Kidero’s plan unrealistic, say experts
Nairobi’s projected Sh8.1 billion development budget for the next financial year has been described as a drop in the ocean in the face of the massive infrastructure demands in the county.
Instead, Governor Evans Kidero has been asked to bite the bullet and right-size the workforce and seal corruption loopholes to raise the allocation for essential projects.
Economist Polycarp Ngoje said the projections were lopsided and going by past experiences, there was likely to be a variation in terms of what is budgeted and what will be spent on development.
“We are likely to see a mismatch in the development expenditure. The revenues are not guaranteed as the court cases on parking fees demonstrate. In such instances, the first casualty will be the development projects,” he said.
County Hall expects to raise Sh27.2 billion in the coming financial year, as it seeks to raise the development component of its budget to the legally set basement level of 30 per cent.
The amount is Sh6 billion more than the revised budget for the current financial year. Initially, the approved budget was worth Sh25 billion but this was recently revised to Sh21 billion due to under-performance in revenue collection.
As a consequence, the allocation for development was slashed to Sh3.5 billion (16.7 per cent of the budget) contrary to the 30 per cent minimum set by the Public Finance Management Act.
Thousands of projects recently proposed by the public for action may end up being put on the back burner as the recurrent expenditure continues to gobble up a sizable fraction of the revenues.
According to the Fiscal Strategy Paper for the Financial Year 2014/15, submitted by the Executive to the Assembly late last month, the recurrent expenditure is expected to consume Sh19.1 billion (70 per cent) with most of it going to wages for the county’s 11,000 workers.
It lists the projected wage bill at Sh12.6 billion (46 per cent of the total revenues).
The latter allocation means the county is unlikely to reduce its workforce despite Dr Kidero recently expressing his discomfort with the bloated number.
“In ideal situations personnel costs should not exceed 30 per cent of the total expenditure. The way forward to address these challenges includes right sizing and a coherent HR policy and program,” he said in his State of the County address.
Consumer Federation of Kenya Secretary-General Stephen Mutoro said the demand for development is very high in the county adding that projects on street lighting, roads, markets hospitals and schools need a substantial budget.
Drop in the ocean
“Sh8.1 billion is a drop in the ocean. If we want to transform Nairobi County as per the expectations we need to be spending as much as 60 per cent on development,” he added.
Several projects have already been mentioned in the last few weeks for the budgeting process with education likely to be a big gainer.
Although not a devolved function, the county government has committed itself to spend Sh2 billion in the 2014/15 budget for infrastructure upgrade especially for primary schools.
Another key project mentioned is the setting up of a 20 bed maternity wing at Mutuini Hospital at an estimated cost of Sh60 million.
The county also plans to set up 17 green houses for each sub-county as it aims to step up urban agriculture.
The fate of the Ward Development Fund however remains unclear after the Controller of Budget Agnes Odhiambo indicated she would not sanction Nairobi’s budget with such a provision.
She said that the Act forming the Fund had violated the Public Finance Management Act.
The draft County Allocation of Revenue Bill 2014 has proposed the county receive Sh13.03 billion, an increase of Sh3.1 billion from the allocation in the current financial year.
This is Sh1.03 billion more than the county’s projection.
County Assembly Standing Orders provide that sectoral committees submit their recommendations on the fiscal paper to the Budget and appropriations Committee.
The Appropriations Committee is expected to table a report in the House by March 18.