Wajir County’s budget statement for the fiscal year 2014/2015 was today, June 26, 2014 delivered to the County Assembly by the Executive Committee Member – Finance and Planning Mr. Salah Abdi.
The budget covers the period July1,2014 up to June 30, 2015.
Here is the full statement as presented to the assembly by the Finance CEC (Courtesy of WCGPS)
COUNTY GOVERNMENT OF WAJIR
Fiscal Year 2014/15
(1st July -30th June) By
Mr. Salah A.Abdi
County Executive Member Finance and Economic Planning
B U D G E T S TAT E M E N T F O R F I S C A L Y E A R 2 0 1 4 / 1 5
DELIVERED TO THE COUNTY ASSEMBLY BY MR. SALA ABDI, COUNTY EXECUTIVE COMMITTEE MEMBER- FINANCE AND ECONOMIC PLANNING, ON 26TH JUNE
1ST JULY, 2014 TO 30TH JUNE, 2015!
1. Mr Speaker, I stand with great honour and privilege to present second county budget highlights under the good leadership of H.E the Governor, AHMED ABDULLAHI MOHAMAD, in accordance with section 130 (1)(a) of the Public Finance Management Act,
2. I am humbled to express my sincere gratitude to His Excellency the Governor for appointing me as the CEC- Finance and Economic Planning and empowering me to spearhead our county economic and investment agenda as well as propel our economy to greater heights.
3. Mr Speaker, I take this early opportunity to also thank the Budget Committee, under the chairmanship of Hon Abdullahi Ali, for their tireless effort during the county assembly review of the Budget Estimates that we presented on 30th April 2014.
4. Mr Speaker, it is over a year since our county started operations after the March 2013 general elections. Therefore, we must direct all our efforts to urgently address the main challenges that continue to trouble our people namely: youth unemployment; poor county infrastructure as well as high poverty. As H.E the Governor stresses in all the forums, the county will focus to create employment to the youth, improve the infrastructure as well as strive to feed its people in an effort to improve the lives and livelihood of all the county citizens.
5. Mr Speaker, we acknowledge that all these will only be achieved through tough choices, hard work, and determination by all the people of Wajir. It goes beyond not just identifying hurdles to progress and proposing solutions, but also rolling up our sleeves and working
together across the political divide to make painful decisions and implement sensible economic and tax reforms. In order to achieve a common future that we all desire, we all shoulder the responsibility to build the Wajir we want.
6. Mr Speaker, despite the progress we have made over the past one year, we still face various development challenges. The majority of our youth are unemployed, poor road network, inadequate water sources, insecurity and about half our population still lives in abject poverty. Actually, the bigger population of our people are still food insecure and have low access to quality health services. As a result we are faced with several social and economic challenges, including high rates of crime.
7. Through this budget highlights therefore, we need to realise that for us to engage the youth in gainful employment and reduce poverty significantly, we have to focus on growing and stabilising our economy overtime and in addition the growth should be all inclusive. For us to achieve this there is need to continue investing in infrastructure; provide quality education and healthcare; provide portable water to all residents and intensify reforms in the public service to enhance efficiency and effectiveness.
8. So our action is needed now. We must therefore drive the necessary change in ensuring that we strengthen our institutions to deliver public services effectively; we transform the structure of our economy, so that all county citizens share in the opportunities that our county offers; transform our economy in aim to drive inclusive and broad-based development. The County Government is ready to work tirelessly to build a future in which all its people can take pride and equitably share the benefits. So the key message of this budget is, therefore, “bringing services and resources closer to the people’’.
9. Mr Speaker, this year’s proposed budget takes into account the key economic areas which will lead to county economic growth and stability. Going forward therefore, it will be necessary for the county to:
i. Invest in infrastructure, especially in roads and energy;
ii. Provide adequate resources for priority social programmes in water, health and education;
iii. Allocate funds on new technologies in agriculture to assure food security;
iv. Reform the public service to make it efficient and effective in service delivery and facilitate private sector growth;
v. Set aside adequate resources for disaster risk management.
10. Mr Speaker, it is my privilege today to present Wajir County economic action plan, a plan focused and anchored on infrastructure development, employment, economic growth and better living standards for all the citizens of our county. First I will highlight the economic and fiscal policy measures the county plans to implement, as well as to share with you the spending plans and tax revenue measures and some of the projects and programmes that we will undertake over the period ahead. However, before I proceed to elaborate on programs, I will highlight the economic context in which this budget has been prepared.
1.2 Economic Context
11. Mr Speaker, the national economic growth is very promising despite the challenges of implementation of county governments. After growing by 4.7 per cent in 2013, the national economy is now expected to grow by 5.8 per cent in 2014 and expected to rise to 7 per cent by 2017. In terms of fiscal years, the projections translate to 5.3 per cent in 2013/14, 6.1 per cent in 2014/15, 6.6 per cent in 2015/16 and 6.9 per cent in 2016/17. This level of growth will be supported by increased production in agriculture, continued investment in infrastructure projects, expansion of activities in other sectors of the economy such as building and construction, manufacturing, retail and wholesale and financial intermediation, among others. The growth will also benefit from increased investments and domestic demand, following investor confidence and the on-going initiatives to deepen regional
12. Domestically, the county economy remains resilient, with most of product prices stabilising. However, low agriculture productivity, weak manufacturing sector and weak transport system in addition to ever rising imports to the county and deteriorating exports, remains a major concern. The 2014 C-FSP provides details of the government growth projections for this year and over the medium term. The county Government aims to ensure economic stability through investment in Infrastructure and new technologies in both agriculture and manufacturing. Given the county’s limited and constraint public resources at
our disposal, we need the active participation of the private sector to meet the economy’s resource requirements. The county government will provide the best business environment for the private sector to thrive as well as form a robust Private-Public-Partnership (PPP) agenda.
13. On the fiscal front, we experienced shortfall in terms of the revenue we had projected for the financial year 2013/14 which was set at Kshs 120M. By the end of December 2013 we had collected Kshs 29M and hence the target was reviewed down to Kshs 70M. A rationalization in the context of Supplementary Budget Estimates was done in order to live within fiscal framework ending June 2014. All the gaps arising were financed through funds from the national government equitable share.
14. So, Mr Speaker that is the brief outlook of our economic situation and budget outlay. Going forward therefore, the big question is what is the county government plan to promote growth and development in Wajir?
2.0 MEDIUM TERM FISCAL FRAMEWORK
15. Over the medium term, the revenues are expected to increase by approximately 10%
while both recurrent and development expenditure are expected to share the revenues on a
50% basis. The total expenditure for FY 2014/ 15 is at Kshs 6,278,070,000 where by recurrent expenditure is Kshs 3.11B and capital expenditure takes Kshs 3.14B.
16. The total revenue estimates for fiscal year 2013/14 is Ksh 6.278 billion, comprising of
national government’s equitable share allocation Kshs 6,158,038,375 projected local revenues Kshs 102,290,000 and grant from DANIDA Kshs 17,710,000. The total revenue estimate represents an increase of approximately 10 per cent over the Budget Estimates for
17. The local revenue has had challenges in this current year as a result of leakages. With the automation of revenue collection, I believe this challenge will be properly addressed to ensure maximization of revenues within the county. As the saying goes ‘‘kulipa ushuru ni kujitengemea,’’ we have to develop the culture of prompt payment of taxes and rates amongst our people for this will definitely improve our revenues which will be channelled back to development projects and hence help build the ‘Wajir We Want’.
18. In respect to expenditure Mr Speaker, the budget estimate for 2014/15 stands at Ksh
6.278 Billion. Of this amount, the gross county recurrent expenditure is estimated at Ksh
3.113 Billion while gross development expenditure is estimated at Ksh 3.165 Billion. Therefore, out of all our revenues, 50 per cent will be channelled to development projects; this is a very good indicator of our economy going forward. These development projects are mainly in Roads, Water, Health, Agriculture, Trade and ICT sectors and will aim at bringing services and development at large to every part of our county.
19. Mr Speaker, it is unfortunate that to date our development partners are yet to commit themselves on the amount of grants they will contribute towards the development of this county for the next financial year. In addition, we are yet to receive the projects they have factored to finance during the 2014/15 financial year. Nevertheless, our budget for FY2014/15 will be fully financed by revenues from the equitable share allocation from the national government alongside our local revenue collection. Therefore members our fiscal framework for 2014/15 is fully financed
2.1 Decentralizing Further
20. Mr Speaker, during the first year in operation, nearly all the services were centralised at the county headquarters. This was due to lack of decentralised structures at the sub-county and ward level. However, the decentralised units have been set-up through the department of Public Service, Labour and Decentralized Units and hence will be fully operational starting
1st July 2014. In 2014/15 therefore we expect to further decentralise services and funds to the sub-counties and ward level in order to ensure easy access to services by all the people of this county. We will set up electronic revenue collection centres at all the sub-counties to ensure efficiency in revenue collection as well as reduce revenue leakages.
3.0 TAX MEASURES
3.1 Proposed Tax Measures
21. Mr Speaker, the tax measures will focus on accelerated county economic growth as well as establishing key economic enablers needed to attract investment. These include:
• Ensuring Equity and Fairness in our Tax System, deepening Tax Reforms and
Enhancing Tax Administration; and
• Further adopting Financial Systems for Sustainable Development.
4.0 THE COUNTY GOVERNMENT’S ACTION PLAN AND HIGHLIGHTS OF THE FY 2014/15 BUDGET
22. Mr Speaker, the county government’s broad development policies, gives clear guideline of where this county wants to be in the next five years. It provides the government with a clear map of the required infrastructure development in an effort to avail non-discriminatory world class services and improved lives and livelihoods to all the people of our county.
23. This year’s budget therefore, outlines several ways to achieve this success which include:
• Creating conducive business environment by maintaining macroeconomic stability, deepening structural and governance reforms to reduce the cost of doing business and improving security in order to encourage innovation, investment, growth and expansion of economic and employment opportunities;
• Investing in agricultural transformation and food security, including putting at least
one hundred acres of new land under irrigation in order to expand food supply, reduce food prices so as to bring down the cost of living, support expansion of livestock and agro-processing industries and spur export.
• Investment in key infrastructure such as road networks, energy and water supplies to
reduce cost of doing business and make our products cheaper and competitive in the domestic and international markets;
• Investing in quality and accessible healthcare services and quality education as well as
social safety net to reduce burden on the households and complement and sustain our long term growth and development;
• Support for Small and Medium Enterprises through targeted financial support, skills
development, and access to market and restructure public procurement system so as to expand business and to reduce joblessness among our young people;
• Continuing with public and private investment programmes that have the highest
impact to growth, covering roads and energy;
• Creating a business climate that encourages innovation, investment and growth; and
• Sealing leakages in our revenue collection system and extending the tax base, while ensuring efficiency in public expenditure.
24. If we can fully implement all these strategic interventions, Mr Speaker, we will be creating over 20,000 jobs per year. This will have a net effect of transforming the lives of at least 100,000 citizens out of poverty and a drastic fall in vulnerable population. Mr Speaker, this Budget takes care of all the segments of our community ranging from the poor and the vulnerable, the youth and women as well as businesses and investments entities.
25. Mr Speaker, I would not want to create the impression that we are swimming in unlimited resources. Relative to the many things we would want to do, we are facing a hard budget constraint. In the circumstances, difficult choices must be made to ensure that available resources are directed towards the above priority areas. The Government will also adopt innovative ways to better deliver public service, including leveraging on ICT and leasing of assets and equipment; and through public private partnership. In addition, the Government will play a facilitative role by creating conducive business environment to enable private sector to thrive, expand economic opportunities and create jobs.
4.1 Facilitating Private sector to Create Jobs
25. Mr Speaker, it is impossible for the county government alone to create prosperity. We are blessed with a very vibrant private sector that is more than ready to expand its engagements with the county government once we improve the working environment. Investors from within and outside our borders have shown interest to invest in the county. The sectors where there has been increased confidence in the business outlook include construction, telecommunication, mining, energy, and long-term infrastructure projects in roads and water.
26. For us to grow our economy there is need to support these prospective private investments. To attain this goal, the county will work tirelessly to create an enabling business environment for private sector to thrive and prosper. In this regard therefore, the county government has planned to spend:
• Ksh 174.3 Million for continued road expansion, upgrading, maintenance and rehabilitation across the county to improve the conditions of road network, promote commerce and expand economic opportunities for our people, both in urban and rural areas;
• Ksh 647 Million to tarmac Wajir town;
• Kshs 250 Million for construction of County Assembly and completion of county offices
• Ksh 20 Million for boosting investment in reliable and affordable energy through
purchase of solar lamps
• Ksh 100 Million for completion of Wajir sewerage system.
4.2 Achieving Food Security
27. Mr Speaker, 84 per cent our people are still food insecure and live in abject poverty; these are mainly in the rural areas. In addition, food takes 70% of household budget and hence a small increase in food prices impacts negatively on our people majority of who have limited sources of income. The continued minimal use of inappropriate technology has led to low productivity in agriculture, inaccessible farm inputs, weak extension support services, and over reliance on rain-fed agriculture. In order for our county government to counter the perennial challenges of food insecurity and to reduce cost of living associated with the ever rising and fluctuating food prices, the CEC member for Agriculture, Livestock and Veterinary will direct more resources to increased used of modern technologies as well as value addition in aid of transforming agriculture into a business venture. In this respect therefore:
• Ksh 135 Million has been set aside for completion of slaughter house (abattoir) in Wajir town. This will help the livestock through ensuring efficiency and quality of the livestock products;
• Ksh 6.8 Million has been allocated to construction of hay sheds and Ksh 7.5 Million to construction of livestock markets;!
• Ksh 42 Million has been allocated to establishment of six irrigation structures and Ksh 15 Million for on farm demonstrations to be spread throughout the county. This will help farmers in adapting to modern techniques in farming;!
• Ksh 30 Million will be set aside for establishment of a grafting and fruit centre and Ksh 15 Million for vet support services to reach all the livestock farmers effectively;!
• Kshs 10 Million of Forestry and conservation;
• Ksh 10 Million is set aside for help Agri-Business to help farmers purchase farm inputs. The amount is set to increase in substantially in future in order to help the farmers venture in farming as a business. This will produce enough food to reduce the pressure and supplying the markets at affordable prices in addition to job creation
28. The county government will help the farmers secure markets for their products and hence reduce loss to the farmers. In addition, the focus will be on value addition of the products to enhance the competitiveness of our products.
4.3 Harnessing the Talents of Youth and Women for job creation and economic growth
29. Mr Speaker, it is beyond any reasonable doubt that our economy has potential to grow and more so create jobs. This is only possible if we can extensively harness the talents and skills available amongst our women and youth. Through this budget, the government will address the business challenges faced by this group. They include, among others: lack of access to market, expensive and inadequate energy, costly transport, insecurity, and access to credit challenges. On top of this we will embark on upgrading of skills and business knowledge among women and youth. In the same dimension therefore:
• Kshs 32 Million will be set aside to improve Infrastructure for youth polytechnics;
• Ksh 50 Million has be allocated to Promotion of Co-operative & women groups;
• Ksh 30 Million has been allocated to Construction and equipping of Industrial Park which will create jobs for both youth and women;
• Kshs 30 Million has been allocated to Construction of Markets/Stalls;
• Kshs 13 Million has been allocated to purchase of White Wash Crushing Machine.
30. In response to the employers’ reluctance to hire inexperienced job-seekers, initiatives are underway to improve information services to help young people access jobs and training
opportunities. Also, the Government will encourage local NGOs to give internship opportunities to our inexperienced youths graduating from different educational institutions.
4.4 Accessible portable water for all
31. Water problem has been existence in our county since time immemorial and therefore sufficient funds have been allocated to the sector as follows:
• Kshs 72.7 Million for Overhaul and Maintenance of water supplies to ensure all our water sources operate throughout the seasons;
• Kshs 150 Million for construction of Mega Dam for both domestic and agricultural purposes;
• Kshs 75 Million as a grant for Wajir Water and Sewerage Company which will manage water and sewerage affairs in Wajir town;
• Kshs 120 Million for Borehole drilling and development to bring water closer to our people;
• Kshs 128 Million for Purchase of Drilling Rig and Dozzer which will help in reducing the cost of sinking boreholes;
• Kshs 100 Million for Excavation of Water pans.
4.5 Building Human Capital for Long Term Development
32. Mr Speaker, Education and Public Service sectors play an important role towards development of our county. We have therefore set aside sufficient funds to go towards the above social sectors as follows.
• Ksh 84 Million to help in completion of Wajir Medical Training College which once complete will equip our youths with sufficient knowledge in the medical world;
• Ksh. 32 Million for our youth polytechnics to equip the youth with sufficient skills to establish businesses as well as gainful employment;
• Kshs 54 Million for employment of ECD teachers;
• Kshs 24 Million Construction of 30 ECD class rooms;
• Kshs 20 Million for schools infrastructure support;
• Kshs 32.4 for Construction of 6 ECD Models Centres
• In addition, sufficient funds have been set aside for capacity building in different sectors of our economy;!
4.6 Enhancing Access to Quality Health care Services for all.
33. Mr Speaker, in order to build a robust economy you need a healthy population, this call for the need to invest sufficiently on the health sector. We are committed to ensuring the highest attainable standard of health for our citizens. The sector will achieve this objective through; among other interventions: (i) improving our health care infrastructure throughout the county; (ii) ensuring timely and efficient procurement of drugs and medical materials; and (iii) maintaining existing health care personnel, while at the same time recruiting additional personnel in order to make access to quality health care a reality throughout the county. In this regard:
• Ksh 70 Million has been allocated to building staff quarters which will increase efficiency in by the personnel in responding and attending to patients in a timely manner;
• Ksh 40 Million has been set aside for construction of new health facilities. This will help in bringing health services closer to the people;
• Kshs 27 Million for Maternity;
• Kshs 30 Million for Fencing of medical facilities;
• Kshs 70 Million for Completion of the sewage system;
• Ksh 19.4 Million has been set aside for Upgrading and improvement of Health facilities;
• Ksh 42.1 Million has been allocated for procuring Medical Equipment and Non- Pharms in order to equip our health facilities with sufficient drugs;
• Kshs 11 Million for Computerization of services in the health facilities
• Ksh 15 Million has been allocated for establishment of Incinerators;
• Kshs 14 Million for Purchase of Nomadic Clinics/Motorbikes;
• I have allocated Ksh 365 Million for recruitment of 10 doctors, 10 nurses, 4 clinical officers, 4 pharmacists, 2 consultants, 5 Anaesthetists, 11 Laboratory Technologist and Pharmaceutical technologist, among others to provide quality health care services to Kenyans. Our people cannot access world class health care without availability and accessibility of the right personnel!!
4.7 Cushioning the Poor and Vulnerable through Social Protection
34. Extreme Poverty and vulnerability is an enemy we have to eradicate among the members of our society. With over 84 per cent of our citizens living below the poverty line, we have prioritized cushioning those less fortunate, poor, elderly and persons with disability in our communities. We have in this regard allocated:
• Ksh. 80 Million for Hunger Safety Network Programme which will cushion the vulnerable who have previously not been covered through the national government programme to improve their living standards;
• Ksh 5 Million to support the severely disabled.
4.8 Access to Information and public participation in development matters
35. As required by our constitution, every person has a right to information, hence the department information Communication and E-Governance will make sure access to county information is made easier and all the people of this county are involved in development matters. In this respect, we have allocated:
• Ksh 53 Million for completion of Community centres
• Ksh 24 Million for Construction of 6 public baraza sheds to ensure conducive environment during public participation meetings;
• Ksh 23 Million for Installation of Fibre in Wajir town;
• Ksh 12 Million for Cabling of Citizen Service Centre, Radio & Community Centres
4.9 Timely Response to emergency and secure environment for all to live and invest
36. There is need to cushion our people from the disasters through resilience building as well as urgent response to disasters when they strike. This will help in reducing the size of
destruction as well as losses to the affected people. On the other hand security is necessary to attract investors, accelerate economic growth and continuously create more jobs for our youth. We have therefor allocated:
• Ksh 80 Million as Emergency Fund to facilitate urgent response to emergencies;
• Ksh 80 Million for Drought and Hunger Safety net;
• Ksh 25 Million for Conflict resolution and security to respond to conflict and security matters in a timely manner;
37. Mr Speaker, in conclusion, I wish to thank H.E. the Governor for His guidance and support. I also wish to thank all my colleagues, CEC- Members for their support and understanding. My sincere appreciation goes to:
• The Speaker of the County Assembly Hon Bishar Omar for the excellent working relationship during the legislative approval process of the budget;
• Members of the Budget Committee led by Hon Abdullahi Ali for their timely engagements and review process of the budget estimates while under tight timelines;
• The management and staff of the Department of Finance and Economic Planning, for their tireless effort to make our county better. In particular, I must single out the County Chief Officer, Mr. Farah Osman for his hard work throughout the budget process.
38. In summary, Mr Speaker, the message in this budget is as follows:
• We must face our current challenges with boldness and join hands to grow our economy faster to draw more youth to employment and meaningfully reduce poverty. In order to achieve this, we need to support businesses to thrive and take up more opportunities;
• We will continue to invest in infrastructure in order to make all the areas accessible, reduce the cost of investing hence making our county attractive to investors.
We will focus on creating an enabling business environment for the private sector to propel to success and create employment for our youths;
• We will modernize agriculture and livestock including value addition for our products and establish irrigation farms in order to end food insecurity.
• We will seal leakages in our revenue collection system by leveraging on ICT while extending the tax base.
• We will invest in our people through quality education, health care services and availing portable water for all;!
• We will protect the poor and the vulnerable through establishment of county social safety net.
39. Mr Speaker, I submit this budget highlights hoping that we will work as a team to build
Wajir County which both the current and future generations will be proud of.!
I thank you ALL.