total budget and 70.3 percent absorption of total funds received in the fiscal year. Table 11: Absorption rates based on Budget and Total Receipts Actual Total Receipts Actual Budget (Kshs.) Expenditure Absorption (Kshs.) Expenditure Absorption (Kshs.) rate (%) (Kshs.) rate (%) 6,845,341,860 4,573,191,295 66.8 6,501,182,128 4,573,191,295 70.3 Figure 8:Absorption rates Table 12: Absorption based on Economic classification % % Absorption Absorption Economic Budgeted Total Actual Deviations based on based on Classification Estimates Receipts Expenditure total total Budget Receipts Compensation 2,863,614,848 2,563,339,256 2,408,285,749 455,329,099 35.2 37.0 to employees 12 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Operations and 1,435,438,344 1,501,197,645 1,382,856,543 52,581,801 20.2 21.3 maintenance Total 4,299,053,192 4,064,536,901 3,791,142,292 507,910,900 55.4 58.3 Recurrent Development 2,546,288,668 2,436,645,227 782,049,003 1,764,239,665 11.4 12.0 Total 6,845,341,860 6,501,182,128 4,573,191,295 2,272,150,565 66.8 70.3 Source: County Treasury Recurrent Expenditure Analysis Total recurrent expenditure for the period under review was Ksh. 3,791,142,292 against a budget of Kshs. 4,299,053,192. This translating into absorption rate of 88.2 percent and 55.4 percent of allocation to the recurrent vote and total budget against an anticipated rate of 62.8 percent in the budget Personnel Emolument (PE) Expenditure Analysis Personnel Emoluments (PE) expenditure was Kshs. 2,408,285,749 against an allocation of Kshs. 2,863,614,848 translating to an absorption rate of 84.1 percent and 56 percent of budget allocated to PE item and total recurrent expenditure respectively. In addition based on total budget, the absorption rate for PE was 35.2 percent against an anticipated rate of 41.8 percent in the budget. Operations and Maintainance (O&M) Expenditure Analysis Operation and Maintainance expenditure for the period under review was Kshs.1,382,856,543 against a budget of Kshs. 1,435,438,344 translating to an absorption rate of 96.3 percent and 32.2 percent of the budget allocated to O&M item and total recurrent expenditure respectively. Besides an absorption rate of 20.2 percent was realized based on total budget against the anticipated rate of 20.9 percent in the budget. Development Expenditure Analysis Total development expenditure for the period under review was Ksh 782,049,003 against a planned budget of Ksh2,546,288,668 translating to an absorption rate of 30.7 percent and 12 percent of the total budget allocated to development expenditure and total receipts for the vote respectively in the said fiscal year. In addition 11.4 percent absorption rate of the total budget was realized against an anticipated rate of 37.2 percent in the budget of 13 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning the fiscal year under review. The low absorption of funds was as a result of the following factors; 1. Delayed release of funds by the National Treasury 2. Systemic bottlenecks resulting from end to end procurement process and internet banking 3. Limited capacity of contracted service providers Chapter Two Recent Economic Developments and Outlook Introduction The chapter outlines recent economic development focusing on the international and domestic scenes. Additionally, the chapter gives a summary of macroeconomic outlook expected to positively or negatively affect national and county socio-economic performance in the foreseeable future. Recent Economic Development International Scene The global economy expanded by 3.6 per cent in 2017 compared to a growth of 3.1 per cent in 2016. The United States of America registered a growth of 2.2 per cent in 2017 compared to a growth of 1.5 per cent in 2016, largely due to increase in household income that supported private consumption and investments. The growth in United Kingdom decelerated to 1.5 percent in 2017 due to a weaker aggregate demand and uncertainty surrounding the Brexit negotiations. In China, real Growth Domestic Product (GDP) was boosted by fiscal support and recovery in exports to grow by 6.8 per cent in 2017 compared to 6.7 per cent in 2016. Real GDP in Sub Saharan Africa expanded by 2.6 per cent in 2017, mainly due to higher commodity prices and favourable external environment. Global inflation rose to 3.1 per cent in 2017 from 2.8 per cent in 2016, partly attributable to increase in oil prices. World trade grew by 4.8 per cent in 2017 compared to 2.6 per cent in 2016 as a result of recovery 14 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning in global manufacturing occasioned by increased investments. Global unemployment rate stood at 5.6 per cent in 2017. (Economic Survey 2018) Domestic Economy Kenya’s economy is estimated to have expanded by 4.9 per cent in 2017 compared to a revised growth of 5.9 per cent in 2016. The slowdown in the performance of the county and national economy was partly attributable to uncertainty associated with a prolonged electioneering period coupled with adverse effects of weather conditions. Generally, key macroeconomic indicators largely remained stable and therefore supportive of growth in 2017. Interest rates declined due to the impact of capping that became effective in September 2016. In the money market, the Kenyan Shilling strengthened against most of the major trading currencies but weakened against the Euro and the US Dollar in 2017. There was a moderate build up in inflationary pressures mainly due to significant increase in oil and food prices during the year under review. Despite the stable and supportive macroeconomic environment, inflation rate rose from 6.3 per cent in 2016 to 8.0 per cent in 2017. Performance across the various sectors of the economy varied widely, with Accommodation and Food services; Information and Communication Technology; Education; Wholesale and Retail trade; and Public Administration registering accelerated growths in 2017 compared to 2016. On the other hand, growths in Manufacturing; Agriculture, Forestry and Fishing; and Financial and Insurance decelerated significantly over the same period and therefore dampened the overall growth in 2017. Sectorally, agricultural sector continued to be the major contributor of national economic growth. The sector recorded mixed performance in 2017 which led to a decelerated growth of 1.6 per cent compared to 5.1 per cent growth in 2016. This reduced growth is mainly attributed to drought coupled with pests such as the fall army worms and disease which led to the overall decline in agricultural production and threatened food security in the country and by extension the county. 15 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning In order to achieve food security and improved nutrition, the National Government shall invest in three broad areas starting 2018, namely: enhancing large-scale production; boosting smallholder productivity; and reducing the cost of food. The national government will also collaborate with County governments in ensuring that each county has at least one value addition processing plant. These measures will go a long way in scaling up agriculture value chain. Manufacturing sector which is also a key sector in national economy has shown a slowed growth recording a 0.2 per cent GDP contribution in 2017. The sector was negatively affected by uncertainties relating to General Elections, high production costs and competition from imported goods. The manufacturing sector is expected to benefit from BIG Four initiative which targets contribution of the sector share to GDP at 15 per cent by 2022. In order to realize these objectives, the Government will focus on areas where we have comparative advantage including leather, textiles and construction materials. To support this, various initiatives will be implemented that include: cutting the cost of off- peak power to heavy industry by half; reviewing work permit regime and encouraging expatriates whose skills support manufacturing sector; protecting local manufacturers from counterfeits goods; and creating an additional 1000 small and medium size enterprises (SMEs) focused on manufacturing which will have access to affordable capital, skills and markets. Other programmes lined up by the national Government include expansion of the infrastructure by extension of the SGR; building new roads and ports; and investing in health, education and housing in the medium term. These interventions will result in enhancing our human capital, creating employment for our youth; ensuring all citizens enjoy food security and proper nutrition; guarantee access to quality and affordable housing and health care to all Kenyans. With these interventions coupled with continuing political stability and favourable macroeconomic environment the national and county economy is expected to perform better in 2018. The on-going investments in infrastructure, improved business confidence, and strong private consumption are expected to support growth in 2018. 16 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Whereas there are no official statistics on county specific economic performance, the year 2017 witnessed increased investment in infrastructure projects by both national and county governments as well as private investors. The national government was active in improvement of major highways traversing the county. The county government was engaged in improvement of rural access roads, construction of new and upgrading of existing health facilities, development of early childhood education infrastructure among other projects. Increased demand for accommodation resulted in an upsurge in construction of commercial and residential houses across the various sub counties. On the demand side, increased inflow of resources into the county coupled with decision to award most county government projects to local contractors has improved the purchasing power of the citizenry. This is evidenced by the many retail outlets setting up shop in various parts of the county. Persistent drought during the end of 2017 and heightened political environment surrounding the 2017 general elections made the county government to refocus its priorities towards mitigating the adverse impacts of the drought while the private sector slowed down investment awaiting the outcome of the general elections. Fiscal Outlook Over the medium term, growth is projected to increase by more than 7.0 per cent due to investments in strategic areas under “The Big Four” Plan, namely: increasing the share of manufacturing sector to GDP; ensuring all citizens enjoy food security and improved nutrition by 2022; expanding universal health coverage; and delivering at least five hundred thousand (500,000) affordable housing units. These efforts will support the business environment, create jobs and ultimately promote broad based inclusive growth. Going forward, the county government shall champion inclusion of strategic initiatives in her development agenda that are Big Four compliant. County economy is likely to be influenced more by the domestic factors than external ones. These factors include dividends as a result of handshake between HE.Uhuru 17 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Kenyatta and Hon Raila A. Odinga; Investment in Lake Region Economic Block and Implementation of proposed PFM Reforms by the Finance Department. All these factors coupled with the radical cabinet changes and fresh blood in the County Assembly is expected to positively shape the county’s image in the medium term. Weather forecasts indicate that short rains are likely to delay and to be depressed in 2018, which is likely to have a direct negative impact on crops, production of livestock and its products, electricity generation and water supply. Due to the marginally high share of agricultural contribution to the GDP, there will be a lower rural demand for goods and services. The impacts could further be experienced in sectors that have strong inter-linkages with the agriculture industries. In addition increase in fuel prices as a result of introduction of 8 % VAT on petroleum products is likely to slow down growth in transport sector and subsequently lead to rise in inflation. Persistent delay in release of funds from the exchequer affected absorption rate and slowed down service delivery to the public. In the unlikely event of continued delay in release of funds, county’s fiscal environment is expected to remain unstable. In conclusion therefore economic activities will be influenced by increased private sector activity arising from the county governments continued investment in opening up of otherwise inaccessible areas and creating a conducive environment for private enterprise to thrive. 18 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Chapter Three Review of Fiscal Performance against Fiscal Strategy Paper 2017 Preparation of the 2017/18 budget was informed by the fiscal strategy paper of the said year. As such, programmes and projects captured in the budget were drawn from the fiscal strategy paper with minimal variations across all the sectors. The fiscal strategy paper was based on four broad pillars that guided allocation of resources to various sectors. These pillars and the various sectors that constitute them as well as priority programmes and projects in each sector are discussed below: Pillar1: Improved governance and administration through investment in devolution structures for effective service delivery. This pillar comprised the County Assembly, Governance and Administration, Finance and Economic Planning, Lands, Physical Planning Urban Development and Housing as well as Enterprise and Industrial Development sectors. This pillar had a proposed budget of Kshs. 2,501,395,298 in FSP while the revised budgetary allocation was Kshs. 2,427,286,931. This deviation was attributed to reduction in equitable share as captured in CARA 2017 County Assembly was allocated Ksh 704,914,472 for recurrent and development expenditures in the FSP. The revised budgetary allocation for this sector was however Ksh 893,344,218 for recurrent and development expenditure. The deviation in allocation was occasioned by inclusion of roll over expenditures which were not in the FSP. Priority in the fiscal year was on strengthening legislative, representative and oversight functions of the County Assembly members and capacity building of the staff. Governance and Administration sector was allocated Kshs. 551,294,743 in the FSP. Revised budgetary allocation was however Ksh 556,875,343 for both recurrent and development expenditure. The deviation in allocation was occasioned by inclusion of roll over expenditures of Kshs. 5,580,600 which was not in the FSP. Priority projects in the FSP included; implementation of Lake Region Economic Bloc (LREB), phased 19 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning construction of Sub-County Offices, civic education and public participation, however due to lack of proper legislation LREB and construction of sub-county offices were suspended and resources which were meant for these projects were redistributed in other key priority areas. Finance and Economic Planning was allocated Ksh 979,995,745 in the FSP. Final allocation in the budget was Ksh 692,905,643. The deviation was occasioned by transfer of some grants which were initially recorded in Finance to respective sectors during supplementary budget. Priority in the FSP was given to improvement of public financial management, project cycle management and construction of modern bus parks and parking bays. Funds for construction of bus parks and parking bays were however re- allocated during the supplementary budget to complete phase one of OSR automation which had been under budgeted for in the previous FY. Land, Physical Planning, Urban Development and Housing sector was allocated Ksh 103,642,694 in the FSP. This allocation was however reduced to Ksh 81,916,108 in the revised budget in line with reduction of equitable share. Priority projects were construction of housing units through public private partnership, maintainance of existing governmental buildings and building and equipping ABT centres in the 3 sub counties, spatial development planning, public land banking and preparation of valuation rolls. Enterprise and Industrial Development Sector was allocated Ksh 161,547,644 in FSP. This allocation was increased to Ksh 202,245,619 on account of rolled over projects. Flagship projects were; construction of modern markets at Ramba (Siaya), Yala and Bondo, establish a cooperative revolving fund and small and micro enterprise fund. PillarII: Social Transformation through investment in healthcare services, education, youth, culture and social services. This pillar consisted of Health, Education, Youth Affairs, Gender and Social Services and Water, Environment and Natural Resources sectors. This pillar had a proposed budget of Kshs. 2,537,150,308 in FSP while the revised budgetary allocation was Kshs. 3,019,668,239. This deviation was attributed to roll-over 20 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning projects from the previous fiscal year. Education, Youth Affairs, Gender and Social Services Sector was allocated Ksh 562,468,458 in the FSP. The allocation was increased in the revised budget to Ksh 792,394,093. The increase is attributed to inclusion of funds for projects rolled over from the previous fiscal year. Flagship projects for the sector were: construction of Siaya and Migwena stadia, establishment of funds for the special groups (Youths, Women and PLWDs) and improvement of ECDE infrastructure. Health and Sanitation sector was allocated Ksh 1,774,994,186 in the FSP. This allocation was increased to Ksh 1,914,333,565 in the revised budget on account of rolled over projects and other conditional allocations that were initially included in Finance budget. The sector focused on the completion of the Siaya County Referral Hospital, operationalization of existing health facilities by equipping, posting health officers to such facilities and procurement of drugs as well as non-pharmaceuticals. Water, Environment and Natural Resources sector was allocated Ksh 199,687,664 in the FSP. This allocation was increased to Ksh 312,940,581 in the final budget on account of rolled over projects. Projects of high priority were rehabilitation and augmentation of existing water supplies, irrigation infrastructure development, afforestation and beautification of Siaya and Bondo towns. Pillar III: Transforming Agricultural activities towards improved food security through Irrigation, mechanization and agro-inputs This pillar had a proposed budget of Kshs. 343,954,059 in FSP while the budgetary allocation was Kshs. 415,172,583. This deviation was attributed to roll-over projects from the previous fiscal year. This pillar comprised only one sector of Agriculture, Livestock, Fisheries and Veterinary services sector. The sector prioritized crop, livestock and fisheries production and management. In addition animal health improvement was also a priority. 21 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Pillar IV: Transforming County Infrastructure and Communication through Investment in road network and ICT services. This sector consisted of two sectors: Roads, Public Works and Transport and ICT and tourism sectors. This pillar had a proposed budget of Kshs. 1,102,735,716 in FSP while the revised budgetary allocation was Kshs. 983,214,107. The deviation was attributed to reduction in equitable share as captured in CARA 2017 Roads, Public Works, Energy and Transport sector was allocated Ksh 926,792,258 in FSP. This revised allocation was however reduced to Ksh 875,197,643 to bridge the budget deficit due to reduction in equitable share in CARA 2017. The sector prioritized Transport Infrastructure Development, Transport Management & Safety and Street Lighting with flagship projects being street lighting and construction of bridges. Tourism, Culture, Sports and Arts sector was allocated Ksh 175,943,458 in the FSP. The revised budgetary allocation was Ksh 108,016,464. The deviation was attributed to reduction in equitable share as captured in CARA 2017. Priority areas included Information & Communication Services, sports infrastructure development and Tourism development and promotion with flagship projects being software management policies; mass media services; and tourism product development and diversification. 22 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Chapter Four Resource Allocation Framework 3.1 Adjustments to the FY 2018/19 Budget The Medium Term Fiscal Framework (MTFF) for the FY2018/19 emphasizes on efficiency and effectiveness of public spending and improving revenue collection to ensure full budgetary funding, support rapid and inclusive economic growth and continued fiscal discipline. As preparations for the FY 2019/20 medium-term budget commence, it is worth noting that the implementation of the FY 2018/19 budget is experiencing challenges particularly on revenue collection and elevated expenditure pressures. The outturn for the FY 2017/18 indicates the need to review the projected revenues in FY2018/19 in order to take into account the lower than expected revenue performance in the base year As such the revenue forecasts for FY 2018/19 have been reviewed downwards to reflect outcome in FY 2017/18 and also taking into account the fiscal developments through end August 2018. Expenditure projections for FY2018/19 will be revised through a supplementary budget to accommodate some of these challenges through trade-offs and reallocations of the existing budgetary provisions supported by austerity measures instituted on less productive areas of spending across the sectors and development component of 2017/2018 budget that remained unabsorbed at the close of the financial year. 4.2 Medium Term Fiscal Projections Over the medium term, driven by continued reforms, OSR collection is expected to rise towards the targeted 275 million. Overall development expenditure as percentage of total expenditure is expected to rise as the government undertakes expenditure rationalization to improve productivity. 23 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning 4.3 Budget Framework for FY 2019/20 4.3.1 Revenue Projections: The FY 2019/20 budget will be financed by revenue from equitable share, OSR and conditional allocations from the national treasury and/or development partners. Equitable share is expected to increase from Kshs 6.03 billion in 2018/2019 to 6,70 and 7.44 in 2019/2020 and 2020/2021 respectively. OSR is expected to move from Kshs 275,000,000 in 2018/2019 to Kshs 302,500,000 and Kshs 332,750,000 in 2019/2020 and 2020/2021 respectively. However, conditional allocations are projected to stabilize at the 2018/19 allocations. The 2018/19 base year revenue streams and projections for FY 2019/20 are as summarised in the table below: Table 13: Revenue projections Department Source Estimates 2019/2020 2020/2021 2018/2019 Enterprise and Industrial Single Business Permit 40,500,000 44,550,000 49,005,000 Development Market Fees 54,000,000 59,400,000 65,340,000 Boda Boda Fees 4,725,000 5,197,500 5,717,250 Trade Income 749,250 824,175 906,593 Liquor License 15,125,000 16,637,500 18,301,250 Sub-Total 115,099,250 126,609,175 139,270,093 Roads, Public Works, Energy Bus Park 16,200,000 17,820,000 19,602,000 and Transport Plan Approval 675,000 742,500 816,750 Grader Hire - - P arking Fees 6,750,000 7,425,000 8,167,500 Sub-Total 23,625,000 25,987,500 28,586,250 Agriculture, Food, Livestock Fish Cess 8,775,000 9,652,500 10,617,750 and Fisheries Slaughter Fees - - CILOR 51,165 56,282 61,910 Sugar Cess 6,075,000 6,682,500 7,350,750 A griculture Income 11,475,000 12,622,500 13,884,750 Sub-Total 26,376,165 29,013,782 31,915,160 Lands, Physical Planning, Plan Approval 2,025,000 2,227,500 2,450,250 Urban Development and Transfer Fees 1,350,000 1,485,000 1,633,500 Housing Plot Rates 21,802,500 23,982,750 26,381,025 Plot Rents 7,965,000 8,761,500 9,637,650 Ground/Stall Rent 7,073,730 7,781,103 8,559,213 Burial Fees 41,580 45,738 50,312 S and Cess 1,620,000 1,782,000 1,960,200 Sub-Total 41,877,810 46,065,591 50,672,150 Health and Sanitation Plan Approval 675,000 742,500 816,750 Slaughter Fees 1,210,275 1,331,303 1,464,433 H ospital Fees 61,425,000 67,567,500 74,324,250 Sub-Total 63,310,275 69,641,303 76,605,433 Finance and Economic Miscellaneous 4,374,000 4,811,400 5,292,540 Planning Sub-Total 4,374,000 4,811,400 5,292,540 24 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning Education, Youth Affairs, School Fees 337,500 371,250 408,375 Gender and Social Services Sub-Total 337,500 371,250 408,375 Total for Local Revenue 275,000,000 302,500,000 332,750,000 Equitable Share 6,028,800,000 6,702,059,119 7,442,644,151 Conditional Grants 703,791,194 703,791,194 703,791,194 Total Revenue 7,007,591,194 7,708,350,313 8,479,185,345 4.3.2 Medium-Term Expenditure Framework The budget plays a central role in transformation by promoting redistribution and directing scarce resources towards catalytic investments in human and physical capital. But the budget depends on the economy to generate the resources to finance these investments. Resources will be channelled to priority areas through programme based budgeting underpinned with transparency and efficient county government institutions. Resources will continue to be aligned to sectors in 2019/2020 as indicated in table 13. Table 14: Baseline Ceilings for the MTEF Period Vote Details Approved Estimates Projected Estimates 2018/19 2019/2020 2020/2021 County Assembly 907,556,207 998,311,828 1,098,143,010 Governance and Administration 706,227,275 776,850,003 854,535,003 Finance and Economic Planning 566,996,155 623,695,771 686,065,348 Agriculture, Food, Livestock & Fisheries 433,745,401 477,119,941 524,831,935 Water, Irrigation, Environment & Natural Resources 390,474,126 429,521,539 472,473,692 Education, Youth Affairs, Gender & Social Services 489,409,781 538,350,759 592,185,835 County Health Services 2,067,822,799 2,274,605,079 2,502,065,587 Lands, Physical Planning, Urban Development and Housing 176,750,647 194,425,712 213,868,283 Enterprise and Industrial Development 242,125,315 266,337,847 292,971,631 Tourism, Culture, Sports and Arts 245,763,036 270,339,340 297,373,274 Roads, Public Works, Energy and Transport 780,720,452 858,792,497 944,671,747 Total 7,007,591,194 7,708,350,313 8,479,185,345 From table 13 above, total resource envelop is expected to move from Kshs 7.0 billion in 2018/2019 to Kshs 7.7 and 8.5 in the subsequent financial years. Expenditure Budgetary projections indicates that in the financial years 2019/2020 and 2020/2021, total resource envelop will be Kshs 7,708,350,313 and Kshs 8,479,185,345 respectively. The expenditures will be allocated to recurrent and development categories. For the financial year 2019/2020, recurrent expenditure projection is Kshs 5,395,845,219 rising to Kshs 5,935,429,741 in the financial year 2020/20/21. Similarly, development projections at 30 25 | P a g e Budget Review and Outlook Paper for FY 2017/18 | Finance, and Economic Planning per cent of the total resource envelop will be Kshs 2,312,505,094 in the financial year 2019/2020 rising to Kshs 2,543,755,603 in the financial year 2020/2021. 26 | P a g e