The Right Priorities? What Kenya’s National Government Spends Money On

Apr 9, 2015

This note updates two previous analyses that used budget data from the 2012/13 financial year: The Right Priorities? Understanding What the Kenyan Government Spends Money On  and The Right Priorities Revisited: Understanding What the Kenyan Government Actually Spends Money On. The information contained in this series of notes is critical for interrogating the 2015/16 national budget and asking how priorities are changing over time.  Devolution in Kenya: Is the National Government Still Holding Funds that Should be Devolved? (Budget Brief No. 30, April 2015). This brief examines the widespread belief in Kenya that the national government is still holding on to funds and functions that should have been devolved to the county level.  Have State Corporations Changed Under Devolution? (Budget Brief No. 29, March 2015)  Following up on Budget Brief No. 26, this brief continues to look at state corporations in Kenya. It argues that since the annual division of revenue determines how much money goes to counties and how much remains at national level, it should take into account state corporations.

Key Points

  • Many believe that the national government retains functions and funds that should have been devolved to county governments. However, there has been little serious analysis of this issue to determine whether or not it is true, or how much money is involved.
  • Drawing on publically available budget information, we have identified six factors that should be considered when determining which funds and functions can readily be devolved. These factors take into account present funding arrangements at the county, regional, national, and international level.
  • Taking these factors into account, we find that no more than Ksh 65 billion is available for devolution; only part of this could eventually be devolved and we believe the minimum amount that should be devolved is roughly Ksh 28 billion.
  • Almost 75 percent of these funds are controlled by state corporations. This means that the agenda of reforming state financing to align with devolution is largely an agenda of state corporation reform.
  • Parliament should lead a debate on how to reform state agencies to ensure adequate funding for key services and alignment with devolution and the constitution.

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