Mwakanongo presents County's budget statement 2017/2018 to the County Assembly

Posted by Public Communications Team
on 6 April 2017
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NAIROBI CITY COUNTY

BUDGET STATEMENT

FOR THE

FISCAL YEAR 2017/2018

(IST JULY-30TH JUNE)

BY

MR. GREGORY SILVANUS MWAKANONGO

County Executive Committee Member for Finance & Economic Planning

April 6, 2017

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STATEMENT DELIVERED TO THE NAIROBI CITY COUNTY ASSEMBLY ON 6TH

APRIL 2017 BY MR. GREGORY S. MWAKANONGO, COUNTY EXECUTIVE

COMMITTEE MEMBER-FINANCE & ECONOMIC PLANNING, NAIROBI CITY

COUNTY WHEN HIGHLIGHTING THE BUDGET POLICY AND REVENUE RAISING

MEASURES FOR FISCAL YEAR 2017/2018

1ST JULY 2017 TO 30THJUNE, 2018

INTRODUCTION

1. Mr. Chairman, it is my honor to present to this Assembly the policy highlights of the budget for

the fiscal year 2017/2018. The reading of this budget statement has been brought forward due to the

forthcoming elections in August 2017.

2. Mr. Chairman, before I proceed, I wish to take this opportunity to express my appreciation to the

Budget and Appropriations Committee and other Sectorial Committees of the Nairobi City County

Assembly in steering the review of the 2017/2018 Budget Estimates.

3. Mr. Chairman, under the strong and wise leadership of His Excellency The Governor Dr. Evans

Kidero, we have confronted challenges facing Nairobi with determination and confidence in trying to

make Nairobi a City of Choice to invest, work and live in. The people of Nairobi want good schools,

better jobs, live healthy lives, efficient transport, affordable food et cetera. To achieve this requires bold

leadership and everyone working hard to deliver a common vision of our county.

4. Mr. Chairman, over the last four years we have endeavored to make Nairobi the City of choice

for all to invest, work and live in. To this end, we have taken deliberate strategic investments in the

critical sectors so as to achieve this goal. Mr. Chairman, today I am pleased to report that we have

Made significant progress in each of the seven pillars of social economic transformation that His

Excellency Governor Dr Evans Kidero promised to Nairobians. I am pleased to highlight some of the

milestones achieved to this end:

I) We promised to deliver Water and better Sanitation:

In this regard, we have made tremendous strides in development, expansion and modernization of our

water and sewer infrastructure.

We have also invested in developing health infrastructure, acquisition of modern diagnostic equipment

and beefing up staff in our health facilities to match the population requirements. Specifically, the

following outcomes have been recorded in this regard:

• A pragmatic Water Master Plan and policy are now in place;

• Water production has grown from 520,000 cubic metres in 2013 to 570,000m3 in 2017

• 57,267 additional households are now accessing safe water in the informal settlements.

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• 67 Automated water dispensers have been rolled out in Kibra, Mathare and Korogocho serving

300,000 inhabitants at a cost of Ksh 0.50 per 20 litre Jerican up from Ksh 30 for the same

capacity previously.

• 6 boreholes rehabilitated with a new one drilled in Nyayo Highrise. 40 new boreholes are set to

be drilled before June 2017 in collaboration with the Ministry of Water & Irrigation.

• Health workforce enhanced from 3089 in 2013 to 3695 in 2017. We attend to 4,400,000 cases

annually in our facilities with 366,667 cases per month.

• A modern 268 new Maternity Bed capacity at Mbagathi, Pumwani, and Mutuini Hospitals, and

the rehabilitation of 3 operating theatres at Pumwani Maternity Hospital.

• 6 additional facilities offering maternity services(Marurui, Korogocho, Dandora II, Mukuru and

Baba Dogo)

• 17 health facilities have been upgraded to offer 24 hour services and purchased of 5.No

ambulances.

• A modern state of the art 112-capacity mortuary at Mbagathi Hospital.

II) Better Enterprise Development And Employment Opportunities

In this regard, we have improved the business and investment climate leading to accelerated economic

activity in the City. We have eased the business regulatory regime through making the concept of the

single business Licencing a reality. Specifically:

• Operationalized E-Payment system leading to growth of local revenue by 30% and enhanced

the ease of doing business.

• 43 old markets rehabilitated and 8 on-going.

• 2 markets rebuilt after fire tragedies resulting in 500 additional stalls serving an additional 2000

traders.

• 130 multi-storey garden has been established in the County

• 5-Milk dispensers installed in Kasarani, Kamukunji, Westlands, Dagorretti South and

Roysambu sub-counties.

• 17 greenhouses & Water tanks.

• Construction of 100 Fish ponds

• Business environment improvement has lead to a massive investment in Retail and real Estate

including The Two Rivers, Rivera, Garden City and 16 New Hotel Chains

• 4 Major international events and conferences were hosted in the City in the last 2 years.

III) We promised to deliver Better Education for our children

In this regard, we have invested intensively to improve access to education for our ECD learners and

Youth. Emphasis has been laid in developing market driven education and training to boost

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Competitiveness of our graduates. Access to education by learners from needy families has been

enhanced through an annual bursary scheme. Specifically:

• 84,455 needy students have benefited from the County’s bursary scheme since 2013

• 923 youths have been trained in ICT, Entrepreneurship and public health.

• ECD centers constructed with 40 more set to be completed in 2017.

• 10 primary schools have received infrastructure support through partnership with other

partners.

IV. We promised Better attention to your Rights and Needs

In this regard, structural, legal and administrative reforms targeting to improve attention to the rights

and needs of women, children and persons with disability have been undertaken. This has led to better

gender parity in the government’s structure. Specifically:

• 4 rehabilitation centers for street children have been refurbished, housing 682 children

• 524 children rescued from the streets

• 381 children placed in charitable institutions for care and protection;

• 453 children offered non-formal education

• 330 children re-integrated to their families.

• Initiated a Culture change programme amongst our staff

• Decentralization of key services to our 17 sub-counties and 85 wards.

• Enactment of the NCC Persons with Disability Act, 2016.

V. We promised to offer better management of our City’s resources

In this regard, we have made a paradigm shift towards a policy driven fiscal regime in the management

of the City’s resources. Specifically:

• Embraced evidence based planning through adoption of the County’s first CIDP 2013-2017

• Investment in sufficient public utilities, services and facilities

• Established a sustainable framework for financing development.

• Formulated and Operationalize Strategic Plan 2015-2025

• Operationalization of the NIUPLAN 2014-2030.

• Automation of Revenue Collection.

• Efficient water supply and waste management facilities-16,000 water and sewer new

connections

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IV. We promised to deliver better security in our neighborhoods

In this regard, measures to improve security have been undertaken. Specifically:

• 38,000 public and street lighting installed with 6000 high mast floodlights in informal

settlement.

• Enhanced community dialogue to promote cohesion

• Public rehabilitation of street children

• Purchase of 3 water bowsers to enhance firefighting capacity

• Crime incidence has dropped from 1200 per month in 2013 to 200 per month in 2017.

V. We promised to deliver better Transport, Housing and Infrastructure

In this regard, we have invested in the transport and housing setctor in order to improve living

outcomes for residents and improve mobility of people, labour and goods across the city. Specifically:

• 1,300Km have been repaired, maintained

• 6 new roads have been completed including Mathare 4A, Kapiti, Njiwa, Vanga, Nzohe and

South C Shopping Centre Road.

• 6 bridges built

• 200Km of drainage works done since 2013

• Urban Renewal programme is underway targeting six old estates expected to yield 10,583

housing units in the medium term.

• Dandora dumpsite has been upgraded with completion of John Osogo Road, 1.2 Km perimeter

fence and procurement of heavy plant and equipment set to enhance performance at the dump

site.

9. Mr.Chairman, we have achieved this in spite of the fiscal constraints presented by our

operating environment. These include, a huge wage bill, ageing human resource capital, rising

recurrent expenditure, inadequacy of national government transfers, high population, rapidly expanding

informal settlements and inadequate employment opportunities for our youth.

10. Mr. Chairman, the programmes we are undertaking in the fiscal year 2017/2018 aims at

building on the gains we have so far made. In particular the strategies to be employed in the coming

year include completion of ongoing infrastructure projects, improving access to quality and affordable

health care and improving the business environment, promotion of urban agriculture to enhance food

security, clean environment.

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11. Mr. Chairman, the County Fiscal Strategy Paper (CFSP) was approved in February 2017

by the County Assembly .In developing the County Fiscal Strategy Paper we consulted the public

widely . The report on the public views and possible interventions was circulated to all sectors in order

for sectors to include these proposals in the sector plans for the coming year.

12. Mr Chairman ,I want to salute Kenyans for showing a growing interest in the way public

resources are managed by coming out in large numbers during these consultations. In the coming

year we wish to expand our level of public involvement by making this consultative process a

continuous process to be undertaken by the ward administrators.

Highlights of the 2017/2018 Budget Estimates

13. Mr. Chairman, the county relies on transfers from the National Government and revenues

collected from rates, business permits, parking and other fees and charges. The increase in these

fees and charges has a direct impact on the cost of doing business. In the 2017/2018 Fiscal Year I will

not be proposing any review of the current fees and charges but rather will be outlining measures

aimed at improving and enhancing efficiency in revenue collection to finance the budget.

14. Mr Chairman, the population in Nairobi has been on an upward trend and this means

increased demand for services. This means the cost of service delivery is growing at a faster rate

than growth in revenues. This calls for deliberate measures to use resources available in the most

efficient and effective manner to achieve results.

15. Mr. Chairman, faced with prospects of a receding global economic growth, we shall seek to

exercise restraint in expenditure and focus our energy in optimization of resources at our disposal.

GOVERNANCE AND PUBLIC SECTOR REFORMS

16. Mr. Chairman, to strengthen devolution for enhanced service delivery the county government

is committed to taking services closer to the people. In the 2017/2018 the County will continue with the

decentralization programme in order to deepen the gains of devolution of services to the ward level.

This will be done through construction of 10 new ward offices that will house all decentralized

departments. In this regard Kshs 100million has been allocated towards this programme.

INFRASTRUCTURE DEVELOPMENT AND GROWTH

17. Mr. Chairman, the County Government has continued to invest heavily in maintenance and

upgrading our infrastructure. In order to achieve the objective of having world class infrastructure,

the County Government will continue to invest heavily in public roads, traffic management and nonmotorized

transport facilities. The County government will also continue to cooperate with other road

agencies involved in this sector to improve the condition of our roads. These include KURA, KENHA

,KERRA & KRB.

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18. Mr. Chairman, to decongest the City the National Government is undertaking expansion of

major roads. Currently the dualling of Outering Road is near completion, and works on Ngong Road

are on-going. Further we are working in partnership with the National Government to fast track the

Nairobi Mass Rapid Transport System. To ensure completion of ongoing Road projects, I have to

this end allocated Kshs 3.4billion for the Fiscal Year 2017/18.

19. Mr. Chairman, safety of motorists and pedestrians remain a top priority of the Government.

Therefore I have allocated Kshs 322million for development of public transport and non-motorized

facilities.

20. Mr Chairman, the people who live in informal settlement areas are always faced with

risks of river crossings and reduced interconnectivity. To deal with this, I have allocated Kshs. 321.9

million for construction of 31 footbridges and motorable bridges in various wards.

21. Mr. Chairman, the Information And Communication Sector is a key foundational enabler

towards accelerated growth and development. Indeed it has been identified as one of the least

exploited sectors in the County’s economy. In the current fiscal year we have done data cabling in

entire City Hall to enhance Internet Connectivity. Access to the county’s ICT will increase the county’s

productivity and therefore county is committed in investing resources as well as providing a conducive

environment for the ICT sector to thrive. I have therefore allocated Kshs153 million for development of

ICT infrastructure.

IMPROVING BUSINESS ENVIRONMENT AND PRIVATE SECTOR GROWTH

22. Mr. Chairman, tackling insecurity remains a top priority of both the National and County

Government if we are to sustain the growth momentum of the economy. Insecurity continue to

undermine the investment climate leading to loss of jobs and decline in tourism.

23. Mr. Chairman, to underscore the importance the County government attaches to security

we have committed substantial resources in lighting up our streets, informal sectors and estates.

We do believe that a well lit City will be a deterrent to criminals. Additionally as we embrace the 24

hour economy concept in our County the importance of street and public lighting cannot be

overemphasized in relation to security. In this regard in fiscal year 2017/2018, I have allocated

Kshs523 million for maintenance and installation of street and public lighting.

24. Mr. Chairman, to enhance the capacity of our security officers to deal with insecurity ,the

County has committed resources to improving our Inspectorate Staff. Specifically I have allocated

Ksh 250 million to hire additional County Askaris. Additionally we have allocated Kshs 121million for

the purchase of specialized inspectorate vehicles to enhance mobility of our security men.

WARD DEVELOPMENT PROGRAMMES

25. Mr. Chairman, the impetus for devolution was for greater political self determination and

participation. To enhance this ,the County has allocated Kshs 1.7 billion for Ward Development

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Projects in the fiscal year 2017/2018.The purpose of the fund is to address various development

challenges at the grassroots in consultation with the public. The responsibility of identifying these

projects lies with the people at the grass roots.

FOOD SECURITY &ENTERPRISE DEVELOPMENT

26. Mr. Chairman, agriculture sustains the economy and the livelihood of our people. Across the

County many residents and especially the youth have taken to agriculture for production and

generation of incomes through agribusiness. This has not only created jobs for the youth but also

enhanced food security.

27. In this regard Mr. Chairman, we need to continue investing more resources to provide

extension services, training of farmers on value addition and lowering the cost of agricultural

production. In support of this the Agriculture, Livestock, Veterinary and Fisheries sector has been

allocated Kshs 154million for the for installation of greenhouses and water tanks, construction of

poultry unit, establishment of animal shelter, clinic, laboratory and animal burial facility, construction of

fish ponds and installation of milk dispensers. These projects will largely benefit the youth as form of

employment and income generation.

28. Mr. Chairman, provision of trade facilities to our people will go a long way in creating

jobs and ultimately improve the quality of life. In the fiscal year 2016/2017 the County committed

substantial resources in rehabilitating all the markets .To sustain this momentum in 2017/2018 we

have allocated Kshs 450million for construction and rehabilitation of markets.

29. In addition Mr. Chairman, as we continue to improve on the existing markets we need to

increase the capacity by expanding the existing ones and developing new markets in the County.

This will provide trading platforms for our people for exchange of goods and therefore spur growth for

employment opportunities. To this end I have allocated Kshs 350 million for development of new

markets. In the current fiscal year, City Park Market and Karen Market was constructed

ACCESS TO AFFORDABLE HEALTH CARE

30. Mr. Chairman, the County Government continues to invest heavily in improving health care.

The Health sector was allocated 20% of the resources available more than any other sector. This

underscores the importance the County attaches to delivering quality and affordable health care

services. During the public hearings one of the main requests in regard to health was that the

county needs to give priority to non-communicable diseases . In this regard the county government

will continue to address non communicable diseases through provision of skilled personnel in all

health facilities to deal with Non Communicable Diseases (NCDs) and provision of essential drugs to

alleviate the suffering of the patients.

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31. Mr Chairman, to enhance capacity and improve service delivery within our health

facilities, I have provided the following:

▪ Kshs 484 million for the provision of drugs

▪ Kshs 50 million for installation of oxygen plants in Mama Lucy, Mutuini and Mbagathi Hospital

▪ Kshs 804 million for the rehabilitation and equipping of all health centres

▪ Kshs 59 million for refurbishment and equipping the coroner services at City Motuary

▪ Kshs 299.5 million for refurbishment, equipping of the three county referral hospitals –

Mbagathi , Mama Lucy and Mutuini Hospitals

WATER, ENVIRONMENT AND SANITATION

32. Mr. Chairman, the importance of access to safe and reliable water provision to our people

cannot be overemphasized. While the Nairobi City Water & Sewerage Company has continued to

expand provision of water services, this vital resource remains out of reach to many Kenyans and

especially in the informal settlements. To supplement the efforts of the Water Company, I have

allocated Kshs 350million address water and sanitation challenges mostly in the informal areas. This

will mainly focus on increasing the number of water points and sanitation facilities in these areas.

33. Mr. Chairman, a clean environment impacts highly on the health of our people. The increase of

urban population due to rural urban migration has led to increased tonnage of garbage generated in

the City. Every year the per capita cost of cleaning our environment has grown tremendously. The

County has however continued to take up these challenges by investing substantial resources in

cleaning our environment.

34. Mr. Chairman, we are convicted that time has come for the County to adopt appropriate

technologies for waste management. These should include sorting, transportation, and recycling and

possible value addition.

In the fiscal year 2017/2018 the following interventions have been made:

▪ Improving access to the dumpsite through rehabilitation of access roads to the dumpsite

including completion of John Osogo Road

▪ Purchase of specialized garbage collection trucks

▪ Kshs 14.5 million for audiometers for noise pollution control

35. Mr. Chairman, the County Government is exploring ways of reducing energy consumption and

efficient utilization of energy through use of LED street lighting. In FY 2017/2018 County Government

will undertake energy audits in the institutional buildings and prepare County Energy Development

Plans. Implementation of County energy plans will include installation of solar energy and LED lighting

in Institutional Buildings in the medium term.

BETTER EDUCATION, ENHANCED OPPORTUNITIES FOR WOMEN AND YOUTH DEVELOPMENT

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36. Mr. Chairman, Provision of quality ECD education is key to ensuring access to basic

education, enhanced retention and improved transition rates among learners. In this regard, the County

is committed to affording all prospective learners an equal chance for a good education. To deliver the

outlined outcomes in this sector, I have allocated Kshs120 million towards expansion and rehabilitation

of ECD infrastructure across the County and Kshs 20 million for purchase of Didactic

materials/equipment for E.C.D.E Centre. In recognition of the enormous potential of women and youth,

the government will accelerate ongoing reforms to ensure the 30% procurement opportunities for this

population segment are realized.

37. Mr. Chairman, support and development of sports, culture and arts remains a vital priority in

order to nurture the talent of our youth, foster cohesion and promotion of peace among Nairobians.

Additionally, in order to give our youth a competitive edge in the labor market, it remains important for

sustained investment in Vocational and technical training. In the fiscal year 2017/2018, the following

resources have been allocated to this sub-sector:

▪ Kshs 55 million for the rehabilitation of social halls

▪ Kshs 30 million for the rehabilitation of Sports Grounds

▪ Kshs 40 million for the construction of a model Vocational Training Centre at Muslim Primary

School

BETTER HOUSING AND SPATIAL PLANNING

38. Mr. Chairman, Cities in the world are well planned to offer competitive edge over the others

more so, those in developed countries. Kenya was elevated to a low middle-income country when the

economy was re-based and to reflect the new status Nairobi City County being a commercial hub in

East and Central Africa needs to have better physical planning to march other cities in the world. In this

regard we have allocated adequate resources for development of district plans, regularization of

buildings, open public spaces development, survey of county lands and other lands.

39. Mr. Chairman, access to affordable and good housing is one of basic rights enshrined in the

constitution of Kenya. As a County Government we are obliged to offer affordable and good housing to

our residents and tenants in county estates. We have faced high default rates from our tenants due to

poor housing conditions in the estates. The Government is keen on the urban regeneration Programme

of six old estates in the Eastlands through an EPC/JVC arrangement with other private partners. This

programme is expected to revolutionize the housing market and conditions in the City and its environs

upon successful implementation.

• Kshs 100 million for rehabilitation of Buruburu, Kariobangi South, Jamhuri And Huruma Flats

• Kshs50 million for urban renewal projects consultancy.

BUDGETESTIMATES FOR FY 2017/2018

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41. Mr. Chairman allow me now to turn to the fiscal projections for FY 2017/2018.The total

revenue projections is Kshs 35.9 billion made up of Kshs 15.7bilion (43.7% of total) transfers from the

National Government and Kshs 20.2billion (56.3% of total) from internally generated revenues.

42. Mr. Chairman, total overall expenditures is projected at Kshs 35.9 billion. Out of this recurrent

expenditure amounts to Kshs 24.1billion, which is 67.1 % of the total, while development expenditure

amounts to Kshs 11.8billion, which is 32.9% of the total expenditure. This means that the budget will be

fully financed through internally generated revenues and transfers from the National Government.

REVENUE ENHANCEMENT STRATEGIES

43. Mr. Chairman, as I stated earlier in this speech and in full realization of the effect of increase in

fees and charges on the cost of doing business, I will not be reviewing the fees and charges in the

year 2017/2018. The focus will be to enhance efficiency and effectiveness of our revenue collection

mechanisms.

44. Mr. Chairman, in order to finance the budget, the county will roll out several intervention

measures aimed at increasing the revenue base, improving efficiency in revenue collection and

enhancing technology in revenue management. Among the interventions that we intend to pursue in

the coming year includes:

• Complete and ensure the passage of the Valuation and Rating Act at the County Assembly,

which will in turn provide a framework for the review of the valuation roll.

• Restructuring key six revenue streams through creation of directorates to better manage

revenues from;

o Rates

o Parking

o Single Business Permits

o Outdoor Advertisement and Billboards

o Building Approvals

o Health Certificates

• Incorporate the e-citizen database to bring on board more rates accounts thus further widening

the revenue base

• Reviewed downward Rates struck from 34% in 2013 to 25% in 2016 in order to expand the

rates bracket through enhanced compliance.

• Decentralization of applicable revenue streams to sub-county and ward level

• Update and integrate our database with the E-Citizen portal.

• Enhance uptake of E-Payment to include more revenue streams. This will reduce cash handling

with its attendant risks.

• Pursue Loading Zones arrears from Government Institutions and Parastatals.

• Update information systems - Ad Manager to enhance collection of advertising fees on

billboards and signage.

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• Enhance enforcement on all defaulters in all the revenue streams

• Encourage compliance through public education on their responsibility to pay and in return

demand for services.

45. Mr. Chairman, the above measures must be pursued with vigor if we are to realize our budget

objectives. However, this requires the support of all including the Honorable members of this

Assembly. The citizens must also understand that they have a responsibility to pay what is due to the

County in order to offer the much needed services.

46. The government takes cognizance of the burden of debts inherited from the defunct City

Council. In this regard, we have set aside resources and initiated structured negotiations for resolution

of such debts through cash and other near cash arrangements.

CONCLUSION

47. Mr. Chairman, as I conclude allow me to express my gratitude to all those who have played a

part in reviewing the 2017/2018 budget estimates. In particular am grateful to the Budget and

Appropriations Committee, All sectoral committees of the Assembly, and my fellow colleagues from the

County Executive.

48. Finally I thank all fellow Nairobians for their contributions, proposals and suggestions in the

formulation of this budget.

GOD BLESS YOU ALL

THANK YOU

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