COUNTY GOVERNMENT OF GARISSA COUNTY FISCAL STRATEGY PAPER FEBRUARY 2019 © County Fiscal Strategy Paper (CFSP) 2019 To obtain copies of the document, please contact: The County Executive Committee Member Department of Finance and Economic Planning The County Executive Committee will publish CFSP 2019 on the website at : www.garissa.go.ke within 7 days of adoption Page i Table of Contents Acknowledgement ..................................................................................................................... v ABBREVIATIONS AND ACRONYMS ................................................................................ vi Legal Basis for the preparation of the County Fiscal Strategy Paper .................................... viii Fiscal Responsibility Principles ............................................................................................... ix CHAPTER ONE: COUNTY STRATEGIC BLUE PRINT ...................................................... 1 Overview ................................................................................................................................ 1 INTRODUCTION: .................................................................................................................. 1 1.1 Programmes for achieving the County Strategic Blueprint’s Objective ..................................... 2 Risks to realizing the fiscal framework ................................................................................... 6 1.2 Outline of County Fiscal Strategy Paper ................................................................................ 7 CHAPTER TWO: RECENT ECONOMIC DEVELOPMENTS AND POLICY OUTLOOK 8 2.1 Overview ........................................................................................................................... 8 2.1. Update on Fiscal Performance and Emerging Trends ....................................................... 10 2.3 Comparison of Actual Performance against budget .............................................................. 10 2.4 Significant economic, legislative and financial events .......................................................... 11 2.5. Revised Estimates ............................................................................................................ 11 2.6 Economic Policy and Outlook ............................................................................................ 13 2.7 Risks to the Outlook ......................................................................................................... 14 CHAPTER THREE: FISCAL POLICY AND BUDGET FRAMEWORK ............................ 15 3.1 OVERVIEW .................................................................................................................... 15 3.2 Fiscal policy frame work ................................................................................................... 15 3.3 Fiscal strategy paper obligations......................................................................................... 16 3.3.1 Fiscal responsibility principles....................................................................................... 16 3.4 Budget framework FY 2019-2020 MTEF ............................................................................ 17 3.4 .1 Revenues .................................................................................................................. 17 3.4.2 Expenditure ............................................................................................................... 19 CHAPTER FOUR: MEDIUM TERM EXPENDITURE FRAMEWORK ............................. 23 Overview .............................................................................................................................. 23 4.1. Resource Envelope .......................................................................................................... 23 4.2. Spending Priorities .......................................................................................................... 24 4.3. Medium Term Expenditure Estimates ................................................................................ 27 4.4 Baseline Ceilings .............................................................................................................. 28 4.5 . Finalization of Spending Plans ..................................................................................... 30 4.6 Details of Sector Priorities ................................................................................................. 31 CHAPTER FIVE: FISCAL RISKS AND CONCLUSION .................................................... 40 Page ii 5.1 Risks To Realizing The Fiscal Framework .......................................................................... 40 5.2 Conclusion .................................................................................................................. 41 ANNEXES .............................................................................................................................. 42 Annex 1: Resource Envelope .................................................................................................. 42 Annex 2: Summary Allocations ............................................................................................... 43 Annex 3: Economic Classification Estimates ............................................................................ 45 Annex 4: County Sector Ceilings ............................................................................................. 46 Annex 5: Program and Sub program allocations ........................................................................ 46 Annex 6: List of Development Projects .................................................................................... 50 List of Tables Table 1: Trend in Equitable Share for Period 2015/2016 – 2019/2020 ................................................................. 11 Table 2: Impact of Revised Ceilings on Forward Estimates .................................................................................. 12 Table 3: National Revenue ..................................................................................................................................... 17 Table 4: Local Revenue ......................................................................................................................................... 18 Table 5: Local Revenue Trends ............................................................................................................................. 18 Table 6: Expenditure Trend ................................................................................................................................... 19 Table 7: Impact of revised ceilings on forward estimates ...................................................................................... 20 Table 8: Sector Allocation ..................................................................................................................................... 21 Table 9: 2019/2020 Resource Envelope ................................................................................................................ 23 Table 10: Spending priorities in Amount (Kshs). .................................................................................................. 25 Table 11: 2019/2020, 2020/2021 and 2021/2022 Medium Term Expenditures Estimates .................................... 27 Table 12: 2018/2019 Baseline and Estimates for the 2019/2020 ........................................................................... 28 Table 13: Health sectorial programmes ................................................................................................................. 30 List of Figures Figure 1: Trend in Equitable Share for Period 2015/2016 – 2019/2020 ................................................................ 12 Figure 2: Impact of Revised Ceiling on Estimates ................................................................................................. 13 Figure 3: National Revenue ................................................................................................................................... 17 Figure 4: Local Revenue ........................................................................................................................................ 18 Figure 5: Local Revenue Trend............................................................................................................................. 19 Figure 6: Expenditure Trend .................................................................................................................................. 20 Figure 7: Impact of Revised Ceiling on Estimates ................................................................................................. 21 Figure 8: Sector Allocation .................................................................................................................................... 22 Figure 9: The Resource Envelope .......................................................................................................................... 24 Page iii Foreword It is my pleasure to present to you the 2019 County Fiscal Strategy Paper (CFSP) for Garissa County. This is the Second CFSP prepared by the County Treasury to implement the Second generation County Integrated Development Plan (2018-2022). It identifies the broad strategic priorities areas and policies goals that will form the basis for preparation of 2019/2020 budget and the medium term in accordance with section 117 of the Public Finance Management Act, 2012. The strategic priorities and goals outlined in this Paper herein are based on Governor’s Manifesto and the transformative agenda pursue by the County leadership as well as sectoral plan as contain in the Annual Development Plan and inputs from Public Participation forums. The County has made significant progress in various fronts. The most notable of this is the increase in local revenue collection in the first half of the financial 2018/2019, which has increased by 95 per cent compared to the same period the previous financial year. Going forward, we shall endeavor to build on this progress and ensure the local revenue target is met in the next financial year. Other detailed sectoral achievement is outlined chapter six, the Medium Term Expenditure Framework, section of this document This paper highlights the outcome of the previous financial year and also realign itself to broad National objectives is defined in the budget policy statement (BPS).It also contain vital data information on: Macro-economic policy and plans; overall fiscal strategy, such as cumulative revenue projections; the resource envelopment for the medium term; County overall priority intervention and proposed departmental expenditure in the medium term expenditure Framework. In line with the Governor’s Manifesto, the County will continue to pursue the following five Key Priority Areas that will enhance service delivery to the people of Garissa County: I. Improving access to water and sanitation services; II. Provision of accessible and quality healthcare services; III. Investment in agricultural transformation and food security; IV. Investment in transport and infrastructure development; and V. Creation of conducive business environment. It is my sincere hope that we will make great strides towards the achievements of the above priority areas at the end of the financial year and ensure the realization of our County’s transformative agenda. Hon. CPA Roble S. Nunow County Executive Committee Member Finance, Economic Planning, Revenue Management GARISSA COUNTY Page iv Acknowledgement The Garissa County Fiscal Strategy Paper (CFSP) 2019 was prepared in accordance with section 117(1) of the Public Finance Management Act, 2012, which stipulates that the County Treasury shall prepare the Fiscal Strategy Paper for each financial year and submit the paper to the County Assembly by the 28th of February of that year. The CFSP outlines the Macroeconomic parameters affecting the fiscal framework that guides in preparation of the next financial year’s budget and the county spending plans in the medium term. It is expected that this document will create and enhance the understanding of how these parameters affects the County fiscal framework. It also inform and guide public discourse on progress made by that the County, and the development matters the County expect to undertake in the coming financial year and also ensure meaningful participation of the people in the budget process in accordance with article 201 of the constitution. The completion of this document was as a result of collaborative effort by various County departments and semi-autonomous entities that provided valuable information. We immensely appreciate their contribution toward this course. We are also grateful to all those provide essential inputs in the just conclude the Macro sector working and ensured timely preparation of this paper The Preparation was a culmination of efforts put in by various officers. We are particularly grateful to His Excellency the Governor for his lead role, direction and guidance in the development of this document. Special thanks and gratitude also go to His Excellency the Deputy Governor, and the County Executive Member for Finance and Economic Planning for their stewardship of the processes. My sincere gratitude goes to my County Executive committee Colleagues, all Chief Officers and Directors of various departments for ensuring timely submission of departmental inputs that informed the preparation of this document. Equally, I would like to acknowledge County Treasure Staff as well as staff from other departments, for their effort and contributions in development of this document. Lastly, I take this opportunity to express my profound gratitude to external experts Wohoro Ndohho, Mukami Mbogo, Abass Arale from AHADI organization for his exemplary guidance, invaluable support and constant encouragement out this excise. Ibrahim Malow Chief Officer Finance GARISSA COUNTY Page v ABBREVIATIONS AND ACRONYMS CBK Central Bank of Kenya CECM County Executive Committee Member CO Chief Officer CRA Commission of Revenue Allocation CBROP County Budget Review and Outlook Paper CFSP County Fiscal Strategy Paper FY Financial Year GDP Gross Domestic Product IBEC Inter-Governmental Budget and Economic Council ICT Information and Communication Technology IFMIS Integrated Financial Management Information System KNBS Kenya National Bureau of Statistics MTEF Medium Term Expenditure Framework MTP Medium-Term Plan PE Personnel Emoluments PFM Public Finance Management PWD People with Disabilities SRC Salaries and Remuneration Commission SWG Sector Working Group Page vi Page vii Legal Basis for the preparation of the County Fiscal Strategy Paper Page viii Fiscal Responsibility Principles In order to ensure prudent and transparent management of resources, the County Treasury shall be guided by the following fiscal responsibility principles as spelt out in Section 107 of the Public Finance Management (PFM) Act, 2012: I. The county government’s recurrent expenditure shall not exceed the county government’s total revenue; II. Over the medium term a minimum of thirty percent of the county government’s budget shall be allocated to the development expenditure; III. The county government’s expenditure on wages and benefits for its public officers shall not exceed a percentage of the county government’s total revenue as prescribed by the County Executive member for finance in regulations and approved by the County Assembly; IV. Over the medium term, the government’s borrowings shall be used only for the purpose of financing development expenditure and not for recurrent expenditure; V. The county debt shall be maintained at a sustainable level as approved by county assembly; VI. The fiscal risks shall be managed prudently; and VII. 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. Page ix CHAPTER ONE: COUNTY STRATEGIC BLUE PRINT Overview INTRODUCTION: This chapter links CFSP with strategic priorities and goals contained in county policy documents such as The ADP, Governor’s manifesto and CIDP. These documents inform county budgets based on programs prepared in the medium term structure, 3-5 years. Therefore, it is paramount that the plan should have medium term priorities that are to be achieved over that period. Since CFSP is one year plan extracted from ADP, the details in the CFSP should mirror those contained in ADP. The fiscal framework envisaged in these policy documents, ensures adherence to principles of public finance and fiscal responsibility principles as set out in article 201 of the Constitution of Kenya, 2010 and section 107 (1) and (2) the Public Finance Management Act 2012 respectively. Specifically, the development to recurrent expenditures has been maintained within the required ratios of 30:70. Further the expenditures are fully funded from the allocation from the National Government and county own revenue. In achieving these priorities and goals, prudency in use of public resources is paramount. In turn, this CFSP will be the primary guide for Garissa County in preparing its budget for Financial Year 2019/2020 and in the Medium Term. In order to achieve the set objectives, Garissa County Government will employ greater transparency, effectiveness; efficiency and economy in management of public resources in order to ensure fiscal discipline. In line with the county government blue print (CIDP), the government reaffirms the following Key Priority Areas (KPAs) are addressed in this CFSP: In line with Garissa County Government’s strategy to dedicate substantial proportion of development resources towards one sector for optimum impact within a financial year, the County Government in 2018/2019 focused its resources on the water sector. In the 2019/2020, the focus will go to the Health sector. SOCIAL SECTOR: Increased public expenditure on Social welfare Health: Improving referral, community healthcare and telemedicine Education & Vocational Training: To raise quality early childhood and vocational education Housing & Urban Development: To have affordable housing for the both the citizen and the county staff and urban renewal Land and Physical Planning: Official land registration, GIS land information management system and proper spatial planning Page 1 Water Service and Sanitation: construction of proper water storage facilities, development & access to improved water supplies and sanitation Gender, Youth and Social Services: properly strengthening of social protection programs and mainstreaming of gender, youth and cultural tolerance including sports activities Development Objective Overview: To lower the county population living in absolute poverty from 59% to within 3% of the national average by 2022. To achieve this objective, Garissa County will develop and implement strategic investment that aligns resources to achieving basic social services and widen the social safety net programs. Specifically, undertake short-term measures to relief the burden on most vulnerable population and stimulate capital formation. ECONOMIC SECTOR Environment: Commitment to a safer, cleaner environment and conservation of natural resources such as restoration of environment, strengthening management of community conservancies & national reserves. This support climate resilient, low-carbon and resource efficient development Agriculture: Increasing agriculture and livestock productivity through improving smallholder irrigation development, promoting farming as a business, commercializing livestock production, enterprise diversification, value addition and building sustainable market linkages. Road and Transport: Expansion, upgrading and maintenance of 2,300km roads and multi-modal urban transportation Trade, Tourism & Enterprise: Promotion and regulation of fair trade, tourism and enterprise Energy: for extension of rural electricity and increased access to modern energy sources Development Objective Overview: To minimize climate and environmental risks and their impact on investment and quality of human life and to raise economic productivity, trade and competitiveness. 1.1 Programmes for achieving the County Strategic Blueprint’s Objective In the Financial year 2019/2020 and in the medium term, the County anticipates having a balanced budget. It is, however, possible that the deficit will slightly rise towards the terminal end of the financial year occasioned by incessant failure in achieving local revenue target, leading to gaps in the resource envelope, thus calling for rearrangement of spending plans by the county. In the longer term, however, appropriate measures, including setting a realistic and achievable local collections target, will be put in place to maintain county budget deficit at a manageable level in order to secure the County’s fiscal sustainability. Despite missing the target, Garissa County Government has outlined a raft of measures to deliver, including reintroduction of land rates and changes in mode of payment of water charges and parking fees, in the County Finance Bill. These measures are geared at boosting revenue performance in the coming financial in the medium term and ensuring smooth implementation of programs detailed in the policy documents. Page 2 The County government of Garissa is composed of the legislative arm (County Assembly) and the Executive which has the following ten Sectors viewed as directorates; I. Health and Sanitation Services; II. Roads, and Transport III. Lands and Housing; Public Works and Urban Services IV. Trade, tourism, Investment and Enterprise Development; V. Education, Public Service and Labor Relations; VI. Agriculture, livestock and Co-operatives VII. Finance and, Economic Planning VIII. Gender, Culture, Social Services, youth and sport IX. Environment, Energy, Natural Resources and Wildlife management X. Water and Irrigation Services; For each of the departments/sector, though some are structured differently, their visions have been derived from the national sector vision and mission. In addition, the County’s response to the sector vision and mission and the role of the stakeholders are explained. The development Challenges, projects and programmes are presented at the departmental level. I. Health and Sanitation Services; In the 2019/2020 fiscal year, the health sector will mainly focus on Universal Health Care (UHC) coverage, the Governor’s flagship project (establishment of the Cancer Centre at the County Referral Hospital). It will also embark on improving, expanding and strengthening quality of service delivery in Garissa County by hiring more health personnel, construction and opening up of dispensaries in areas of need, equipping of maternities and Maternal & Health Clinics (MCHs). In addition, there will be health system strengthening through critical training and skills development. The sector will also increase the supply of pharmaceutical and non-pharmaceutical commodities. It will also improve on referral systems in place. II. Roads, and Transport: The subsector is planning to enhance road network in the county by maintaining the existing roads in the sub counties, upgrading of rural roads to gravel standards, upgrading of sub county headquarters access roads to bitumen standards, installation of road speed bumps on major roads in Garissa Township, construction of Bus parks and designated parking bays. III. Lands, Housing and Public Works, Municipalities and Urban Services a) Lands, Surveying and Physical Planning The subsector has planned to improve on land administration and management services by spatial planning of sub-county headquarters, planning of 14 small towns within the seven sub-counties, Page 3 harmonization of local plans, survey plans and PDPs, setting apart two sub-county headquarters, placing of perimeter boundary beacons, placing of controls for cadastral surveys and survey of plots in urban centers. b) Housing & Public Works In line with the President’s Big 4 Agenda, the sub-sector intends to reduce the government expenditure on leasing of houses by putting up an official deputy governor’s residence and renovating the existing government houses. It will also provide the required technical support to the various infrastructure stakeholders. c) Municipalities and Urban Development To provide sustainable urban development and drive the county economy, the sub-sector has planned to sensitize the public on waste management disposal, purchase more firefighting equipment to reduce fire response time, ensure safe and sustainable built environment, Preparation of valuation roll for municipality and Regularization of Usalama scheme IV. Trade, tourism, Investment and Enterprise Development; The sector, in line with its mandate of providing business support services, trade licensing and provision of credit, has prioritized to construct market sheds in 3 sub counties, improve Bouralgy and Ishaqbini Community Centre, construct a Business Incubation Centre, and operationalize a revolving fund to the tune of 150m V. Education, Public Service and Labor Relations; a) Education In line with the governments agenda to ensure the constitutional rights of education to every child is observed, the sub-sector has planned to increase the number of ECD centres across the county by Constructing thirty ECD classrooms (Two Classrooms per ward and fencing) and hiring & training of ECD teachers. Awareness raising campaigns will also be carried out to enhance access to ECD centres. To enhance access and retention in ECDs the sector will spearhead implementation of the pilot school feeding programme To increase access to TVET programmes and improve the quality of training, the County will Construct Motor Vehicle Mechanic (MVM) Workshop in Garissa Polytechnic, Construct a Motor Vehicle Mechanic (MVM) Workshop in Mkono Polytechnic and Provide teaching and learning materials for vocational centres in the county, as well as hiring and training of TVET teachers Page 4 b) ICT & E-Government In order to foster innovation, best practice, and value for money in the use of ICT in management of County resources, learning and Citizen outreach, the County Government will establish e- Garissa County Government Platform across County service sectors c) Library Services The sub-sector has prioritized to provide a secure and conducive learning environment for use of library resources and adopt technologies that will make information resources accessible to the community in an equitable, efficient and effective manner. This will be done by constructing and equipping of one sub county library in Modogashe, renovation and construction of perimeters walls and equipping of the existing 3 libraries. The sub-sector intends to purchase and equip a mobile library van. VI. Agriculture, livestock and Co-operatives In line with the national government’s big 4 agenda on food and nutrition security, in the 2019/2020 fiscal year the sector will focus its priorities to investments on; minimizing post-harvest losses in the horticultural sub-sector by establishing a fruit processing facility, opening up of farm access roads to link farmers with the markets, supporting the small holders with certified farm inputs to increase food and raw material production, boosting livestock health management and establishing livestock markets across the sub-counties. The sector will continue steering and coordinating the implementation of partner and donor-funded programmes/projects on food security. These are, Kenya Climate Smart Agriculture (KSCAP), Agricultural Sector Development Support Project (ASDSP), Regional Pastoral Resilient Livelihoods Project (RPRLP), and the Sustainable Food Systems Programme (SFSP) VII. Finance and, Economic Planning The sector will continue to discharge its key mandate of ; preparation of county short term and long term plans, coordinating and preparation of county budget, mobilizing revenue, budget implementation and control, prudent management of public funds by adherence to the PFM act 2012 , financial reporting and advisory, asset management, enhancing internal control, monitoring and evaluating the county projects, training of staff and capacity building of the M&E and Audit committees. In the 2019/2020 fiscal year, the sector will commit part of its revenues to settling of pending bills as per advisory from the National Treasury and the Senate VIII. Gender, Culture, Social Services, youth and sport Page 5 To enhance delivery of its mandate, the Sub-sector in the financial year 2019-2020 will complete the ongoing Construction of the stadium in Garissa township sub-county, rehabilitate the sports grounds and procure sports kits and equipment in all the sub-counties. It will also initiate provision of additional office space for its staff by constructing a new office block in Garissa township, Dadaab and Ijara/Masalani Sub-counties. Also, the sector intends to purchase motor vehicles for accessibility and service delivery in the sub-counties. The sector intends to create more youth friendly centres and donate essential equipment and tools to disable, vulnerable groups and institutions. The sector also intends to construct cultural cottages and carry out landscaping works IX. Environment, Energy, Natural Resources and Wildlife management In follow up to the enactment of Garissa County Climate Change Fund Act 2018, enactment of Garissa County Environmental management and coordination Act 2018, and subsequent gazettement and training of County Environment Committee (CEC) as per section 29 of Environmental management and coordination Act 2015, the sector ha prioritized to implement two key projects in 2019/2020 financial year. These are; the Climate Change Support for Energy sub- sector, and Climate Change Mitigation & Adaptation for the Environment sub-sector X. Water and Irrigation Services; The sector intends to make water accessible to the residents of Garissa County by investing heavily in in construction of water pans and redistribution of clean water. It also intends to improve water and irrigation management by recruiting and training more technical staff. It has also planned to increase office space for its staff and taking services to sub-county level by establishing offices and mode of transport at the sub county level. The irrigation sub-sector has prioritized implementation of construction of new and rehabilitation of existing irrigation schemes in Garissa Township, Balambala and Fafi sub-counties. In addition, there’s proposed completion of ongoing schemes in Iftin, Balambala and Abaqeyle in Dadaab. Risks to realizing the fiscal framework The realization of development goals for the County will not be without risks and challenges as detailed below: i. Expenditure pressures especially perpetual increase in salaries and operational demand have put a strain on development expenditure. This demand is synonymous almost all departments and entities of the County leading to continued reallocation and rearrangement of spending plans. ii. The underperformance in development attributable to a number of factors including delays in procurement process and inadequate capacity project management leading to low absorption of development budget. iii. Revenue performance may also pose a potential risk. The County will continually put up Page 6 solid structures geared towards sealing loop holes and expanding revenue base. Full automation of revenue collection and other measures outlined above will be implemented. iv. Potential uncertainties associated with revised resource sharing formula by CRA could lead to some implementation of programs detailed in preceding policy documents like ADP and CIDP being rescheduled to future period or even overlook altogether. v. Delay in disbursement of fund. Delay in exchequer releases has, not only, resulted in delay in the county achieving its development aspirations but also dissuaded the county workforce hence compromising on service delivery. vi. The County’s performance may also be slowed down by unreliable weather conditions. This will affect agriculture which is the main economic driver of the County. Resources therefore need to be set aside to mitigate the situation. 1.2 Outline of County Fiscal Strategy Paper This CFSP was developed by the County Treasury team in conjunction with other staff from crucial sectors. The development process was undertaken through a series of internal evaluations as well as consultations with various stakeholders. The CFSP was also widely discussed by the public through citizen participation forums in the county and refined to incorporate key insights. This has ensured ownership, commitment and leadership by the residents of Garissa County. The CFSP takes into account the National context as described in the Budget Policy Statement, and applies any significant effects on a national scale into Garissa fiscal outlook. It also examines and evaluates Garissa’s past performance and based on this data and analysis, projects its fiscal framework into the medium term Page 7 CHAPTER TWO: RECENT ECONOMIC DEVELOPMENTS AND POLICY OUTLOOK 2.1 Overview 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 per cent for the last five years outperforming the average growth rate of 4.7 per cent in the period 2008 to 2012 and 4.6 per cent in the period 2002 to 2007 The value of goods and services produced raised Per Capita Income from Ksh 113,539 in 2013 to an estimated Ksh 190,521 in 2018, a 67.8 per cent increase. This enabled generation of around 840,000 new jobs per year in the period 2013-2018 up from 656,500 new jobs per year in the period 2008-2012. 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 per cent in the third quarter of 2018 and 6.2 per cent in the second quarter of 2018 up from 5.8 per cent in the first quarter of 2018, averaging 6.0 per cent in the first three quarters of 2018. Growth is projected at 6.0 per cent in 2018 up from 4.9 per cent in 2017, which is in line with the 2018 Budget Review and Outlook Paper (BROP) projection. In the third quarter of 2018, the economy grew by 6.0 per cent compared to a growth of 4.7 per cent 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. Agriculture sector recovered and recorded growth of 5.2 per cent in the third quarter of 2018 compared to a growth of 3.7 per cent 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. The current recovery in the agriculture sector is broad-based and reflected in the expansion of output of key food and cash crops such as tea, coffee and fruits. The Non-agricultural sector (service and industry) remained vibrant and grew by 5.8 per cent in the third quarter of 2018 up from a growth of 5.1 per cent in a similar quarter in 2017. It has the largest percentage points to real GDP growth at 4.0 percentage points mainly supported by the service sector. Services remained the main source of growth and expanded by 5.9 per cent in the third quarter of 2018 compared to a growth of 5.6 per cent in the same quarter in 2017. The service sector was supported by improved growth in accommodation and restaurant (16.0 per cent), wholesale and retail trade (6.8 per cent), transport and storage (5.4 percent) and financial and insurance (2.6 per Page 8 cent). Growth of activities in information and communication (9.1 per cent) and real estate (5.8 per cent) remained vibrant despite the slowdown relative to the same quarter in 2017. 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). The performance of Industry improved to a growth of 5.1 per cent in the third quarter of 2018 compared to a growth of 2.3 per cent 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. 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 and geothermal power generation coupled with a slowdown in growth of thermal generation. 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. Over the last few couple of years, the Garissa County economy exhibited contrasting trends in comparison to those registered by the National economy. A number of shocks including insecurity along the border with Somalia and erratic weather patterns resulted in depressed productivity in livestock and agricultural Sector. The livestock subsector is the main backbone of the County’s economy and the result for the economy was debilitating. Scanty rainfall, especially in the second quarter of 2018/19, resulted in poor agricultural productivity. Garissa County was particularly affected by the drought. Food security was severely destabilized with several communities in the county needing emergency aid to provide sustenance. Health complications due to malnutrition affected Garissa residents, particularly children. In addition, the overall level of urbanization in the county increased due to the influx of people from the hinterland, mainly due to loss of livelihood as a result of persistent drought. This caused strain on the social and physical infrastructure in these urban centers. Pastoral lifestyle being the predominant economic activity was severely affected by the drought situation, thus occasioning migration and living in the urban centres as a coping strategy. Therefore, service provision to these new settlements is ad hoc. One way that Garissa is planning to address this is to open up more irrigation schemes around the permanent water source, River Tana and construction of mega water pans in the hinterlands to provide a source of water supply for new and existing farms. Irrigated farming will provide a more stable livelihood source as crops, fodder and other raw materials will be produced for food security, income generation and employment creation. Going forward, insecurity remains a major concern for northern Kenyan Counties, particularly in Garissa County, amid renewed terrorist attacks. This has hindered movement within the county Page 9 especially the sub counties that borders Somalia this has led to deterioration of economic performance in the county. The impact has been felt on infrastructure, physical and human capital, productivity and economic growth, and increased uncertainty in the investment climate. 2.1. Update on Fiscal Performance and Emerging Trends National Revenues will affect the size of the Equitable Share in 2019/20 Budget execution started on a slow note in the first quarter of the FY 2018/19 due to budget rationalization to align expenditure priorities to revenues after amendments to the Finance Bill 2018 that significantly affected the expected revenue yields. In addition, expenditure rationalization was effected to reflect lower revenues after the revenue outcome for the FY 2017/18 turned out weaker than anticipated, thereby shrinking the forecasting base for FY 2018/19 as well as the medium term. The exercise to clean-up the development project portfolio triggered by the Presidential directive on inclusion of new projects in the budget also slowed down the uptake of development expenditures in the first quarter. This picked up strongly in the second quarter of FY 2018/19. The expenditure rationalization was to ensure sustainable fiscal position in the FY 2018/19 and the medium term, and reaffirm the Government’s commitment to its fiscal consolidation plan and to prudent fiscal management in general. Total expenditure and net lending for the period July - November 2018 amounted to Ksh. 829.1 billion which was below the projected amount by Ksh 105.7 billion. Recurrent spending amounted to Ksh 553.6 billion while development expenditures and transfer to County Governments (Equitable share only) were Ksh 203.1 billion and Ksh 72.2 billion respectively and net lending expenditures for five months amounted to Ksh 963 million. Whereas recurrent spending was below the projected target by Ksh 80.0 billion mainly on account of lower than targeted domestic interest payments and pension payments, capital spending was marginally above the target by Ksh 3.2 billion. Fiscal operations of the Government during the five months of July-November 2018 resulted in an overall deficit of Ksh 216.5 billion against the projected deficit of Ksh 242.8 billion. This deficit was financed through net domestic financing of Ksh 139.4 billion and net foreign borrowing of Ksh 77.1 billion. 2.3 Comparison of Actual Performance against budget The 2019/2020 budget was prepared against a backdrop of slashed resource allocation to Arid and Semi-Arid Lands (ASAL) counties occasioned by new proposed revenue sharing formula. The budget was prepared against the background of the medium-term fiscal policy of the National and the County Government, the 2018/2019 Budget Policy Statement, the Medium Term Plan and the County Integrated Development Plan. Page 10 2.4 Significant economic, legislative and financial events The expected receipt from National government is likely to be lower than the current year. This is occasioned by reviewed revenue sharing formula by the CRA. The County MTEF will prepare for this circumstance going forward. The County, though greatly reliant on the National Government transfers, will institute measures to increase the local revenue base by aligning itself to National investment programs in order to increase resources that promote economic stability for the County. Though county’s own revenue generation has been pegged at Ksh.250, 000,000, the target has constantly eluded the County taxman. 2.5. Revised Estimates During the budgetary implementation of the previous financial years, the county government has encountered the following budgetary setbacks that would warrant supplementary budgets i. The recent order by the auditor General for counties to receive and audit all files pertaining pending bills warrants a supplementary budget, which would necessitate in-year budgetary adjustments through supplementary budgets. ii. Another item of concern is the balance brought forward from previous financial years mostly due to unmet revenue generation iii. Thirdly, there is ballooning wage bill as a result of unplanned recruitment iv. There has also been extreme weather conditions leading to massive death of livestock and therefore necessitating government’s intervention. v. Funds meant for the County Governor’s Official Residence were re-allocated to putting up ICT centres in all the wards across the county For these reasons, the county treasury has found itself contemplating with unavoidable budgetary adjustments to rationalize the expenditure Table 1: Trend in Equitable Share for Period 2015/2016 – 2019/2020 Years 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 Equitable shares in 5.7 6.2 6.6 6.9 6.8 Kshs (Billions) Page 11 Equitable shares in Kshs(Billions) 8 7 6 5 4 Equitable shares in Kshs(Billions) 3 2 1 0 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 Figure 1: Trend in Equitable Share for Period 2015/2016 – 2019/2020 Equitable share trend has been on the rise for the first four years but a decline was realized in the FY 2019/2020 due to the revised ceiling by the commission for revenue allocation. This has led to fiscal consolidation. Table 2: Impact of Revised Ceilings on Forward Estimates 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Current Trend (B) 7.1 7.5 9.5 11.1 12.2 13.3 Trend due to revised - - - 9.6 10.5 11.6 ceiling(B) Page 12 14 12 10 8 6 4 2 0 16/17 17/18 18/19 19/20 20/21 21/22 Current Trend (B) Trend due to revised ceiling(B) Figure 2: Impact of Revised Ceiling on Estimates As indicated in the graph above expenditure has been on the rise for the previous years until the fiscal consolidation that has resulted in decrease in expenditure estimates. 2.6 Economic Policy and Outlook Garissa is formulating the foundation to become increasingly self-sustaining, relying less and less on the National Government, and becoming an economic force in the region. Garissa also plans to build the structures necessary to cushion itself from external negative effects, while taking advantage of external positive effects from the National context. In light of the subdued national revenue environment, Garissa County laid the legislative groundwork to support a stronger revenue raising administration to enhance revenue collections in the county. Revenue raising legislation is being drafted for tabling in the County Assembly in 2018/19. Additional strategic investments for enhanced own source revenues include investment in contextually relevant systems to automate revenue collection, and capacity building for the revenue administration. Furthermore, the structures to implement an annual Finance Act are key for responsive revenue administration framework. Over the medium term, expenditure on recurrent will need to be contained in order to ensure substantial amount of funds for development. In particular, every effort should be made to contain wages and salaries by the executive and other public entities by limiting the size of public service. Pursuing a sustainable level of debt is also vital as a means to provide room for the private sector Page 13 to expand business and create the much needed jobs within an environment of low inflation, and stable interest rates and exchange rate. In light of apparent fiscal constraints, tough choices are therefore required to be made to ensure that available resources are directed towards those priority programs that have the highest socio- economic impact on our economic development. This is especially more urgent with respect to the public sector wage bill that, if not appropriately managed, will become the main macroeconomic challenge for Garissa County. Garissa has been allocated a proportion of units to develop affordable housing and is investing in expanding these alongside the National Government investment under the big 4 agenda. Initial consideration for investing in the cotton industry through the manufacturing focus on the National Government is also under review. Garissa is also preparing to receive donor-funded hospitals from refugee settlements and as such will be tapping into the Universal Health Care focus of the National Government. Finally, because of the effects of the drought, Garissa will invest to attract funding from the National Government for food fortification, livestock off-take programmes, insurance and market access. 2.7 Risks to the Outlook In the Financial year 2019/2020 and in the medium term, the County anticipates having a balanced budget. It is, however, possible that the deficit may slightly rise towards the terminal end of the financial year occasioned by incessant failure in achieving local revenue target, leading to gaps in the resource envelope, thus calling for re-arrangement of spending plans by the county. In the longer term, however, appropriate measures, including setting a realistic and achievable local collections target, will be put in place to maintain county budget deficit at a manageable level in order to secure the County’s fiscal sustainability. Despite missing the target, the Garissa County Government has outlined a raft of measures to deliver, including reintroduction of land rates and changes in mode of payment of water charges and parking fees, in the County Finance Bill. These measures are geared at boosting revenue performance in the coming financial in the medium and ensuring smooth implementation of programs detailed in the policy documents. Page 14 CHAPTER THREE: FISCAL POLICY AND BUDGET FRAMEWORK 3.1 OVERVIEW The 2019/2020 Medium-Term budget framework is intended to have the fiscal consolidation agenda. The consolidation process aims at supporting a sustainably wealthy and vibrant county providing high quality services to improve the livelihoods of its citizens. The county will pursue prudent fiscal policies to ensure economic growth and development. In addition, these policies will provide support to economic activities while allowing for sustainable implementation of the projects and programs. Adhering to these policies will also enhance domestic revenue collection which will ensure there are adequate resources for capital investments. 3.2 Fiscal policy frame work In the Financial year 2019/2020 and in the medium term, the County has suffered reduction of its equitable share revenues by 1.3% from Ksh6.9 Billion to ksh6.8 billion this lead to overall reduction of resource envelope this means that the sector allocations and ceilings will be revised down wards leading to fiscal consolidation. The biggest challenge in fiscal consolidation is Payroll in the county which has steadily trended up over the past few years with now reduced resource envelope the government will revisit this trend to align with new revenue realities. Further reduction of 1.4% of resource envelope will arise from own source revenue as target of local revenue is reduced from 250 million to 150 million this leads to further fiscal consolidation and in measure to address this. In light of this apparent fiscal constraints, tough choices are therefore required to ensure that available resources are directed towards those priority programs that have the highest socio- economic impact on our economic development. This is especially more urgent with respect to the public sector wage bill that, if not appropriately managed, will become the main macroeconomic challenge for Carissa County. The County Government has outlined a raft of deliverable measures, including automation of revenue collection systems, reintroduction of land rates and changes in mode of payment of water charges and parking fees, in the County Finance Bill. These measures are geared at boosting revenue performance in the medium term and ensuring smooth implementation of programs detailed in the policy documents. Page 15 Over the medium term, expenditure on recurrent will need to be contained in order to ensure substantial amount of funds for development. In particular, every effort should be made to contain wages and salaries by the executive and other public entities by limiting the size of public service. 3.3 Fiscal strategy paper obligations The County Government recognizes that compliance with fiscal responsibility is a legal requirement and county executive will take charge to comply with all fiscal principles as provided in the PFM Act 2012. 3.3.1 Fiscal responsibility principles The county treasury will endeavor to comply with the fiscal responsibility principles as outline below 1. More funds will be pushed to development in order to enhance the minimum constitutional requirement of 30 percent of the County budget shall be allocated to development expenditures.in 2018-2019 budget 40% of the budget has allocated to development. The county will endeavor to maintain the same in 2019-20120 and in the medium term. 2. The County Government’s expenditure on wages and benefits for County public officers shall not exceed thirty-five (35) percent of total revenues as per PFM regulations. The county Executive had serious problem complying with PFM regulations the current payroll is around 40% percent above the requirement. The county executive must strive to comply with the PFM requirements . 3. Over the Medium Term, the County Government’s borrowings shall be used only for Short term borrowing shall be for purposes of cash management. Because of delay in treasury disbursement the county executive plans to go for short term borrowing mainly for cash management and mainly for payroll purposes only. 4. local revenues must have managed and collection enhanced. 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 introduced. The county plans to introduce various tax administrative measures eg Automation of collection systems, introduction of valuation roles and registration land and properties within Garissa town and other major towns in the sub counties in an effort to enhance revenue base. 5. Fiscal risks shall be managed prudently. The county plans to manage the fiscal risks arising from reductions to the equitable share by adopting a fiscal consolidation stance through various austerity measures. Page 16 3.4 Budget framework FY 2019-2020 MTEF The 2019/2020 budget was prepared against a backdrop of slashed resource allocation to ASAL counties occasioned by new proposed revenue sharing formula. This has an impact on sectors spending in the Medium term. This section address the revenues and expenditure of county both current and projected 3.4 .1 Revenues The county equitable share reduced by 1.3% from ksh 6.9 billion to ksh 6.8 billion and local revenue collections target was also reduced to realistic figure of 150 million compared to previous year of ksh 250 million. Conditional allocations from national government has reduced in proposed budget budget policy statement by ksh 41 million and conditional grants from development partners increased by 24% from ksh 1.553 billion to Ksh 1.915 billion . Table 3: National Revenue Actual Budgeted Performance Budgeted Projected As per F.Y 2017/2018 2017/18 2018/2019 PBS 2019/2020 Equitable Share 6,659,100,000 6,659,100,000 6,939,400,000 6,851,000,000 Local Collections 250,000,000 86,657,552 250,000,000 150,000,000 Grants and loans 256,565,428 192,459,530 1,553,567,377 1,915,889,383 Conditional Allocations 727,272,975 603,980,736 775,767,878 734,154,638 7,892,938,403 7,542,197,818 Total Revenue 9,518,735,255 9,651,044,021 8,000,000,000.00 7,000,000,000.00 6,000,000,000.00 5,000,000,000.00 4,000,000,000.00 3,000,000,000.00 2,000,000,000.00 1,000,000,000.00 - Budgeted 2017/2018 Actual Budgeted2018/2019 Projected As per Local Revenue Performance2017/18 PBS2019/2020 Figure 3: NEaqtuiitoanblae lS hRareevenuLeo cal Collections Grants and loans Conditional Allocations Page 17 Table 4: Local Revenue Local Revenue Budgeted Actual Budgeted Projected As per 2017/2018 Performance 2018/2019 PBS 2019/2020 2017/2018 Cost Sharing 78,000,000 29,152,900 78,000,000 58,000,000 Single Business Permit 40,000,000 8,291,880 40,000,000 40,000,000 Bridge Cess and Other Misc. Income 25,000,000 2,481,760 25,000,000 25,000,000 Other Misc. Income 107,000,000 46,761,023 107,000,00 27,000,000 0 Total 250,000,000 86,687,563 250,000,00 150,000,000 0 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 - Local Revenue Cost Sharing Single Business Bridge Cess and Other Misc. Income Permit Other Misc. Income Budgeted 2017/2018 Actual Performance 2017/2018 Budgeted2018/2019 Projected As per PBS2019/2020 Figure 4: Local Revenue Cost sharing, single business permit and other miscellaneous income but unfortunately the county didn’t concentrate effort on property rate but plans are being to activate this item by developing provision to support its collection. Table 5: Local Revenue Trends FINANCIAL YEAR 2016/2017 2017/2018 2018/2019 2019/2020 Budgeted (M) 350 250 250 150 Actual (M) 80.6 86.7 0 0 Page 18 400 350 300 250 200 150 100 50 0 16/17 17/18 18/19 19/20 BUDGETED (M) ACTUAL(M) Figure 5: Local Revenue Trend 3.4.2 Expenditure Table 6: Expenditure Trend EXPENDITURE Budgeted Actual Budgeted Projected As 2017/2018 Performance 2018/2019 per PBS 2017/2018 2019/2020 Compensation of employees 2,983,492,218 3,159,371,416 3,321,048,728 3,950,494,525 Operation & Maintenance 1,940,563,027 1,604,062,779 1,724,817,169 1,643,912,094 Development 2,291,675,920 1,059,776,614 3,691,569,358 3,301,862,498 Compensation of employees (assembly) 395,786,612 393,606,281 - 420,000,000 Operation and maintenance (Assembly) 278,135,859 233,953,661 - 334,774,924 Development (Assembly) 80,000,000 70,000,000 70,000,000 - Total Expenditure 7,969,053,636 6,520,770,751 8,807,435,255 9,651,044,041 Page 19 Expenditure Trend 4,500,000,000 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 - Budgeted 2017/2018 Actual Performance Budgeted2018/2019 Projected As per PBS 2017/2018 2019/2020 Compensation of employees Operation & Maintenance Development Compensation of employees (assembly) Operation and maintenance (Assembly) Development (Assembly) Figure 6: Expenditure Trend From the graph the payroll expenditure has been growing by 15% for last 3 years and the county have now put frees on recruitment and trying to rationalize its workforce and after the exercise its believed the payroll will come down. The development allocation has stagnant for the last 3 years. Table 7: Impact of revised ceilings on forward estimates 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 Current Trend (B) 7.1 7.5 9.5 11.1 12.2 13.3 Trend due to revised ceiling(B) - - - 9.6 10.5 11.6 Page 20 14 12 10 8 6 4 2 0 16/17 17/18 18/19 19/20 20/21 21/22 Current Trend (B) Trend due to revised ceiling(B) Figure 7: Impact of Revised Ceiling on Estimates Table 8: Sector Allocation 2017/2018 2018/2019 DEPARTMENTS TOTAL TOTAL 2019/2020 ALLOCATIONS ALLOCATIONS Projection Agriculture, Livestock & Cooperatives 421,472,012 530,258,299 562,237,157 Gender ,Social Services & Sports 91,828,559 356,595,728 294,574,449 Roads and Transport a 515,595,025 366,071,734 321,743,927 Education & Labour 557,491,202 726,499,870 734,582,768 Environment, Energy & Natural Resources 86,625,358 82,493,988 139,723,935 Lands ,Housing and works, Urban Development 389,643,225 577,691,512 634,670,626 Finance & Economic Planning 1,441,225,909 1,079,424,710 1,330,879,016 Health & Sanitation 2,293,238,057 2,651,472,229 2,516,829,887 Trade, Enterprise Development and Tourism 193,614,398 158,939,255 163,602,259 Water & Irrigation Services 637,135,269 1,801,610,755 1,704,693,593 Executive Services 533,588,961 355,328,645 343,397,120 Page 21 County Public Service Board 49,448,530 51,048,530 49,334,379 Assembly 753,322,471 781,000,000 754,774,924 Municipal - - 100,000,000 TOTAL 7,964,228,976 9,518,435,255 9,651,044,041 3,000,000,000.00 2,500,000,000.00 2,000,000,000.00 1,500,000,000.00 1,000,000,000.00 500,000,000.00 - TOTAL ALLOCATIONS 2017/2018 TOTAL ALLOCATIONS 2018/2019 2019/2020 Projection Agriculture, Livestock & Cooperatives Gender ,Social Services & Sports Roads and Transport a Education & Labour Environment, Energy & Natural Resources Lands ,Housing and works, Urban Development Finance & Economic Planning Health & Sanitation Trade, Enterprise Development and Tourism Water & Irrigation Services Executive Services County Public Service Board Assembly Municipal Figure 8: Sector Allocation Page 22 CHAPTER FOUR: MEDIUM TERM EXPENDITURE FRAMEWORK Overview The Constitution of Kenya 2010 stipulates that County Governments should have reliable, stable and predictable sources and allocation of revenue. Garissa County receives revenue from four main areas: the equitable share, own source revenues, conditional grants, other loans and grants. 4.1. Resource Envelope Table 9: 2019/2020 Resource Envelope RESOURCE ENVELOPE Amount (Kshs) Equitable share 6,851,000,000.00 71% Conditional allocation 734,154,658.00 8% Level 5 Hospital 355,392,347.00 Compensation for foregone user 12,964,636.00 Rehabilitation of Village polytechnics 35,335,000.00 Road Maintenance Levy 198,547,781.00 Lease of Medical Equipment 131,914,894.00 Loans and Grants 1,915,889,383.00 20% Own Source Revenues 150,000,000.00 2% Total Revenue 2019/2020 9,651,044,014.00 100% Expenditure Recurrent Expenditure 5,849,181,544 61% Personnel Emoluments 3,995,494,526 Operations & Maintenance 1,853,687,018 Development 3,801,862,497 39% Total Expenditure 2019/2020 9,651,044,014.00 100% The above information of revenues is represented below in pie chart format: Page 23 The Resource Envelope 2% 20% Equitable share Level 5 Hospital 1% User foregone 2% Village poly 0% 4% Road Levy 0% Lease of Equipment Loans & Grants 71% Local Revenues Figure 9: The Resource Envelope In the 2019/2020 financial year, cumulative revenue amounts to Ksh. 9.6 billion, down from Ksh.10.162 billion budgeted in the current financial year (2018/2019). The drop in the total revenue is attributable to downward reviews of the revenue sharing formula by the CRA and own revenue by the county treasury. The current figures is the County’s best estimate and it excluded donor funds that will be factor in at the later stage as and when substantive figures are obtained. The 2019/20 revenue shall comprise of total exchequer issues of Kshs 8.5 Billion; including equitable share of Kshs 6.85 billion, other Conditional allocations of Kshs 734 million, loan and grants of 1.915 billion and locally collected revenue of Kshs 150 million. 4.2. Spending Priorities The medium term expenditure framework for 2019/20 – 2021/22 ensures continuity in resource allocation based on prioritized programs aligned to the third MTP of Vision 2030,and the second generation CIDP to accelerate growth, employment creation and poverty reduction. Page 24 Table 10: Spending priorities in Amount (Kshs). Sector/Sub-sector Allocations from Conditional Donor Development Recurrent Total Shareable Allocation Support Allocation. % Revenue Agriculture, 327,489,665 0 194,747,492 274,747,492 247,489,665 522,237,157 5.4% Livestock & Cooperatives Gender ,Social 106,574,449 30,779,568 75,794,881 106,574,449 1.1% Services & Sports Roads and 103,196,147 198,547,781 258,417,808 43,326,120 301,743,928 3.1% Transport Education & Labour 520,512,016 35,335,000 47,735,752 57,772,346 545,810,422 603,582,768 6.3% Environment, 124,723,935 60,000,000 64,723,935 124,723,935 1.3% Energy & Natural Resources Lands ,Housing 387,964,626 274,706,000 374,706,000 287,964,626 662,670,626 6.9% and Urban Development Finance & 1,103,178,877 287,700,139 367,700,139 1,023,178,877 1,390,879,016 14.4% Economic Planning Health & Sanitation 2,403,558,010 500,271,877 111,000,000 405,739,145 2,609,090,742 3,014,829,887 31.2% Page 25 Trade, Enterprise 163,602,259 70,000,000 93,602,259 163,602,259 1.7% Development and Tourism Water & Irrigation 584,693,593 1,000,000,000 1,402,000,000 182,693,593 1,584,693,593 16.4% Services Executive Services 283,397,120 - 283,397,120 283,397,120 2.9% County Public 47,334,379 47,334,379 47,334,379 0.5% Service Board Assembly 754,774,924 754,774,924 754,774,924 7.8% Municipal Boards 90,000,000 90,000,000 90,000,000 100% Grand Total Kshs. 7,001,000,000 734,154,658 1,915,889,383 5,849,181,544 9,651,044,041 100% Page 26 4.3. Medium Term Expenditure Estimates Table 11: 2019/2020, 2020/2021 and 2021/2022 Medium Term Expenditures Estimates Estimates Projection Projection Department 2019/2020 2020/2021 2021/2022 Agriculture, Livestock & Cooperatives 522,237,157 574,460,873 631,906,960 Gender ,Social Services & Sports 106,574,449 117,231,894 128,955,083 Roads and Transport 301,743,928 331,918,321 365,110,153 Education & Labour 603,582,768 663,941,045 730,335,149 Environment, Energy & Natural 124,723,935 137,196,329 150,915,961 Resources Lands ,Housing and Urban Development 662,670,626 728,937,689 801,831,457 Finance & Economic Planning 1,390,879,016 1,529,966,918 1,682,963,610 Health & Sanitation 3,014,829,887 3,316,312,876 3,647,944,163 Trade, Enterprise Development and 163,602,259 179,962,485 197,958,733 Tourism Water & Irrigation Services 1,584,693,593 1,743,162,953 1,917,479,248 Executive Services 283,397,120 311,736,832 342,910,515 County Public Service Board 47,334,379 52,067,817 57,274,599 Assembly 754,774,924 830,252,416 913,277,658 Municipal Boards 90,000,000 99,000,000 108,900,000 TOTAL 9,651,044,041 10,616,148,445 11,677,763,290 Page 27 4.4 Baseline Ceilings Table 12: 2018/2019 Baseline and Estimates for the 2019/2020 Department Baseline 2018/2019 Estimates 2019/2020 Shareable Conditional Donor Total Shareable Conditional Donor Total Revenue Allocation Support Allocation Revenue Allocation Support Allocation Allocation Allocation Agriculture, 430,258,299 0 150,000,000 580,258,299 327,489,665 0 522,237,157 194,747,492 Livestock & Cooperatives Gender ,Social 357,595,728 357,595,728 106,574,449 106,574,449 Services & Sports Roads and 183,363,376 182,708,358 0 366,071,734 103,196,147 198,547,781 301,743,928 Transport Education & 645,409,118 35,355,000 47,735,752 728,499,870 520,512,016 35,335,000 47,735,752 603,582,768 Labour Environment, 82,493,988 82,493,988 124,723,935 124,723,935 Energy & Natural Resources Lands ,Housing 454,185,512 233,506,000 687,691,512 387,964,626 662,670,626 274,706,000 and Urban Development Finance & 1,279,724,710 1,279,724,710 1,103,178,877 1,390,879,016 Economic 287,700,139 Planning Health & 2,001,442,084 557,704,520 122,325,625 2,681,472,229 2,403,558,010 500,271,857 111,000,000 3,014,829,887 Sanitation Page 28 Department Baseline 2018/2019 Estimates 2019/2020 Shareable Conditional Donor Total Shareable Conditional Donor Total Revenue Allocation Support Allocation Revenue Allocation Support Allocation Allocation Allocation Trade, 258,939,255 258,939,255 163,602,259 163,602,259 Enterprise Development and Tourism Water & 851,610,755 1,000,000,000 1,851,610,755 584,693,593 1,584,693,593 1,000,000,000 Irrigation Services Executive 456,328,645 456,328,645 283,397,120 283,397,120 Services County Public 51,048,530 51,048,530 47,334,379 47,334,379 Service Board Assembly 781,000,000 781,000,000 754,774,924 754,774,924 Municipal 0 0 90,000,000 90,000,000 Boards Total 7,833,400,000 775,767,878 1,553,567,377 10,162,735,255 7,001,000,000 734,154,638 915,889,383 9,651,044,041 Page 29 4.5 . Finalization of Spending Plans The MTEF budget will critically be reviewed with a view to rationalize non- priority expenditures and shift the savings to the priority programmes. The County Government will re-orient its expenditure programmes to focus on the following sectoral priorities: Water Services It is a constitutional right for every citizen to have access to enough, clean and reliable water. Over the MTEF period the sector aims to achieve expansion of water coverage and sewerage facilities; scaling up water storage; conservation and management of catchment areas; mitigation and adaptation measures on climate change; enforcement of sector laws and regulations for efficient management of this resource. Health Care The health department will implement five programs and sub programs in the financial years 2018/2019 to 2020/21 which are in line with priorities of the sector. The programs are aligned to the strategic objective and flagship project to achieve the Kenya vision to 2030. The Ministry strategic objective 2014-18, the sustainable development goals (SDGs) and the Kenya transformative agenda including the big four (4) initiatives and the core mandates of the sector. Overall, these programs aim at achieving improved accessibility, affordability of health services across the sectors. The following are programmes and respective sub programmes to be implemented during the periods. In the Financial year 2019/2020, funds will be allocated for provision of an efficient and high quality universal healthcare system that is accessible, equitable and affordable for every person in the County. This will be achieved through provision of funds for purchase of pharmaceuticals and non-pharmaceuticals; purchase of ambulances; purchase of diagnostic equipment; recruitment and re-training of health personnel; anti-malarial campaign; family planning campaigns, HIV/AIDS campaigns; training of health care providers on customer care; commemoration of health days; construction and establishment of a cancer centre; purchase of truck for the distribution of pharmaceuticals and non-pharmaceutical upgrading of level 4hospitals and strengthening of the community health services . Funds also will be utilized in completion and equipping health facilities at the ward levels. Table 13: Health sectorial programmes Programs Outcome Objective Program 1. Preventive, Reduce morbidity and To increase access to quality promotive and RMNCH mortality due to preventive and promotive care services preventative causes. services Program 2. Curative, referral Quality specialized health To improve provision of quality and specialized health services. specialized health services services Page 30 Program 3. Health research Increased knowledge and To provide stewardship and and development innovation through oversight on health training and capacity building and research research. Program 4. Administrative Leadership and To strengthen leadership, and support services management mechanism management and administration strengthened. in the sector. Program 5. Health policy Develop, strengthen and To attain Universal health standards and regulations health policy, standard coverage and regulations. Infrastructure Development In the medium term, the County Government will invest in infrastructural facilities which consist of Roads; Transport; Housing; Energy; Sewerage System; Market Development and Information and Communications Technology (ICT) programmes, among others. The overall goal of the priority is to have a well-developed and maintained physical infrastructure for rapid and sustainable economic growth Economic Development This strategic priority constitutes of programmes in Crop Production, Livestock Development and Fisheries, Agribusiness and value addition, Veterinary Services, Agricultural Engineering Services, Corporative development, Trade and Markets Development. Funds in this priority area will also be directed towards market fencing, construction of markets and toilets, formation of cooperatives to assist in marketing, provision of soft loans for value addition, provision of extension services, and vaccination and surveillance operations against zoonotic diseases. 4.6 Details of Sector Priorities Health and Sanitation The sector mandate is to reduce illnesses, disabilities, and exposure to risk factors through evidence-based interventions and best practices. The sector faces numerous challenges which include: Inadequate resources for effective implementation, inadequate infrastructure for service delivery, shortage of qualified health personnel, and high turnover of health care workers In the medium term, the sector will seek to address these challenges by implementing fully the CIDP and sector strategic plan for the directorate through continued investment in recruitment of health professionals, medical services, health infrastructure and improvement in the working conditions of medical practitioners. The 2019/20 – 2021/22 MTEF estimates for the sector is 31% out of which 13% of its total allocation will go towards development. In addition, the department will get additional funds from national government Page 31 in form of conditional allocations. In the medium term it is expected that allocation to the sector will progressively increase in absolute terms. In the Financial year 2019/2020 the health department will invest heavily to improve and enhance the services offered by Primary Health Centers (PHCs) in the rural communities while also strengthening the County referral hospital and seven (7) level 4 hospitals in the County. An equally important role of PHCs is to provide health education emphasizing family planning, hygiene, sanitation promotion, and prevention of communicable diseases. The rural population has to often travel to urban areas when they can no longer bear the suffering caused by the disease, thus increasing the load on hospitals in urban areas and ending up with serious complications that, in many cases, could have easily been treated at their early stages. To reduce the community suffering the County government of Garissa plans to implement and roll out the universal health Coverage (UHC) in line with national government agenda to reduce the health burden for our communities. This will be achieved through provision of funds for purchase of pharmaceuticals and non-pharmaceuticals; purchase of ambulances; purchase of diagnostic equipment; recruitment and re- training of health personnel; anti-malarial campaign; family planning campaigns, HIV/AIDS campaigns; training of health care providers on customer care; commemoration of health days; construction and establishment of a cancer centre; purchase of truck for the distribution of pharmaceuticals and non- pharmaceutical upgrading of level 4hospitals and strengthening of the community health services. Funds also will be utilized in completion and equipping health facilities at the ward levels. Purchases of utility and ambulances to enhance referral and routine operation will also be achieved. The UHC programme that is being piloted in four counties will equally be rolled in Garissa county and all eligible population registered and covered effectively. Every household will be issued with one UHC card to cover children below 18 years while children aged above 18 will each get their own UHC card. The UHC package is expected cater for outpatient care such as consultation, mental illness and emergency health care. Inpatient care will include medical and surgical services, enhanced maternal and child health services and enhanced HIV, tuberculosis and malaria treatment. Other public health services such as mosquito nets distribution, door-to-door immunization, public health education, and screening for non- communicable diseases will also be issued and this will greatly contribute to the vision 2030 and the big four agenda of national government Sector mandate To reduce illnesses, disabilities, and exposure to risk factors through evidence-based interventions and best practices.  County health facilities and pharmacies;  Ambulance services;  Promotion of primary health care;  Licensing & control of undertakings that sell food to the public  Health policy, planning & M&E  Family Health  Administration and Development Page 32 Key achievements  Increased uptake of Maternal, new born, child health and nutrition services  Increased curative and referral emergency services  Increased preventive and Promotive services  Strengthened Health information, M&E, Planning for informed decision making.  Enhanced financial accountability and staff management  Improvement of key health indicators maternal and child health  Reduction of communicable diseases eg cholera, dysentery  Reduction of Malaria incidence  Procurement and supplies of essential drugs and other commodities  Expansion and opening of critical health services MRI, ICU, radiology. Sector challenges  Inadequate resources for effective implementation and proposed  High turnover of Health care workers measures to  Lack of county health policy to guide the health sector overcome  Poor infrastructure and inadequate equipment’s  Expansive county and insecurity  High poverty among the community. Measures to overcome  Scale maternal health and seek for partnership with likeminded health partners  Scale up Community units’ services  Increase the resources envelope for all essential health programs  Sector wide approach to enhance integration and partnership  Close monitoring of the health workers and prudent use of finance  Hiring more health workers to meet the demand of growing health facilities.  Continuous replacement of health care lost due to turn over  Advocate for health financing from health development partners.  Strengthen referral system  Improve quality in all service delivery points  Open up new heath facilities  Construct new OPD, maternity and theatres  Strengthen disease surveillance and response  Data quality audits and verification in all health facilities  Improve and strengthen critical care service  Scale up child health nutrition Page 33  Scale up HIV/AIDS prevention and treatment services  Sustain and improve Tuberculosis, Leprosy and Lung Disease control and prevention strategies  Strengthen and improve diagnostic services (Laboratory services).  Strengthen critical care services  Expansion of facilities providing basic and comprehensive emergency care at sub county level.  Construction of staff housing.  Provision of modern medical equipment’s and comprehensive medical supplies.  Invest in health information and communication technology (ICT).  Provision of reliable transport system with proper maintenance.  Construction of health and nutrition storage facilities (warehouse) in each Sub County.  Promotion of innovative approaches/strategies like maternal shelter, output-based approach, Malezi Bora, nomadic clinic, integrated outreaches, and tele-medicine technology, etc.  Provision of comprehensive essential health package and UHC.  Operational research.  Monitoring and evaluation. Total budgetary Recurrent: Ksh. 2,609,090,742 ceilings Development: Ksh. 405,739,145 Agriculture, Livestock and Cooperatives This Sector comprises of three sub-sectors: Agriculture, Livestock and veterinary, fisheries and cooperative. The Sector goal in line with the Vision 2030 is ―to attain food security and sustainable irrigation land management. The Constitution, under Article 43 on the Bills of Rights, has provided for accessibility to adequate food of acceptable quality. Over the medium term the sector aims to address the challenges bedeviling it by raising agricultural productivity through value addition and adoption of new technologies; increased commercialization of local products; creating an enabling policy and legal framework, improving efficiency and effectiveness of sector institutions. The key challenges facing the sector include unfavorable climatic changes, lack of personal protective equipment’s at workplace, low productivity, low value addition, inadequate physical infrastructure and low access to financial services as well as affordable credit. The 2019/20 – 2021/22 MTEF estimates for the sector are estimated to be 5% of the budget. Out of this allocation 53% will go towards development. Page 34 Sector Mandate To promote, regulate, facilitate agriculture sector production for socio economic development and industrialization. Sector Policy Vision: Blueprint  The vision is to be the leading agency in provision of services towards achieving food security for all, employment and wealth creation in Garissa County. Mission:  To improve the livelihoods in Garissa County by promoting competitive farming, commercialized livestock production through local policy formulation, appropriate technology application, effective extension services and sustainable resources management. Key 1. Supply of farm inputs Achievements The Department was able to purchase assorted farm inputs that were distributed (detail) to the farmers as indicated below. Group farms that benefited are as indicated below: No. Item description Quantity 1. Cereals and legumes 2.4MT 2. Horticultural seeds 0.0253Mt 3. Agrochemicals 136.7 litres 4. Knapsack Sprayers 15 litres 2. Rehabilitation and maintenance of Farm access roads There are five farm access roads undergoing rehabilitation and maintenance. Sub County Ward Project Name Completion Status Balambala Balambala Egan Farm access road 72% Balambala Balambala Badha farm access road 42% Garissa Township Iftin Qolothey Farm access 79% Garissa Township Iftin Maramtu II Farm access 75% Balambala Balambala Dololomidi Farm access 56% road 3. Procurement & distribution of 10 number of Irrigation pump sets Page 35 The Department purchased and distributed 10 irrigation pump sets. The group farms that benefitted are listed below: Khahira Farm, Alaf Farm, Nathir Farm, Dima Farm, Maramtu 2 Farm, Furaha Farm, Leheye Farm Egan Farm, Khadija 2 Farm & Kulmis Farm. 4. Renovation of office blocks and other facilities at the Sub County headquarters and Institutions. The department renovated Sub County offices in the following Subcounties: Fafi,Modogashe, Balambala , Garissa township (ATC Office blocks and Garissa ATC Dining hall and Kitchen). 5.Extension service delivery Pastoralists and Farmers are reached with extension messages Sector Challenges 1.Succession management-key challenges of succession management in the and proposed department is contributed by the following factors; measures to overcome  Ageing workforce-42% of the workforce in the department are 52 years and above of which 46 officers are 57 years old and above.  Staffing gaps, especially technical staff. Proposed measures- staff recruitment and promotions 2. Lack of employees training and development-  Corrective measure- staff capacity development 3. Lack of Personal Protective Equipment’s at workplace(PPE)-  Proposed Corrective measure- procurement of protective wear for staff and 4. Office operations; inadequate office space, lack of internet connectivity, erratic supply of office stationeries. 5 .Frequent disasters – drought floods, disease, conflict etc as a result of climate change and variability  Proposed Corrective measure- employ DRR and CCA measures 6. Lack context based proper Policy and legal frame work Page 36 Sector medium In the Medium term, the sector expects to undertake multiple project as indicated term plan ( in line here below: with ADP)  Fruit juice processing unit in Garissa Township  Livestock markets development  Farm access roads in Garissa Township, Fafi & Balambala  Farm inputs procurement  Purchase of livestock drugs / vaccines and vaccination  Procurement of plant, machinery & equipment for AMS, Garissa  Construction of modern hostel block, conference hall, and dining hall at ATC Garissa  Procurement & installation of solar-powered irrigation pumping sets in smallholder irrigation schemes in Garissa Township, Fafi & Balambala  Strategic feed reserves Reduced livestock deaths during droughts, and contribute to EDE (ending drought emergencies)  Garissa Export slaughter house Produce meat for local and export markets  Feedlot development in Modikare holding ground(DFZ) Finish livestock for export market and for slaughter house  Camel milk processing To add value to camel milk being sold in Garissa and dadaab  Construction of fish ponds in 4 sub- counties (Garissa, Balambala, Fafi, & ijara)  Revolving cooperative loans kitty  Model dairy center of excellence at ATC in Garissa Sector current and ongoing grants from development Project name Current Grant Expected Grants partners (name (Ksh.) 201/2019. (Ksh.). 2019/2020 type of grant , ASDSP 20M 20M program funded and amount of KCSAP 55M 157M funding) RPRLP - - Control and eradication of PPR in 8.7M Nil shoats (SFAO) Total budgetary Recurrent: Ksh. 247,489,665 ceilings Development: Ksh. 274,747,492 Page 37 Roads and Transport The sectors objective is to develop, maintain and manage all county roads effectively and efficiently and ensure better transport services across Garissa County. In the medium term ,the ministry is planning to enhance road maintenance in the sub counties, improvement of major roads to gravel standards, upgrading of sub county headquarters access roads to bitumen standards, installation of road speed bumps on major roads in Garissa township, construction of Bus parks, Construction of designated parking, installation of street lights on sub county headquarters access roads, Construction of County Garage, procurement of road Construction plant and equipment and operationalization of MTF equipment. The 2019/20 – 2021 /22 MTEF estimates for the sector is 3% out of which 86% will be used for development. This allocation includes Road levy fund from national government. Sector Mandate To develop, maintain and manage all county roads effectively and efficiently and ensure better Transport services within Garissa County. Sector Policy The County Roads and Transport sector Blueprint Sector programs 1) Programme Name: Expansion, Upgrading and maintenance of Road Network and sub programs Objective: To Maintain, Expand and upgrade county road and program 2) Programme Name: Improvement of County Transport Management objectives Objective: To provide efficient, convenient, safe and user-friendly transport infrastructure in the county 3) Programme Name: Capacity Enhancement/Development Objective: To enhance Governance and capacity for service delivery Key For financial year 2017-2018: Achievements 317kms of roads Bush cleared (detail) 780kms of roads Graded 54.63kms of roads upgraded to Gravel Standard 200M. Drifts constructed (4No. drifts totaling to 200metres) 63 Lines of Culvert constructed (totaling to 500meters) 4392m of culverts and Drainage channels cleaned 90M3 Pothole patching of Garissa township roads Sector Challenges  Inadequate budget allocation that do not meet the county needs in terms of and proposed roads maintenance and improvement Page 38 measures to  Technical Personnel Gaps overcome  Lack of Vehicles for Project Supervision (Transport Challenges)  Lack of Professional Trainings/Capacity Building  Lack of Technical Working Tools  Lack of operational (Mechanical Transport Fund) MTF Equipment (Established in 2003 to provide funds for maintenance and renewal of vehicles, plants and equipment )  Road encroachments hindering construction of roads especially in Garissa Township and Sub-county Headquarters.  Lack of Roads and Transport Policy and legislation at the county level Sector current and The sector receives a conditional Grant from the Kenya roads board (KRB) through ongoing grants road maintenance levy fund. from development In the current financial year 2018-2019, the sector was allocated Kes 182,708,358. partners (name type of grant , program funded and amount of funding ) Total budgetary Recurrent: Ksh. 43,326,120 ceilings Development:Ksh. 258,417,808 Water & Irrigation Services It is a constitutional right for every citizen to have access to enough, clean and reliable water. Over the MTEF period the sector aims to achieve expansion of water coverage and sewerage facilities; scaling up water storage; conservation and management of catchment areas; mitigation and adaptation measures on climate change; enforcement of sector laws and regulations. The 2018/19 estimates for the sector is 16% of the total allocation of which 88% of it will finance development expenditure. Sector Water. Mandate a. To increase access and coverage to safe water and sewerage services in urban and rural areas. b. To minimize conflicts and disputes among water users. c. Responsible for drought mitigation Irrigation Supply of raw water to plant(irrigation) and removal of raw water from plant(drainage) To facilitate and coordinate irrigation and drainage development for agricultural production in a cost effective, socially beneficial and environmentally sustainable manner. Sector Policy Water Bill and Water policy passed at the assembly to be launched soon. Page 39 Blueprint Key Sector Water coverage in the county has increased by 75% in the last 4 years, The efficiency Achievements of the borehole rapid response team has increased by 90% in the last 2 year and The human resource capacity of the sector has increased by 30% in the last 2 years. Irrigation infrastructure has increased by 15%. The sector programs achievement as attached in the annex. Sector The sector suffers from an unacceptably low number of technical cadres which Challenges compromises the quality of work done by contractors, The sector does not have enough number of vehicles to attend borehole breakdown, there are no budgets and offices at sub county level therefore service at sub county level is compromised for both irrigation and water sub sectors. Flood have damaged irrigation infrastructure at the river banks. Sector The sector intends to address these challenges by investing heavily in recruiting more medium term technical cadres, establishing offices at the sub county level and purchasing of vehicles plan so as quality work and services are achieved, excavating mega pans either by the county or through partners so as to improve water storage, accessibility and livelihood, improve the storage facilities and expansion of water in the entire County. Sector The sector intends to use its allocated resources to expand its workforce by 60%, Resource increase the water and irrigation infrastructure in the entire county 20%, support to Usage GAWASCO for extension services. Sector Budget Recurrent: Ksh. 182,693,593 Ceiling Development: Ksh. 1,402,000,000 CHAPTER FIVE: FISCAL RISKS AND CONCLUSION 5.1 Risks To Realizing The Fiscal Framework The realization of development goals for the County will not be without risks and challenges as detailed below: i. Expenditure pressures especially perpetual increase in salaries and operational demand have put a strain on development expenditure. This demand is synonymous almost all departments and entities of the County leading to continued reallocation and rearrangement of spending plans. Page 40 ii. The underperformance in development attributable to a number of factors including delays in procurement process and inadequate capacity project management leading to low absorption of development budget. iii. Revenue performance may also pose a potential risk. The County will continually put up solid structures geared towards sealing loop holes and expanding revenue base. Full automation of revenue collection and other measures outlined above will be implemented in the near future. iv. Potential uncertainties associated with revised resource sharing formula by CRA could lead to some implementation of programs detailed in preceding policy documents like ADP and CIDP being rescheduled to future period or even overlook altogether. v. Delay in disbursement of fund. Delay in exchequer releases has, not only, resulted in delay in the county achieving its development aspirations but also dissuaded the county workforce hence compromising on service delivery. vi. The County’s economic performance may also be slowed own by unreliable weather conditions. This will affect agriculture, which is the main economic driver of the County. Resources therefore need to be set aside to mitigate the situation. 5.2 Conclusion The 2018 MTEF is marked by moderate growth in overall expenditure, taking into account the weaker global economic outlook and the need to stimulate economic growth. The set of policies outlined in this CFSP reflect the changed circumstances and are broadly in line with the fiscal responsibility principles outlined in the PFM law. Therefore, fiscal framework presented herein is prepared pursuant to the PFM Act and lays ground for the next financial year in terms of preparing the final Estimates as well as prioritization of resource allocation The budget frame work for 2019 -2020 will be purely guided prioritization of resource allocation to the sectors with focus mainly in Health sector with aim of addressing the big four Agenda of universal health care to enhance this there must be also Fiscal discipline which will ensure proper management of funds and delivery of expected output. Effective and efficient utilization of funds is pegged on sector capacities to deliver on their functions. In pursuit of this, effective budget implementation at the county level will be facilitated through capacity building and the development of systems for close monitoring and evaluation of spending entities to ensure that resource application bears the most fruit to the taxpayer. Involvement of all stakeholders in budget Page 41 formulation and execution is also key in enhancing overall budget implementation and the public will be key in shaping the final budget policies and allocations. The county will also revamp its revenue collecting and management systems with the goal of generating more revenues to strive towards budgetary self- reliance while ensuring the stability of our fiscal framework and financial heal health of the County. ANNEXES Annex 1: Resource Envelope RESOURCE ENVELOPE Amount (Kshs) Equitable share 6,851,000,000.00 71% Conditional allocation 734,154,658.00 8% Level 5 Hospital 355,392,347.00 Compensation for foregone user 12,964,636.00 Rehabilitation of Village polytechnics 35,335,000.00 Road Maintenance Levy 198,547,781.00 Lease of Medical Equipment 131,914,894.00 Loans and Grants 1,915,889,383.00 20% Own Source Revenues 150,000,000.00 2% Total Revenue 2019/2020 9,651,044,014.00 100% Expenditure Recurrent Expenditure 5,849,181,544 61% Personnel Emoluments 3,995,494,526 Operations & Maintenance 1,853,687,018 Development 3,801,862,497 39% Total Expenditure 2019/2020 9,651,044,014.00 100% Page 42 Annex 2: Summary Allocations DEPARTMENTS TOTAL ALLOCATIONS Recurrent Development 2020/2021 2021/2022 2019/20 Agriculture, Livestock & 522,237,157 247,489,665 548,349,015 575,766,466 Cooperatives 274,747,492 Gender ,Social 106,574,449 75,794,881 111,903,171 117,498,330 Services & Sports 30,779,568 Roads and 301,743,928 43,326,120 316,831,124 332,672,681 Transport 258,417,808 Education & 603,582,768 545,810,422 633,761,906 665,450,002 Labour 57,772,346 Environment, Energy & 124,723,935 64,723,935 130,960,132 137,508,138 Natural Resources 60,000,000 Lands ,Housing and Urban 662,670,626 287,964,626 695,804,157 730,594,365 Development 374,706,000 Finance & Economic 1,390,879,016 1,023,178,877 1,460,422,967 1,533,444,115 Planning 367,700,139 Health & 3,014,829,887 2,609,090,742 3,165,571,381 3,323,849,950 Sanitation 405,739,145 Trade, Enterprise Development 163,602,259 93,602,259 171,782,372 180,371,490 and Tourism 70,000,000 Water & Irrigation 1,584,693,593 182,693,593 1,663,928,273 1,747,124,687 Services 1,402,000,000 Executive 283,397,120 283,397,120 297,566,976 312,445,325 Services - County Public 47,334,379 47,334,379 49,701,098 52,186,153 Service Board - Assembly 754,774,924 754,774,924 792,513,670 832,139,354 - Municipal 90,000,000 90,000,000 94,500,000 99,225,000 Boards - TOTAL 9,651,044,041 6,349,181,543 3,301,862,498 10,133,596,243 10,640,276,055 Page 43 Page 44 Annex 3: Economic Classification Estimates ECONOMIC CLASSIFICATION ESTIMATES 2018/2019 BUDGET DEPARTMENTS TOTAL ALLOCATIONS RECURRENT DEVELOPMENT Salaries O & M Agriculture, Livestock & Cooperatives 522,237,157 160,683,966 86,805,699 274,747,492 Gender ,Social Services & Sports 106,574,449 40,000,000 35,794,881 30,779,568 25,226,220 Roads and Transport a 301,743,928 18,099,900 258,417,808 423,138,616 Education & Labour 603,582,768 122,671,806 57,772,346 Environment, Energy & Natural Resources 124,723,935 51,148,025 13,575,910 60,000,000 Lands ,Housing and works, Urban Development 662,670,626 240,000,000 47,964,626 374,706,000 Finance & Economic Planning 1,390,879,016 591,600,000 431,578,877 367,700,139 Health & Sanitation 3,014,829,887 1,944,090,742 665,000,000 405,739,145 Trade, Enterprise Development and Tourism 163,602,259 68,000,000 25,602,259 70,000,000 Water & Irrigation Services 1,584,693,593 109,489,481 73,204,112 1,402,000,000 Executive Services 283,397,120 198,821,475 84,575,645 - County Public Service Board 47,334,379 38,296,000 9,038,379 Assembly 754,774,924 420,000,000 334,774,924 municipal Board 90,000,000 60,000,000 30,000,000 TOTAL 9,651,044,041 4,370,494,525 1,978,687,018 3,301,862,498 Page 45 Annex 4: County Sector Ceilings DEPARTMENTS TOTAL Conditional Donor funds TOTAL Percentage ALLOCATIONS allocation Allocation 2019/20 Agriculture, Livestock & 327,489,665 0 194,747,492 522,237,157 5% Cooperatives Gender ,Social Services & Sports 106,574,449 106,574,449 2% Roads and Transport 103,196,147 198,547,781 301,743,928 1% Education & Labour 520,512,016 35,335,000 47,735,752 603,582,768 7% Environment, Energy & Natural 124,723,935 124,723,935 2% Resources Lands ,Housing and Urban 387,964,626 274,706,000 662,670,626 6% Development Finance & Economic Planning 1,103,178,877 287,700,139 1,390,879,016 16% Health & Sanitation 2,403,558,010 500,271,877 111,000,000 3,014,829,887 34% Trade, Enterprise Development 163,602,259 163,602,259 2% and Tourism Water & Irrigation Services 584,693,593 1,000,000,000 1,584,693,593 8% Executive Services 283,397,120 283,397,120 4% County Public Service Board 47,334,379 47,334,379 1% Assembly 754,774,924 754,774,924 11% Municipal Boards 90,000,000 90,000,000 1% TOTAL 7,001,000,000 734,154,658 1,915,889,383 9,651,044,041 100% Annex 5: Program and Sub program allocations Projected Projected Agriculture, Livestock & Cooperatives Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP1: Agriculture 402,017,632 421,121,930 463,234,123 CSP 1.1 Administrative and Support Services 389,217,632 391,921,930 431,114,123 CSP 1.2 Extension Support Services and Exhibitions 1,000,000 11,200,000 12,320,000 CSP 1.3 Agricultural Farm Inputs & Machinery 11,800,000 18,000,000 19,800,000 CP2: Livestock Production 127,293,167 100,215,227 110,236,750 CSP 2.1 Administrative and Support Services 155,293,167 89,215,227 98,136,750 CSP 2.2 Livestock Production 900,000 5,900,000 6,490,000 CSP 2.3 Veterinary Services 21,100,000 5,100,000 5,610,000 CP3: Fish production 200,000 300,000 330,000 CSP 3.1 Fisheries services 200,000 300,000 330,000 CP4: Co-operatives 747,500 600,000 660,000 CSP 4.1 Co-operatives Development 747,500 600,000 660,000 Total 580,258,299 522,237,157 574,460,873 Projected Culture, Women & Youth Estimates Projected Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Culture, Women & Youth 357,595,728 106,574,449 117,231,894 CSP 1.1 Administrative and Support Services 245,187,128 84,794,881 93,274,369 Page 46 CSP 1.2 Social Protection, Cultural Promotion & 1,779,568 1,957,525 Preservation 1,675,000 22,000,000 CSP 1.3 Youth & Sports 20,000,000 110,733,600 Total 106,574,449 117,231,894 357,595,728 Projected Projected Roads and Transport Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP1: Roads and Transport 366,071,734 301,743,928 331,918,321 CSP1.1 Administration and Support Services 76,863,376 43,326,120 47,658,732 CSP 1.2 Roads and Transport 289,208,358 258,417,808 284,259,589 Total 366,071,734 301,743,928 331,918,321 Projected Projected Education and Labour Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Education 548,169,741 417,814,362 471,695,798 CSP 1.1 Administration and Support Services 465,801,141 264,542,016 290,996,218 CSP 1.2 E.C.D 34,412,400 85,437,346 106,081,081 CSP 1.3 Vocational Training 47,956,200 67,835,000 74,618,500 CP 2 Labour 180,330,129 185,768,406 204,345,247 CSP 2.1 Human Resources 151,481,752 91,054,000 100,159,400 ICT & Libraries 28,848,377 94,714,406 104,185,847 Total 728,499,870 603,582,768 676,041,045 Projected Projected Environment, Energy and Natural Resources Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Administration and Support Services 52,983,442 101,148,025 111,262,828 CSP 1.1 Administration and Support Services 52,983,442 101,148,025 111,262,828 CP 2 Environment and Natural Resources 23,910,546 13,575,910 14,933,501 CSP 2.1 Environmental management system 11,010,546 5,000,000 5,500,000 CSP 2.2 Natural resource management 12,900,000 8,575,910 9,433,501 CP3 Energy Development 5,600,000 10,000,000 11,000,000 CSP 3.1 Energy development 5,600,000 10,000,000 11,000,000 Total 82,493,988 124,723,935 137,196,329 Projected Projected Lands, Urban Development, Housing & Public Works Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1: Administration 244,185,512 520,670,626 572,737,689 CSP 1.1 Administration & Support Services 244,185,512 520,670,626 572,737,689 CP 2: Lands & Housing 229,600,000 77,000,000 84,700,000 CSP 2.1 Lands 79,800,000 42,000,000 46,200,000 CSP 2.2 Housing and Public works 149,800,000 35,000,000 38,500,000 CP 3: Urban Development 266,870,626 65,000,000 71,500,000 CSP 3.1 Urban Planning and Disaster Management 262,522,620 4,000,000 4,400,000 CSP 3.2 Urban Sanitation and Development 4,348,006 11,000,000 12,100,000 Page 47 CSP 3.3 Municipalities 0 50,000,000 55,000,000 Total 740,656,138 662,670,626 728,937,689 Projected Projected Finance & Economic Planning Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP1 Administration and support services 570,000,000 870,382,251 957,420,476 CSP 1.1 Administrative and Support services 257,000,000 526,082,251 578,690,476 CSP 1.2 Special Programmes Services 313,000,000 344,300,000 378,730,000 CP2 Public Finance management 448,178,877 492,996,765 542,296,441 CSP2.1 Accounting Services 47,000,000 51,700,000 56,870,000 CSP2.2 Budget Formulation, Coordination and 24,000,000 26,400,000 29,040,000 Management CSP2.3 Audit services 44,060,000 48,466,000 53,312,600 CSP2.4 Economic Planning and Monitoring 53,600,000 58,960,000 64,856,000 CSP2.5 Revenue Mobilization 222,518,877 244,770,765 269,247,841 CSP2.6 Supply Chain Management Services 57,000,000 62,700,000 68,970,000 CP3 Donor Co-ordination 25,000,000 27,500,000 30,250,000 CSP 3.1 Donor Co-ordination 25,000,000 27,500,000 30,250,000 Total 1,043,178,877 1,390,879,016 1,529,966,917 Projected Projected Health and Sanitation Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Administration and Support Services 1,820,305,625 2,368,590,742 2,605,449,816 CSP1.1 Administration and Support Services 1,820,305,625 2,368,590,742 2,605,449,816 CP 2 Curative Services 848,950,000 633,739,145 697,113,060 CSP 2.1 Medical Products, Appliances and Equipment 389,500,000 235,000,000 258,500,000 CSP2.2 Development of Health Facilities 400,000,000 323,739,145 356,113,060 CSP 2.3 Referral Services 59,450,000 75,000,000 82,500,000 CP 3 Preventive and Promotive Services 12,216,604 12,500,000 13,750,000 CSP 3.1 Health Promotion and Campaign 2,375,645 5,500,000 6,050,000 CSP 3.2 Public Health Services 4,018,450 4,500,000 4,950,000 CSP 3.3 Nutrition 5,822,509 2,500,000 2,750,000 Total 2,681,472,229 3,014,829,887 3,316,312,876 Projected Projected Trade, Enterprise Development and Tourism Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Administration and Support Services 240,709,255 75,372,259 82,909,485 CSP 1.1 Administration and Support Services 240,709,255 75,372,259 82,909,485 CP 2 Trade and Investments 1,784,720 21,784,720.00 23,963,192 CSP 2.1 Trade and Development 1,784,720 21,784,720 23,963,192 CP 3 Enterprise Development 560,080 150,560,080 165,616,088 CP 3.1Enterprise Development 560,080 60,560,080 66,616,088 CP 4 Weight & Measures 1,685,200 1,685,200.00 1,853,720 CSP 4.1 Weight and Measures 1,685,200 1,685,200 1,853,720 CP 5 Tourism 14,200,000 4,200,000.00 4,620,000 CSP 5.1 Tourism Development 14,200,000 4,200,000 4,620,000 Page 48 Total 258,939,255 163,602,259 179,962,485 Projected Projected Water and Irrigation Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP Water Services CSP1.1 Administration and Support Services 79,290,755 1,149,231,113 1,021,666,459 CSP1.2 Water Resource Management 92,320,000 82,072,480 72,962,435 CSP1.3 Water Infrastructure Development 460,000,000 308,940,000 274,647,660 CP2: Irrigation Services 44,450,000 39,516,050 CSP 2.1 Irrigation Development 50,000,000 44,450,000 39,516,050 Total 681,610,755 1,584,693,593 1,408,792,604 Projected Projected Executive Services Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 Executive Services CSP 1.1 Governor Operations 82,500,000 81,500,000 90,825,000 CSP 1.2 Deputy Governor Operations 42,190,000 40,700,000 47,985,000 CSP1.3 County Secretary 46,846,215 40,000,000 49,350,000 CSP 1.4 Operations & Sub County Administration 86,980,000 105,397,120 89,750,000 CSP 1.5 Intergovernmental & Institutional Relations 17,812,430 15,800,000 19,740,000 Total 276,328,645 283,397,120 297,650,000 Projected Projected County Public Service Board Estimates Estimates Estimates Sub Programs 2018/2019 2019/2020 2020/2021 CP 1 County Public Service Board 51,048,530 47,334,379 52,067,817 CSP 1.1 Administrative And Support Services 51,048,530 47,334,379 52,067,817 Total 51,048,530 47,334,379 52,067,817 Assembly Budget 711,000,000 754,774,924 792,513,670 GRAND TOTAL 9,651,044,041 Page 49 Annex 6: List of Development Projects MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR County Finance Headquarters On going Township Township 32,000,000.00 Audit system Automation New Township Township Revenue Automation New Township Township 40,000,000.00 Purchase of 2 Life Saver Boats New Township Township 8,000,000.00 Capital grant to be distributed latter 287,700,139.00 Total 367,700,139.00 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR fruit processing Agriculture and livestock plant proposed Garissa Township 50,000,000.00 livestock marketing infrastructure Dvt proposed Garissa Township 10,000,000.00 Farm access roads dvt proposed All Subcounties ALL 10,000,000.00 Farm input supply proposed All Subcounties ALL 10,000,000.00 Capital Grant 194,747,492.00 Total 274,747,492.00 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR all sub- TRADE Revolving fund proposed all sub-counties counties 50,000,000.00 construction of market stalls proposed Masalani Ijara 10,000,000.00 construction of market stalls proposed Dadaab Dadaab 10,000,000.00 Total 70,000,000.00 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR Gender ,Social Services & Sports Construction of TOWNSHI SPORTS stadium ONGOING TOWNSHIP P rehabilitation of SPORTS sports grounds NEW SIX ALL 15,779,568 procurement of sports kits and CONTINUEIN SPORTS equipment G GSA COUNTY ALL construction of additional office TOWNSHI YOUTH AND SPORTS space and toilet NEW TOWNSHIP P Purchase of motor YOUTH AND SPORTS vehicle Page 50 Creation of youth YOUTH AND SPORTS friendly centres NEW Donations(Essenti al equipments and tools to disable, vulnerable groups CONTINUEIN ACROSS THE SOCIAL SERVICES and institutions ) G COUNTY ALL 15,000,000 Construction of TOWNSHI CULTURE cultural cottages NEW WABERI P Landscaping of TOWNSHI CULTURE cultural centre NEW WABERI P DAADAB GENDER,CULTURE Construction of AND AND SOCIAL sub- county office DAADAB AND MASALA SERVICES NEW MASALANI NI GENDER,CULTURE AND SPORTS Purchase of bus TOTAL 30,779,568 NAME OF THE SUB AMOUNT SECTOR STATUS LOCATION PROJECT COUNTY ALLOCATED Education & Labour Construction of 30 No. ECD classrooms (2 Classrooms per all sub ECD ward) proposed 30 wards counties 11,437,346 Construction of Motor Vehicle Mechanic (MVM) Workshop in Garissa TIVET Polytechnic proposed township Township Construction of Motor Vehicle Mechanic (MVM) Workshop in Mkono TIVET Polytechnic proposed township Township Provision of teaching and learning materials for vocational centres in the all sub TIVET county proposed all wards counties Purchase of Educational Aids & Related ECD materials proposed Construction of chain link fencing of 20 ECD centers ECD in the county proposed 20 centers 11,000,000 Construction and furnishing of 3 model ECD centres in three 3 sub ECD sub counties proposed 3 sub counties counties capital grant 35,335,000 ICT AND LIBRARY Page 51 Establish e- Garissa County Government Platform Across County service sectors Proposed Construction and equipping of one sub county library in Modogashe Proposed modogashe Modogashe Renovation and Repair of Garissa KNLS Proposed Garissa Purchase and equipping of mobile library Van. Proposed LABOUR Construction of subcounty labor all sub offices proposed All sub counties counties Construction of county huduma centres proposed 3 sub counties TOTAL 57,772,346 Sub Sector Project Status Location Estimated cost County Roads and Transport Expansion/Openin g up of Balambala New Balambala 8,552,861 sub-county rural access roads Expansion/Openin g up of Lagdera New Lagdera 8,552,861 sub-county rural access roads Expansion/Openin g up of Fafi sub- New Fafi 8,552,861 county rural access roads Expansion/Openin g up of Dadaab New Dadaab 8,552,861 sub-county rural access roads Expansion/Openin g up of Hulugho New Hulugho 8,552,861 sub-county rural access roads Improvement of Bura-Masalani New Ijara/Fafi 8,552,861 Road Installation of pumps, road safety signs and New Garissa 8,552,861 road names in Garissa township conditional 198,547,781 Allocation Total 258,417,808.00 Page 52 Sub Sector Project Status Location Estimated cost County Environment, Energy & Natural Resources climate fund Energy Development support New Garissa Garissa Environment climate change 60,000,000 TOTAL 60,000,000 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR Lands ,Housing and works, Urban Development Construction of deputy Governor’s Garissa public works official Residence New Garissa township Township 20,000,000.00 Rehabilitation and maintenance of 2 Garissa Housing No. of units New Garissa township Township Public participation and Awareness for spatial panning Garissa Sub Creation in 7 sub county Land and Physical county Garissa Sub county headquarter Planning headquarters New headquarters s Garissa Sub county Land and Physical Reconnaissance Garissa Sub county headquarter Planning survey New headquarters s Garissa Sub county Land and Physical Field work and Garissa Sub county headquarter Planning Data collection New headquarters s Garissa Sub county Land and Physical Garissa Sub county headquarter Planning Plan preparation New headquarters s Public participation and Awareness Garissa Sub Creation in 7 sub county Land and Physical county Garissa Sub county headquarter Planning headquarters New headquarters s Garissa Sub Surveying of plots county Land and Physical within the sub Garissa Sub county headquarter Planning counties New headquarters s 15,000,000.00 Purchase of motor Garissa Urban Development bikes New Garissa township Township 4,000,000.00 Construction and rehabilitation of Garissa sub county towns administration Garissa Urban Development offices New Garissa township Township 5,500,000.00 construction of Municipality firefighting station New Masalanu Ijara 50,000,000.00 Page 53 Construction and rehabilitation of Garissa sub county towns administration Garissa Urban Development offices New Garissa township Township 5,500,000.00 capital grant 274,706,000.00 Total 374,706,000.00 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT PROJECT STATUS LOCATION COUNTY ALLOCATED Health & Sanitation Equipping of 7 Sub 25,000,000 no. dispensaries proposd Each sub counties Counties Hulugho SCH, Bura Construction 5 SCH, Balambala, Wards in 5 Sub 30,000,000 Iftin SCH and Counties proposd Kotilre Equipping for new maternities Five high volume 12,000,000 health facilities. proposd facilities subcounties Construction of 5 Water tanks and 10 twin latrines and 5 incinerators 25,000,000 for health facilities and Sub dispensaries proposd Need based Counties Repair of TB isolation wards in 5,000,000 County referral Hospital (PGH) proposd GCRH Gsa Sub Construction and equipping of two Iftin SCH 50,000,000 operating theatre proposd Gsa Sub Construction and equipping of 2 Hulugho and Iftin 40,000,000 outpatient Departments proposd Hulugho Construction of 7 7 sub 7 sub counties 50,000,000 New Dispensaries proposd counties Constructing and Equipping of 36,824,251 Cancer Centre proposd GCRH Gsa Sub lease of medical 131,914,894 equipment Total 405,739,145.00 MINISTRY NAME OF THE SUB AMOUNT /DEPARTMENT/SECT STATUS LOCATION PROJECT COUNTY ALLOCATED OR Water and Irrigation Drilling of new Water Services new Jariot Township 10,000,000.00 boreholes Abdi lugey Township 10,000,000.00 Nanigi Fafi 10,000,000.00 Galmagala Fafi 10,000,000.00 Malkagaras Balambala 10,000,000.00 Dertu dadaab 10,000,000.00 madogshe 1 lagdera 10,000,000.00 madogshe 2 lagdera 10,000,000.00 Page 54 Feasibility studies of sub surface dam new madogashe lagdera 40,000,000.00 Design and construction Expansion of new masalani ijara 30,000,000.00 water supply korkora Township 10,000,000.00 Danyere Balambala 10,000,000.00 Procuring of desalination new shimbirey Balambala 10,000,000.00 machine hulugho hulugho 10,000,000.00 new dams and Desilting expansion new hulugho hulugho 13,000,000.00 protection of water pans Sanagilu hulugho 10,000,000.00 ijrara ijara 10,000,000.00 hulugho hulugho 10,000,000.00 ijara ijara 10,000,000.00 maalimin madogashe 10,000,000.00 Extension of reticulation system, township township 10,000,000.00 solarisation of gawasco borehole Extension of pipeline to 20schools, new township Township 10,000,000.00 10health facilities and 10govt institutions 1,000,000,000. capital grant 00 Purchase of motor vehicles, motor township,fafi,balamb Irrigation new Township 44,000,000.00 cycles and pump la sets (farms) Setting pilot Township small Irrigation new 3no. 60,000,000.00 ,fafi ,ijara schemes Rehabilitation of new iftin 2no. Township 10,000,000.00 existing schemes Completion of balambala 2no. Balambala 10,000,000.00 ongoing schems Abaqeyle dadaab 5,000,000.00 1,402,000,000. Total 00 N/B The project in water sector is normally need based and proposed project in CFSP in Water sector remain draft until budget approval . Page 55