Draft #5: Still more work to be done on Kenya’s budget law

Jun 24, 2011

Kenya’s new PFM draft is out

Kenya’s draft PFM law is now, according to the version available on the Constitutional Implementation Commission’s website, in its fifth iteration.  The numerological significance of the draft editions is a bit opaque: there is a previous draft on the Ministry of Finance website, which is titled the “zero draft.”  The public has not, as far as I am aware, been shown any versions in between this and Draft #5.  But, there is no reason to panic: the differences between them are not large.  I highlight a few areas of improvement, as well as some of continuing concern.

Improvements in this version

The new draft eliminates a suspect clause in the old version which placed limits on the public release of documents produced by the Parliamentary Budget Office.  That clause read: the PBO shall ensure that “all outputs are published in a timely way on the internet unless publication is not in the public interest.”  The new version states simply that all outputs will be put on the internet.

The new draft also pushes up by one month the date when the Treasury will release its circular to government agencies.  The old draft required this by September 30th; the new draft requires it by August 30th.  This will give government agencies more time to prepare their budgets.  Unfortunately, the earlier start to the process does not translate into earlier access to information by Parliament or the public.

There are a number of minor changes which are positive on balance: the government was previously required to “publicize” any deviations from the budget within one day of making these known to the Parliament.  This has been changed to give the government a week, but they are now required not only to “publicize” but to “publish” this information, meaning it must be made available in full in the newspaper or online.  I am not sure a week is needed for this, but ensuring full publication is an improvement over the old language.

Areas of continued concern

Most of the lacunae I identified in the first draft of the bill persist in Draft #5.  Many of these have to do with the limited attempt to spell out how the public will have opportunities to engage directly with the budget process.  The public is supposed to be given an “opportunity to make representations” into the Budget Policy Statement (Kenya’s Pre-Budget Statement) before it is tabled in Parliament.  No guidelines are provided for this: how will it happen? How much time will be given to the public for comment?  The public will then have only one week to review the actual document after it is provided to Parliament, and before Parliament must comment (deadline: March 15).

No opportunities are explicitly provided for public input at other stages of the budget process.  The constitution stipulates that the budget committee in Parliament will “seek representations from the public and the representations shall be taken into account” (221:5) when the committee considers the government’s budget estimates.  However, neither the constitution nor Draft #5 mentions anything about the estimates being published, nor about the time that must be given to the public to read and respond, nor the way in which “representations” will be made.  The public is also not provided any formal opportunity to comment on budget implementation or evaluation.

There are also areas where the draft continues to be vague in ways that could prove fateful.  For example, there are no limits on the amount of the Contingencies Fund which can be used at any one time without the approval of Parliament, which provides too much discretion to the executive.  There is no explicit mandate that the Auditor General or the executive publish a report on actions taken to deal with issues raised by the Auditor’s reports.  (Reports do have to be made public of officials committed of wrong-doing and sanctioned, but not how problems identified by the Auditor are being addressed).   Counties are only allowed to accumulate debt up to a “prescribed percentage” of annual revenue, but this can vary by county and it is unclear who will set this percentage to avoid political manipulation.

More to be done

Kenya’s constitution and draft PFM law move the country in a very positive direction, away from an overly dominant Treasury to a system with greater transparency and participation by both Parliament and the public.  But as these comments, and those made previously suggest, there is still more work to be done.  It is to be hoped that citizens will push the bill toward still greater transparency and participation before it is finally approved by the Parliament.


  1. What is the big deal about the Kenya law . It is like any other standard PFM law.
    The budget documents to be published will be the standard documents.
    There is no empowerment of the people in relation to the budgetray process.
    Consultations are even now held by most countries.
    The Finance Minister holds meetings and seminars with trade bodies etc. routinely.
    I think there is a need to develop a few guIdelines or draft a few sections which really empower the public and if they are part of the law only then it may be considered as a public friendly budget process. But we are not sure of how to achieve this ourselves as the budgetary process is a complex bureaucratic/political process. The fundamental principle is that eventually it is the mandate of the ruling party to develop the budget in accordance with its election manifesto. The responsibility lies on the ruling party and the right to question lies with the opposition party. This is routinely happening in the parliaments.
    It would be interesting to see how the big international/national NGOs formulate their budgets and involve the citizens in the process. My experience is that the NGOs are not very transparent when it comes to budgeting and financial disclosure.

  2. Thanks for your comment.

    I think it is important that citizens and civil society groups think about what it is that participation in the budget process really means to them. When you refer to developing a few guidelines or a few sections, I assume this is what you also have in mind. In an ideal world, I think that the budget process would demand that governments identify the resources that they have, the priorities they are trying to meet, and the trade-offs they have to make. Citizens would then be able to comment on all three of these things in open hearings. Government would then make its choices, and it would be obligated to explain these choices and how/why it did or did not take citizen comments into consideration. I do not think this is particularly radical, but it is fairly uncommon. The question is what is the format: public hearings? town hall meetings? written comments and report back?

    Private firms and private organizations do not have to meet the same public standards as governments, because they do not represent citizens or taxpayers. But I agree that most of them could be more transparent about their budgets and policies. Whether people across the world need to participate in the formation of those budgets is less clear to me.

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