49 REPUBLIC OF KENYA ‘THE NATIONAL ASSEMBLY ‘THIRTEENTH PARLIAMENT ~ SECOND SESSION -2028 SELECT COMMITTEE ON BUDGET AND APPROPRIATIONS REPORT ON THE CONSIDERATION OF THE ESTIMATES OF REVENUE AND EXPENDITURE FOR FY 2023-2024 AND THE MEDIUM TERM. ‘The Clerk's Chambers Parliament Buildings [NAIROBI June, 2028 Z.CHAIRPERSON’ FOREWORD. PROCEDURE FOR REVIEW OF THE 2028 BUDGET POLICY STATEMENT. eT KEY RECOMMENDATIONG.... . ACKNOWLEDGMENTS 1.0, PREFACE sows LL. Flaca nd Mandate ofthe Comite cd 12 Membessip of he Commitee 8 14 Patamentay Badger Ofc w 20. REVIEW OF THE FY 2028-2024 BUDGET ESTIMATES nnn Introduction oo ave 22 Key Highlights ofthe 2028/2904 Bas Exits, - ao 23, The MacrmsconomieFramewod underpinning the 2123-2024 bgt. : 2 2A, The Fiscal Fmewk for FY 2028/24 Bulge! Ente - 8 25. Alignment wih Media Term Pres es 3.0. OFFICE OF THE AUDITOR GENERAL. a 44.0, SUBMISSION BY THE PARLIAMENTARY SERVICE COMMISSION. 50. PUBLIC HEARINGS.. 66.0, SUBMISSIONS BY THE DEPARTMENTAL COMMITTEES ou a G1. Depaeanentl Commitee on Baty. = 18 62 Depatanentl Commie on Apes sd Livestock ween 63. Depots Commins on dmiistton and Ltn Sci a8 64 Departmental Commize on Housing Urban Phing and Pubic Work nn 0 5, Depatmental Commie on Hes 1» 46. Depanmecial Commit 08 Lal non oon - 20 67, Departmental Commits Repel Development ——-— 20 68 Depanmenal Commie on Easton —— ae 69, Departmental Commitee on Sports and Cate ee) 610. Depestmestl Cotter on Esvionent, Foren and Ming.611, Deparment Commitee on Tuc and Wie a 612, Deparment Commitee on Trade, nd and agp mn : 2 613. Depanmentl Commitee on Defence, nteligence and For Relations. n 614, Depumentl Committee an Teanport and Ifnetucie. : 415, Depetmentl Commitee on Soil Potten a 616 Depaimental Comite on Labo an 2 (617. Depatmentl Commitee of tice and Lap Afie Cott emma 4618. Depatmenl Commitee on Conminition, nfrmaton a Tannen nan 619. Departmental Commies on Ble Economy dig enone 62 Depatmenal Cites on Finaoe& Nation Pang na 70. RECOMMENDATIONS. 7A, Nom Finnnial Recomtnendai xnoe-nnmatenneennnn 3 722 FianclRecomenai nenCHAIRPERSON’ FOREWORD Article 221 of the Constitution, ection $9 (2) of the Public Finance Management Act an ‘Standing Onder 235(5) mandate the Budget and Appropriations Committee (BAC) to dlscuss an review the estimates of revenue and expenditure, and table a report 40 the House for consideration and adoption. In adherence to section 87(2) of the Public Finance Management (FAM) Act, the National ‘Treasury submitted the 2023/2024 budge estimates to Parliament on 27% Azvl 2028, Equally, the Furliamentary Service Commission (PSC) and the Judiciary independently submited their bucget estimates in line with Article 127(6)(e) and Article 178(8) of the Constitution, respectively Pursuant t9 Article 221(4) of the Constitution, upon receipt of the budget estimates by the [National Assembly, they were committed fo the Budget and Appropriations Committee (BAC) as wel as the Departmental Cornmittees for review in line with their respective mandates. 1 ant pleased to inform this House that each Departmental Committe was able to sequatey ful ‘mandate and submit strong recommendations fo the Budget and Appropriations committee ‘whit have been duly consideved and included in this report. Itis therefore my pleasure, on Behalf ofthe Budget an Appropriations Comite, to present 0 this House the report of the Estimates of Revenue and Expenditure for Financial Year 2028/2024 anc the mediuan term forthe Executive, Fasliament and the Judiciary PROCEDURE FOR REVIEW OF THE 2023 BUDGET POLICY STATEMENT ‘To process the 2025/2024 Estimates, the Comite held twelve (12) sitings including eight (8) meetings with the chairpersons ofthe twenty Departmental Connnittoes and one (1) meeting ith the National Treasury where extensive deliberations were held. in line with is oversight mandate, the Committe also held discussions with the Pasliamentary Service Commission ant the Office ofthe Auditor General to critically review their budget estimates, After reviewing the budget of the vations Ministries, Departments and Agencies within their purview, the Departmental Committees submitted theit recommendations 0 the Budget ancl [Appropriations Committee in a consultative forum that brought forth pertinent issues cutting across al sectors ofthe economy. The outcome ofthese deliberations as informed the various recommendations on a policy as well as financial level which are contaived in this report, Additonaly, the depastmental comnitte observations and recommendations are part of this report asannex LArticle 221(5) ofthe Constitution requires the Budget and Appropriations Commitee to seek the views ofthe public on the budget and take their recommendations into account when finalizing ‘his report. In this vegard, the committee sought the views of the public en Key expenditure Povties ofthe following sixteen (16) counties: Nyandarua,Kirinyaga, Manabi, Geiss, Tana River, Lamu, Siya, Kis, Bomet, West Fokot, Bungoma, Busia, Tharaka Nith Kitu, Kajiado and bu, ‘The committe also received writer memoranda from several organisations including the following: Participatory Beological Use Management (PELUM) Asseciation, Unified Apbet Schools Assocation-Kenya, Mloto News, Reproductive Health PBB Kenya, the Rift Valley Budget Hub and the International Budget Partnership Kenya. A combined report ofthe public hearings iin Annes I ofthis teport [KEY RECOMMENDATIONS Following extensive deliberations, the Committee made critical recommendations spanning ‘arose all setors ofthe economy. Some af overatcing recommendations include the following: ‘Non-financial Recommendations 1. That, taking into account the House resolution on pending bill in the approved report on the supplementary estimates 1 2022/2028, the National Treasury fas-tricks review of the pending bills td in collaboration with the Office ofthe Autor General and the Office ofthe CConteoller of Budget, develops an enforceable framework to halt the accurnulation of pending bills and report tothe House by Seprember 2023 That, by September 2023, the National Treasuty spearheads process of reviewing projects/programmes across all Ministries, Departments and Agencies (ADA) with a view to identifying duplication of functions within the MDAs and submit a report tothe National Assembly, ‘5. That, taking into acount the concerted effort andl commitnent by this Commitee to ensure that the buclgetis proportionately distributed across the county, the National Treasury should submit to the National Assembly by end of September 2023, report showing the distribution of national projects across ll counties over the lst three financial years This will facilitate ‘he commit in its ongoing efforts to enhance equity in distribution of national resources. 4. That, before submission of the 2024 Budget Policy Statement (BPS), the National Treasury reviews the viability of projects based on amount of resources allocated with view 10 ‘liminating projects with lite ono resources and tense that each projet is adequately funded und can be implemented within the stipulated time frame.5, That, the National Tyeasury expedite its review of all Semi-Autonomous Government Agencies (SAGAS) through its newly established high level fiscal risk committee and reports to the National Assembly by June 2024, on State Corporations and Semi-autonomous Government Agencies (SAGAS) with overlapping mandates, duplication and redundancies with a recommendation on those that can be merged and/or privatized inorder to enhance eficiency in use of public resources. 6. That, beginning FY 2028/2024, the National Treasury channels che resources for implementation of basic education school infrastructure through the Constituency Development Fund (CDP) framework in order to ensure accessibility and proper implementation in all schools aeros all counties. 7. That, by December 2023, the state department for industry spearheads « holistic review of the cotton value chain and develops a masterplan to enhance cotton production. This should include a strategy of ensuring proximity to ginueries i allcotion growing areas including the possibilty of reviving old ginneries that already exist in these aveas. ‘8, That, by une 2025, the National Treasuty submits tothe National Assembly in wring, clear plan of action on how the arresrs to the Equalisation fund will be met in totality with clear timelines on when this wil be effected. 9. That, following approval of the 2028/2024 budget, the National Treasury should continuously ensure that all accountng officers ate strictly adhering to implementation of the budget as approved inline with the provisions of the Public Finance Management (PPM) ‘Act, 2012 especially with regard o reallocation of appropriated funds. 10.That, by September 2023, the State Department for Medical Service provides a clear implementation framework for the hiting of the 44,444 Community Health Workers as provided for in the 2023/2024 budget. The process of hiring the Commuty Health Workers should be concluded within the coming financial year. 11.That, by 80° September the Office ofthe Controller of Budget provides the National Assembly with’ framework on how the office will be reporting to the Nationa. Assembly on the ‘quarterly achievement of Ministries, Departtents and Agencies (MDAs) non-financial targets and key performance indicators to facilitate effective oversight by the legislature pursuant to section $98) of Public Finance Management (PEM) Act 2012 12,Tht, by 80% September 2028, the National Treasury provides a debiled report to the DDepsctmental Committee on Finance and National Panning on the surplus funds held in the bank accounts of the State-owned agencies/Parasttal under various State Depattnents 4s at 80th June, 2028, 13.That, in FY 2028/2024, the Pavliamentary Service Commission (PSC) should priviize completion and furnishing of the Multi-storey Office Block for occupation and Keep in abeyance, the purchase and development of CPST land (construction ofthe CPST complex) ‘until the office block is completed|4.That, in FY 2028/2024, the disbursement and utilization of the Ks, 500 milion allocation for Senate Oversight is subject othe development of a proper framework and guidelines for management ofthe resources. Financial Recommendations Based on the deliberations and taking into account the fiscal responsibiity principles, the ‘Commitee recommends that this House resolves as follows: ) Recurrent expenditure ‘That, the net increase in recurvent expenditure of Ks, 86,492,881,755 be effected in the Votes and programmes as shown in the First and Second Schedules as per the justifications provided, 4) Development expenditure ‘That, the net increase in development expenditure of Kh, 24,212, 120,000 be effected in the Votes and programmes as shown in the First and Second Schedules as per the justifications provided, ii) Total Expenditure That, the net increase in the 2023/2024 budget estimates of Ksh,$0,704,451,755 be cifectd inthe voles and programmes as shown in First and Second Schedles as per the jusitications provided, jv) Allocation for Partiament ‘That, the buclet allocation forthe Parliament for FY 2023/2024 be Kish. 41.002 billion. ¥) __ Allocation for the Judiciary and Judicial Service Comission ‘Tha, the budget allocation for the Judiciary and Judicial Service Commission for FY 2028/2024 be Ksh. 23.049 billion. vi) Allocation for the Office of the Auditor General ‘That, the budget alloetion for the Office ofthe Auditor General for FY 2028/2024 be Ksh. 7.989 billion vi) qualisation Fund “That, the budget allocation for the equalisation fund be Ksh.10867 billion whic inches arreats of Ksh, 3 billion. Further, the Committee recommends that this House resolves to: ') Approve the Report and the recommendations of the Budget and Appropriations Comittee om the Budget Estimates for the National Government, the Judiciary and ‘Parliament fr Financial Yeat 2025/2024,ii) Approve that Firs Schedule and the Second Schedule attached to this report form the basis of the Appropriation Bll 2023/2024. ACKNOWLEDGMENTS ‘The Budget and Appropriations Comite is grateful tothe Departmental Commies for their oversight efforts over the Ministries, Departments and Agencies (MDAS) which has enabled the [National Assembly to effectively execute its budgetary oversight role ‘The Committe is also grateful to the members ofthe public who took their me to atend the public heatings and present their views to the Committe for inclusion in this report. In particular, the Committee would like to express its gratitude to the residents of Nyandarua, ‘irinyaga, Marsait, Garissa, Tana River, Lamu, Siaya Kis, Bomet, West Poko, Bangoma, Busia, ‘Tharaka Nithi,Kitui,Kajado and Embu counties for turning up in large numbers an presenting cloquent submissions which have enabled the Committee to realign the budget in a mote responsive manner. Lal, the Committe is grateful to the Office ofthe Speaker ofthe National Assembly, the Office of the Clerk of the National Assembly, the Directorate of Departmental Commitees, the Directorate of Audit, Appropriations and Other Select Committees and the Pasiamentary Budget office for theie invaluable supporto the members of the National Assembly 4s they dschargel their mandate of reviewing the Budget Estimates forthe Financial Year 2¢23/2024 ancl the medium term, ‘On behalf ofthe Budget and Appropriations Committee, and pursuant to Stancing Order 23513), ite my pleasant duty and honour, to table the Report onthe Budge Estimates for FY 2025/2024 an recommend it tothe House for adoption. SIGNED Wess THON, NDINDINYORO, CBS, M1 (CHAIRPERSON, THE BUDGET AND APPROPRIATIONS COMMITTEE 5:06: 2% Dare1.0, PREFACE 4.1. Establishment and Mandate ofthe Commitee [Atile 221 (4 and 5) of the Constitution and Section 7 of the Public Finance Management Act 2012 provide for the establishment of a Committee ofthe National Assembly whose main toe i to lake the lead in budgetary oversight by the National Assembly. Pursuant this cosltuional provision, Standing Onder 207 establishes the Budget and Appropriations Commitee with specific mandates, among which isto: |. Investigate, inquire into and report on all matters eating to eordintion control and monitoring ofthe national budget; fi. Discuss and review the budget estimates and make recommendations to tie House; i, Examine the Budget Pliy Statement presented to the House; iv. Examine bills related to th national budget including appropriation bil '. Bvaluate iax estimates, economic and bndgetary policies and programmes with direct budget outlays ad vi. Bxamine the Division of Revenue Bil 1.2, Membership ofthe Committe Pursuantto Standing Onder 207(2),the Budget and Appropriations Committeas curently ‘constitited comprises of the following Honourable Members: (CHAIRPERSON Hon. Naina, Nyoro, CBS, MP Kihar Constiency UDA PARTY VICE CHAIRPERSON Hon, Otucho, Mary Emaase, MP. “Teso South Constituency UDA PARTY MEMBERS. Hon, Chul, Sammwel Moroto, MP. Hon, Odbiainbo, Mille Grace Akoth, MP KKapenguria Constituency Saba North Constituency UDA PARTY ‘ODM PARTY Hon, (Dr) Mulu, Makai, MP, Ho, Lekston, Joseph, ME. Kit Cental Constituency laisamis ConstituencyWOM Kenya on, Lesa, Josephine Naisuls, OGW, ME. Simburu West Constituency KANU PARTY Hon. Ochieng, David Ouma, ML. Ugenya Constituency MDG PARTY Hon, Shnali, Bernard Masaka, MP. Tkolemani Constituency ODM PARTY Hon, Aandi, Samuel Onunga, ME. ‘lego Usongn Consitiency ‘ODM PARTY on. Mefjadonk, Benjamin Gathinu, ME. Emakast Cent! Constisieney UDA PARTY Hon. Wachira, Raab Mukai, MP yeti County UDAPARTY Hon, Ongili, Babu Owing Paul, ME, nba Eat Constituency ODM ARTY. Hon. Guyo, Ali Wario, MP sen Cofstisieney OOM PARTY Hon. Busia, Ruth Adhiambo Odinga, ME. isu County ODM PARTY’ Sergon, lowrenceJematiah, ME. aringo County UDAPARTY von rary Hon Robi, Mathis Nyamabe, HA Kurla West Constituency UDA PARTY Hon. Muchira, Michael Mwang, MP. ‘Olforok Constituency UDA TARTY on. Mvakuysong, Danson Mwashako, ME. ‘Wurndanyi Constituency WDM" Kenya Hon, Mwiigh John aul, M& Igembe South Constituency UDA ARTY Hon. Wangaya, Christopher Aseka, ML. Khuvisero Consituency’ ODMPARTY Hon, Masara,Feter Francis, MP Suna West Constituency ‘ODM PARIY Hon. Wangiku John Njuguna, MP. Kiambua Constituency UDA PARTY Hon. (Or) Murumbs, John Chiat, MP. Tongaren Constituency TORD-Kenya Hon. Kita, Oe Ntut, NLP Natok South Independent Hon. Mokaya, Nyskundi Japhet, MP, tutu Chace North Cosine UDA PARTY4 Hon, Abiahman Mohamed Abdi, MP. Lafey Consitency Jubilee Paty 1.3, Commitee Secretariat “The Committe Secretariat is comprise of the following: ‘Me Danson Kachumbo Fiscal Analyst/ Clerk of te Budget and Appropriations Commitee Me, Jbl Mohammad Fiscal Analyst / Assistant Clerk of the Budget and Appropriations Commitee (Me Nimrod Ochieng Mi Stanley Langat ‘audio Office ‘Serjeant-at-arms (Ms, Mevcy Mayende (Me, Jared Amara ‘Media Relations Ofte Assistant 14, Parliamentary Budget Office “The Commitee received technical support from the following oficers of the Farliamentary Budget Ofice: Dr: Martin Masinde Director, Pariamentary Budget Office ‘Mi Robert Nyagah Deputy Director, Parliamentary Budget Office Ms. Milicent Makina Dr, Abel Nyagweachiical Analyst Fiscal Analyst (Ms, Julie Moithiga Ms Loice Oesis Fiscal Analyst Fiscal Analyt I Me Ringine Mutoeish Mr: Kioko Kiminaa Fiscal Anlst It isa Analyt (Ms, Priscilla Wat Fiscal Analyt 2.0. REVIEW OF THE FY 2028-2024 BUDGET ESTIMATES 24. Introduction i. The TY 2028/24 budget isthe ist underthe current government administrationand isexpected ‘ose the pice of economic transformation forthe next five financial years. This budget has beet prepared agninst a background of significant global economic uncertainty with the ongoing Russi-Ukraine conflict, agitated financial markets, and tightening manelay policy globally and more specially the USA, which has led to significant slowdown in econowne growth, Domesticaly, the economy is experiencing substantial macroeconomic challenges including subdued consunnption du to high inflation, depreciating Kenya shilling, and unerperformance ‘of domestic debt market, The estimates of revenue and expenditure for FY 2028/24 are premised on “he Bottom Up eonomic Transformation Agenda (BETA) that is geared towards an econome turnaround, ‘aking ito account the prevailing macroeconomic challenges. The focus is en sx strategic lyjctves including lowering the costo living, ereating employment opportunites, eradicating lunges, improving sal space, increased foreign exchange earnings, and inclusive growth The Bottom Up Eoonomic Transformation Agenda is anchored on the folowing five pillars Agricultural Transformation, Micro. Small and. Mediuin Enterprises (MSMES) Economy, Universal Health Coverage, Affordable Housing. and Digital Superhighway and Creative "sonny. The deivery of the envisaged interventions is based on vai chain approach whereby rine value chains have been prioritized. These include the leather products velue chai, the‘garments and apparels value chain, the dairy value chain, edible oils value cha, tea value ‘hain, rice vale chain, blue economy, minerals and building materials. 2.2. Key Highlights of the 2028/2024 Budget Estimates 10.The total budget forthe FY 2023-2024, is Ksh, 4449.4 billion This comprises of Ksh. 1,508.7 billion in recurrent expenditure, Ksh. 718.9 billion in development expenditure, Kh, 1886 billion in Consolidated Rand Services (CF) and Kh. $85.4 billion in county equitable share. ‘Notably, the CFS expencltire amount includes Ksh. 775.14 billion in interest payrentson debt ‘and Ks 850.1 billion in principal debt redemptions 1. Across the National Government the total budget is broken down as follows: Executive Ksh, 2,164.31 billion OF which: Equalization Fund Ksh. 7.867 billion Contingency Fund sh. 28bilion Auditor General Kh, 7.99bilion Paciament Ksh, 40.40 billion Judiciary Ksh, 22.99 billion 12. Based on a detailed sertiny ofthe submited estimates, the Committee observed tat although there ae no fundamental changes in sectoral ceilings as approved inthe Budge Poly Statement (GPS) 2023, expenditure within the sectors has been prioritized and reoriented to keyenvisiged interventions. This has been achieved through reduction in non-priovty =xpendiure, "ationalzation of expenditure to high priority areas and focus on completion of projects that are at finalization stages. To this extent, the toal executive budget is lower by Ksh. 58.68 billion than the approved ceiling, 18.tn terme of sectoral allocations the edation sector continues to account for the argest share ofthe National Governments budget, with the share in total allocations growing, from 28.7% in FY 2022/28 to 27.1% in FY 2028/24. This increase is cccasioned by the need for addtional resource atthe Junior Secondary Schoo! level as wellas the recruitment of new teachers through the Teachers Service Commision (ISC). The Energy, Infrastructure, and ICT Sects allocted the second largest share ofthe national budget, accounting for 19% of total expenditure. Despite the resource allocation following previous patterns, the comumitee observes that there is noable increase in funding othe General Economie ad Commercial Affairs sector in line wit the BETA priorities under the MSMEs pla. There i alo a slight inerease in allocation tothe Agriculture, ruta and urban development sector in line with the priorities of government. 2.8. The Macroeconomic Framework underpinning the 2028-2024 budget 14.The FY 2023/24 Budge is anchored onan economic growth projection of 5.6 percent in 2028, which is « downward revision from the 6.1 pereent projection in the approved 2028 BudgetVoliey Statement. This growth will be supported by strong performance in the service sectr, ‘ongoing public sector investments; recovery in the agriculture sector; increased private ‘consumption; increased investor confidence and growth in exports de 49 investments in Agriculture and MSMES inline with BETA. The Committe notes that low access to pats and increased infestation of fll armyworms may adversely affect agricultural proton, Further, ‘he busines environment has deteriorated significantly inthe recent past primarily de high inflation which curtalled consumer spending. The economic growth outlook remains uncertain ‘ue tosignifcant intemal and external shocks a this may have abearing.on revenue cllecton and financing of the budget. 5. With regan to ination, the Committee noted that overall inflation is declining and was estimate! at 7.9 percent in April 2028. This is on account of lower food and ‘uel inflation in recent months. Indoed, improved rainfall performance and lower internationa fuel prices are likely to keep headline inflation moderately low in the coming months and below the upper ‘urget of 7.5 percent in 2028. The committee observes however that there are underving cae push fctors which could keep core inflaton elevated, Ths inches increased xt of prociction ‘Jue to higher power tarts as well as high import prices due to spillover effects of weak shilling. ‘over the past one yea, the Central Bank of Kenya has tightened the monetary policy stance ina bia to curb high infation. Tis has had the effet of increasing the cost of domastie borrowing suet higher lending rates i Hine with increase inthe CBR rate. Thus, whereas Here has been 1 gradual shift in eredit growth from government to the private sector, the eammitee i stil ‘concerned! thatthe high cst of credit may cura availability of credit to the private sctr. 7-The Committee took cognizance ofthe depreciating Kenya Shilling agains the US Dollar from sn exchange rate of 1154 in April 2022 to 185 by April 2023. This has been oozasioned by the tightening ofthe Federal Reserve's monetary poicy stance to tacke inflation. Asa result, mast counties have experienced capital fight an in the case of Kenya, this as beer worsened by a deterioration of the foreign exchange resecves and lower exports compared to imports of sccount of high cast of fuel impoets. The committee observes tht further worsening ofthe ‘xchange rate could increase the cost of production due to exchange rate impct on imported aw mterals including fuel. Further, thas significantly worsened the county's debt position asthe debt stock is predominantly denominated in dollars 2.4, The Fscal Framework for FY 2023/24 Budget Estimates The Committee noted that the estimates submitted are in line with the fiscal consolidation ‘commitment of the government. The total expenditure snd net lending fr FY 2023/24 is Ksh. {839929 billion which is «6.4% inrease relative tothe historical average anrual increase of approximately 12%, Inded, the budget estimates depict « eduction in total expenditure as & share of GDP fom 23.8 percent in FY 2022/2 to 22.1 percent in FY 2023/24; ith government Financed projects as share of GDP declining from 2.7 peroent in FY 2022/25 to 2.4 percent itFY 2023/24 while the recurrent budget has declined from 16.2 percent to 18.2 pesent during the same period 19.Development expensiture eset to increase by 16.3% (KSh. 100.8 billion) to Ksh. 718.9 blion {nthe 2028/24 FY from the 2022/28 revised buiel. I was observed hovwever thathis increase is mainly due to reinstatement of donor funds (Ksh 84.69 billion projet loans and Kat 10.7 billion project grants) which were the target of budget cus in the 2022/28 supplementary No. 1 budget. ts further observed thatthe development expenditure allocation for FY 2028/2 is lower than the BES ceiling primarily due toa reduction of Ksh. 67.14 billion in project loans and Ksh, 5.9 billion in project grants, The committe is concerned that continued redtion inthe budget of development partner funded project will result in delayed implementation of project andthe accrual of commitment fees. 20, With regard to revenue, the National Treasury has maintained its BPS proposal of enn, ‘ordinary revenue collection a a share of GDP from 15.1% in 2022/28 to 15.8% in 2028/24. ‘The ordinary reverie projection for FY 2028/24 is Ks, 2,871.2 billion, which represents a 17 percent increase relative to the expected 2022/23 FY collection. The committe notes with ‘Concern tha thi revere target ie quite ambitious taking into account that hstorielly, ordinary revere has grown at an average of around 10 percent. Further, the downward revision of GOP _rovh projection is indiative of a concomitant reduction in revenue collection, 2 “The fiscal deficit including grants as a share of GDP is expected to decline érom 9:7 percent (Ksh,824.0 billion) in 2022/28 to 4.1 percent (Ksh 663.5 billion) in 2023/24. The committee roles however, tha this projected reduction inthe deficits partially atibuted to an ambitious projection in tx revert clletion. Should the revenue collection target not materialize, twill hecessitate a downvvatd revision in expenditure through a supplementary budget. 22.The satutory Consolidated Rand Services (CFS) expenditure is set to increase by 15.6% (Ks. 1183 billion). The main diver ofthe increase in CYS expenditures are Ksh, 90.88 billion in inerest payment on domestic debt, Ksh. 16.5 billion in expenditure on pension and Ksh. 54 billion in interest payment on foreign debt. Consequently, during the 2028/24 FY, the total expenditure on interest payment on domestic debt and foreign debt are expected 0 amount to Ksh. 628.3 billion and Ksh. 1469 billion respectively. The commitie notes that CFS expenditures account for 41.8 percent ofthe total budget and will continue t exert fiscal pressure during budget implementation, Further, the deprecation of the Kenys Siling is ‘worsening the debt situation de to higher expenditures on debt servicing. .28.Ministeial Appropriation in Aid (ALA) collection is projected to decline by 4.8 peroent from projected Keh. 336. billion in the supplementary Estimates No.t of FY 2022/28 to Ksh. 822.5 billion in the FY 2028/24, The committee cberves that the projected amount is lower than what ‘was projected inthe 2023 Budget Policy Statement. [ts noted however, that actual receipts fom [AIA have signifeantly improved over the last ive financial years. Nevertheless, there has been ‘over ambitious revenie targets of A-in-A by some ministries that lead to uncoordinated budget «ts ring implemeniation ae2.5. Alignment with Medium-Term Priorities 24.The 2028/2024 budget is anchored on five pillars under the Rottom sp Esonomic “Transformation Agenda (BETA). These include Agricultural transformation, MSMES economy, Universal health coverage, Affordable housing and Digital and Creative econony. The delivery of the interventions proritied under the Bottom Up Bsonomic Transfrration Agenda envisioned a value chain approach to ensue that government interventions are coordinated and pullin the same direction. Resources have therefore been allocated to suppor: the identified pritity value chains under the five pillars ihe comtmitee notes that while resources have been allocated towards key interventions under agricultural value catins, ost of these programas are donor funded and isk urder absorption siven the historical challenges, Further, reliance on donors for such a eritical programme Fenders the ecto vulnerable to donor dependency an decreases the countrysabiity to respond asequately and decisively tits own needs 26. With regard to Health, the committe is pleased to note that che government his apportioned resourees equivalent f0 over 600% of allocation in the previous financial year towards tnthancing access to critical medications including TB, Malaria and HIV. Actionaly, the tstimates have apportioned resourves towards Universal Health Coverage incling for set up of an Emergency Medical Treatment Tund #0 cater for emergency, cancer treatment and referrals. lis noted however, thet the operationalization éramework forthe fund including the ‘regulations to support management ofthe sume are not int pace. "he Micro Stall and Meciuan Enterprises pllais aimed at creating an enabling environment foe entrepreneurship, indusrializaton and investment promotion. The Committe noted that 9 support interventions under this pillar, various programmes have been conceptualized and resources apportioned, For Instance, the Centre for Entrepreneurship Project unde the wnbrell ofthe Kenyan-German TVET Initiative i designed to provide a fist point of cortact for young people who want to set upa business or need support for thee start upenterprises, The objective oF the projet is supporting growth of emerging formal and informal enterprses in selected industrial and service setors fr employment eeation, 28. the Affordable Housing pilla ofthe Bolom Up Beonomic"Transformation Agend secs to close the housing gap by fclitting delivery of 250,000 houses per yeat The Comite noted that to realize this, the estimates have an allocation of Ksh. 3.2 billion towards construction of aifordable houses, Ksh, 82 billion towards construction of social houses, Ksh. 2.1 billion for ‘perationaliztion of the Kenya Mortgage Refinancing Company among other critical Allocations The Digtl Superhighway and Creative Beonomy pillar seks to mainstream the sector into the [ational economy through digitization of government services, rehabilitation atl extension of the re optic network and monetization of talent and creative ars, The Commie appreciatedthat most ofthe envisaged interventions have been funded under the FY 2028-24 Estates, “These include fast tracking the completion ofthe Konza fechnopois,opeationaliaton of the Open University, constuction and operationalzaton of the Kenya Advanced Insite ofSlence ‘and Technology that is expected to enhance capacity in software development and linking innovators to the market. The estimates have also apportioned resources towards maintenance and rehabilitation of the National fibre optic backbone, This is expected to upscale digital ‘conomic activities while easing the cos of doing business while creating eficieney and opening ‘opportunities for jab creation. 5.0, OFFICE OFTHE AUDITOR GENERAL. 80. The Office othe Autor General has revised budget allocation of Kshs 6875 blo in the FY 2022/28 agains lndgetary requirements of Kshs..687 billion. The expenditure up to 0 Ape, 2028 was Kshs. 5,145 Bilion representing an absorption rate of 79% of the total budget. The ‘office has been able to finalize the following audits: 216 Donor funded projects, completed 21 Special audits while 14 others are ongoing, completed 10 performance audits, 9 others are ‘ongoing, completed I Citizen Accountability Audi, 9 other audits are ongoing. “The Auditor General indicated othe Committe thst with the increased number of audit ints, there is an urgent need to increase staff and procure working tools lke laptops and other ‘equipment. In addition, the office requires new motor vehicles to replace the agit eet an to tures the audit inelines and delays in the execution of special audit request rom pariament ‘and other stakeholders as tears have to queue forthe few vehicles we have. 82.The Auditor General further reported that their main projects are the orgoing OAG Headguartets under construction in Nairobi at an estimated cost of Kshs 6.2 billion. Te OAG acquired land for this purpose in the FY2013/14 which has remained ile fr 8 years making it fan audit query in set due to lack of money. Further, the office is undertaking construction of the OAG Coast Regional Ofice in Mombass at an estimated cost of Kshs:900 Milo 39. The Commitie considered the possibilty of intreducing an suit levy forall entiies that are “Supposed to be anited fo enhaice operational and financial autonomy of the auctor genera "The OAG indicated that this made i operational in South Africa and may enhance resources availablity. However, it will require a relok of the legal architecture to anchor the same. s 4.0. SUBMISSION BY THE PARLIAMENTARY SERVICE COMMISSION ‘s4-the Parliamentary Service has four votes as follows: vote 2041 Parliamentary Setvice ‘Commission, Vote 2042 for the National Assembly, Vote 2043 forthe Parliamentary oint Service fad the newly ereted Vote 2044 for Senate Aft. Key deliverables forthe Comision in the #Y 2028-24 include enabling Parliament oenact various picesof legislation, conser motions, Satements, ard peiion, oversight the utilization of public resourees and promote geod ‘governance, 88.The Parliamentary Service Commission indicated that Parliament is critical esabler of the Rottom Up beonomnic Transformation Agenda (BETA) andi wll support the government by wayof legislation, oversight and representation foes, arliament will specifically facilitate the achievement ofthese agendas by oversighting the implementation of vatious interventions to fensure value for money and passing the necessary pccee of legislation 10 enable. the implementation ofthe agenda The total budget allocation to the Parliamentary Service Comission in the FY 2023/24 is Ksh. 40.402 Billion, This is allocated across the votes as follows: the Parliamentary Service Comission - Ks 1.8618; the Senate Vote ~ Ks 6.659 Billion; the National Assembly Vote -Ksh 4.152 Billion and the Paciamentary Join Services Vote ~ Ksh 8,180 Billions f which of Ksh 6.065 Billion is recurrent expenditure wile Ksh 2.065 Billion is development expenditure 17.The Commission submitted that Parliament has struggled to fund its programmes in the FY 2022/2028 due to underfunding thus necessitating reallocation and addtional funding ‘hough Supplementary Estimates. The situation is further aggravated by erratic exchequer releases which, if pot mitigated, may adversely affect budget implementation for TY 2023/2024, 5.0. PUBLIC HEARINGS Article 21(5) ofthe constitution requires the Budget and Appropriations Comm tte to sek the ‘views the public on the budget and take their recommendations into account when finalizing this report In dis regard, the committe sought the views of the public on key expenditure Portes fo be submited through writen memoranda or orally in selected venies across the following sixteen counties: Nyandarua, Kivinyaga, Marsabit, Garssa, Tana River, Lam, Siaya, ‘Kis, Bomet, West Pokot, Bungoma, Busia, Tharaka Nidhi, Kit, Kajiado and Emi. nation to well attended public meetings, the comittee received written submissions from ‘he following organisations: Participatory Ecological Use Management (PELUIM) Associaton, Unified Apbet Schools Asscistion-Kenya, Mtoto News, Reproductive Health PBB Keny, the Rit Valley Budget Hub and the International Budget Partnership Kenya, 40-The representations rom the public span across various sectors including water energy, roads, ‘shucation, security agriculture and heslth; the details of which are contained in annex Hof this "wport. The comimitce hus considered these submissions and has made recommendations which uve contained inthe tht Schedule attached to this report. (60, SUBMISSIONS BY THE DEPARTMENTAL COMMITTEES The Departmental Committees presented cntical observations snd recommendations which ere ‘onfaned in Annex To this report. Some of the pertinent observations made by the Departmental Committees include the following:6.1. Departmental Commitee on Energy 42:The Committee appreciated the efforts by the Kenya Pipeline Company (KPC) that has commenced the construction ofa $0,000 MT common user LPG storage and handing felt at the Kenya Petroleum Refineries Ltd (PRI. This is anticipated to ease Liquefied Peroleum Gas {LEC importation into the nation, boost competition among oil marketers, and ultimately lower the cos of LPG. 43-The Committe noted thatthe overall reduction inthe allocation forthe State Department for ‘Energy by Kahs.156 billion fom the BPS 2028 ceilings was mainly due to budget cas in capital projects for SAGAs under the state Department and were majorly from the foreign sources of funding. This may affect the completion rates of critical projects in the energy sect henoe the need to source for alternative sources of funding such as public-private partnestps forthe affected projects. 44. The Committe noted with concern that a8 at $1st March 2028, the pending bills among the 'SAGAS under the Slate Dept. for Energy were as follows: KETRACO (Kshs.19.57 billion for wayleave claims and compensations; GDC (Kshs.998.66 milion) for Bogor Silale and ‘Menengai project; KPLC (Kshs.88.9 bilion) owed to Energy Suppliers who include KenGen, KETRACO ane IPPs and statutory payments such as royalty and dividends; REREC (Kshs3.2 bilion owed to General and other suppliers, On the other hand, the National Govemment owed PLC Kehs.27 8 bilion of which Kshs. 22.2 bill is forthe rural electrification schemes projects maintenance due tothe use of the current Mereado mol in cost capture, and Kshs. billion for tariff compensation subsidy. 62. Departmental Commitee on Agriculture and Livestock. 45:The Commitee was concerned thatthe Ministry of Agriculture and Livestock has ben alloted ‘total of Keh. 64.6 billion in FY 2023/24 against a resource requirement of Ksh. “04.6 billion ‘which leaves the Ministry witha funding gap of Ks, 40 billion. Thisis the Ministry that supports {out ofthe 9 Bottom-up Ezonomic Transformation Agenda value chains and therefore there should have been requisite enhancement of resources under the sector, -46-The Commitee expressed concerns tha the Sugar Reforms Project has sen te insllaton of 11 ‘Cane Testing Units in sugar factories. It is noted however that there i minimal use beeause of the reluctance by the millets to adopt sucrose content payment system anal ack ofsensitzation to farmers on the benefit of adopting sierose content payment system that has immensely benefitted farmers in countries where i has been put into use. The Committee kas provided resources for farmer sensitization, 63. Departmental Commitee on Administration and Internal Security 47-The Commitee observed that the Slate Department for Immigration and Citizen Services could not cope with the number of Kenyans seeking for passports to travel abroad for otfer economic ‘Opportunities on account of inadequate capicity ofthe current printer which pris only 900,fussports compared to a dlly demand of 5,000 applicants. There is nee to provide fr Ks £200 million forthe purchase f 2 modem printer to cope with this high demand 418.The mumnber of police officers is rapidly dectining on account of natal ation but there was tno allocation for recruitment to replace such officers, The Committe took note ofthe ned fo recruit 5,000 afficers to replace the once that have left the service and further boost thee ‘dwindling numbers. Resources amounting to KSh. 3.2 billion for recruitment ofan additional, 5,000 officers had not been provided. 64, Departmental Committee on Housing, Urban Planning and Public Works 42-the Committee observed that there are stalled markets that were started under the Poonam ‘Stimulus Programme and are at various sages of competion, The completion ofthese markets would support the government agenda on Micro, Srl and Medium Enterprises (MSMES) cress the count. 50.Tve Commitee further observed thatthe availabilty and standards of construction materials sd fitings varies across the country. Therefore, research and development iitatives should help to ensure standardization of affordable construction materials based on availability in various regions across the country. 65. Departmental Commitee on Heath Si. The Committee was concernel that Kenyan mesial training institutions have notbetfited from the export of human capital because the Ministry of Health has not flly exploited the benefits ‘isk arise with the high demand of Kenyan nurses. Further, Kenyan mutses in the United Kingdom have been complaining about being placed in lower job groups compared 10 their counterparts in the United Kingdom. 52. The Commitee observed that there was no budgetary allocation for the operationalization of ‘venty-one (21) KMITC campuses that have been constructed and partially equipped. These campuses quite approximately Kshs. 985 millon to operationalize ther in terms of fms resource requirements. 52 the Commitee appreciated efforts towards opertionalization ofthe Digital Health platform and the emergency medical treatment fund. However, the Committee noted that there were no regulations and frameworks governing the same.66, Departinental Committee on Lands 54.The Committee noted that the nationwide digitization of land registries remains ertel for streamlining. land record storage and retrieval and ensuring smooth an timely land transactions The Sate Departments new program called "Land Information Management” is expected to ensure full projet ownership by hiring addtional sta to take om the technical specs of the project previously undertaken bythe Joint National and Resource Mapping te. ‘This should reduce the operational challenges that arose as a result ofthe Arisa platform's rollout, 55. The Commitee observed that die to fs and charges related tothe registration ofits issued to element project beneficiaries and adoption of cashless payment system in sone registis, the State Department for Lands and Physical Planning has increased the Appropriation in Aid AA) collection by over Ksh. 500 million. 6.7. Departmental Committee on Regional Development 156. The Commitee noted that there ate projects under the RDAS that are BETA pricses but have inadequate funding to kick sat their operations For instance, the Gum Arabic Resin in Wajir by Bwaso Ngito North Development Authority which is 100% compete and the Obitotok Agro processing project by Ewaso Ngi'ro South Development Authority 57.The Committee appreciated the fact that with the very litle resoutee allocation che Regional Development Authorities have implemented major Ivlihood projects and various mega projects ‘cross the county that have ranaformed the lives of many Kenyans and therefore, tere is need toallcate more funds to the RDAS to support their programs 68, Departmental Commitee on Education 8. The Commitee noted with concern that most TVET institutions have concentrated in offering ‘business and management related courses instead of focusing on technical and practical related courses as expected of TVET institations and ae in ine with the government goal of promoting indusrialization and self-employment 159. The Commitee is appraised ofthe new University Funding Model where students wil be funded Insel on their needs through means testing and the courses being underiaken. The Commitee rote that there isa lot of misconception and public concern among the public regarding the few funding approach and this eal for the Department to create awareness and sensitization through outteach programmes to ensure the model is understood and appreciated6.9, Departmental Committee on Sports and Culture 60-the Commitee raise concerns that there are many institutions sic as the National Museums of Kenya, Roms of Kenya and National Archives that are over relying on exciequet, yet they have suftcient potential to raise own source revenue sists. Gl. The Commitee noted thatthe apportionment of funds by Sports, Arte and Social Development ‘und (SASDI in FY 2028/24 doesnot meet the requirement of regulation 4 ofthe PPM Sports, Asan Socal Development Fund) Regulations, 2018 where amounts not exceeding sixty (605) percent goes fo scial development, including univers health cae, thirty-five 9%) percent promotion and development of sports twenty (20%) percent to promotion and development of svtsyan five (58) percent to government stetegic interventions, 6.10. Departmental Commitee on Environment, Forestry and Mining [62:The Committe ote thatthe State Department for Environment andl Climate Shange regu ‘more innovative fundraising models to fulfils core mandates including wade mansgement and disposi; modernization of meteorological services; participation in incrnational meetings where varios conventions are ratified for domestication under the muli-lateral environment agreements and undertaking environmental education; awareness and sensitization of stakeholders in environmental management. ‘The Commitee further noted that considering the expectations placed upon the Slate Department for Forestry bythe Sate on growing, 15 billion tees by 2030 forthe restoration of 10.6 milion hectares of degraded landscapes, mult-stakeholder approaches are requited to ‘mobilize adalitional financing from other multilateral, bilateral ancl private sectors player, including climate and carbon trading financing. 6.11, Departmental Commitee on Tourism and Wildlife (4.The Commitee noted that as at April 2028, the pending bill for Human Willie Compensation ‘laims amounted to KSh, 2.72 billion. The total claims wete 6,663 eases of whch 812 claims had been partially pid while 6,351 claims had not yet been pad. the plot phase ofthe tuman Wilde Contict Insurance programme was planned to be implemented in six (6) hotspot ‘counties of TaitaTaveta, Nok, Kado, Garitsa, Meru ancl Makueni counties. (65. the Committee observed that KICC hus an outstanding debtors amount of Ksh. 788.56 million ‘rom various government Ministries Sate Departments, Agencies and Parliament. This huge slebt had greatly impacted on periormance of the corporation. Furthermore, Parliamentary Service Commission owes KIC Ksh. 187.57 millon of which Ksh. 147.25 milion is rent du, sh, 7.58 milion is parking charges and Ksh 2.94 million is conferences charges,6.12, Departmental Committee on Trade, Industry and Cooperatives {66-The Committe noted that the offices of Trade missions ate not achieving value fee the money spent on sustaining them abroad, in addition, « huge share of the budgetary allocation is spent On allowances forthe tude atachés, The offices are consuming resources withou! generating measurable returns sich as geting new markets for Kenyan exports. 67-The Commitee noted that the Sate Department fr‘Tade is pursuing trade agreements with the (US through the Sttlegic Trade and investment Partnership which the Slate Department ‘commited that t wil be effective from December 2023, The Sate Department i also pursuing trade negotitions with United Arab Emirates, European Union and Indonesia. The Commitee tlberved there were no Key Performance Indicators and targets for these negotitins. 6.13, Departmental Committee on Defence, Intelligence and Foreign Relations 68.The Commitiee noted thatthe Kenya Shipyard Limited (KSL) aims at becoming the leading shipbuilding institution in the region, However, i ces some challenges given tat i des not have operational autonomy, Hence the need t develop mechanisms to make ita filly independent parasttal operating under the Ministry. (69:The Committe raised concerns over the huge number of MOUS that are pending ratification and operitionalization in various missions due to bureaucracy in the Ministry and lack of adequate capacity to process them. (6.14. Departmental Committe on Transport and Infrastructure 70.The Commitee noted thatthe Roads subsector is a key enabler to realization of the government Geliverabls with regards tothe Bottom Up Eoonomic Agenda. The Sate Department for Rss has aligned its proposed allocations to Construction, Rehabilitation and Maintenance of rural roads towards achieving the BETA objectives by prioritizing the low volume seal roads which play avila cross-cutting roe in supporting the Bottom Up Economic Transformation Agenda {GETA) through providing acces to markets for fesh agricultural produce, 7 “The Committe observed that due to the high demand for improved urban mobility and the need to deal with trafic congestion in Nairobi Metropolitan Are, the State Department for tansport has initiated some new projects to adress the challenges. these projects are; Development of Nairobi Railway City, Construction of Ruta - Lenana ~ Ngong -Rongai Railway Line and Raibways-Enbakasl -Ruai Metro line. “72-The Committe was concermed thatthe Students of Bandari Maritime Aesdemy (BMA) are not ble to access Government Capitation since the institution kas not been placed uncer the TVET6.15. Departmental Committee on Socal Protection 78.The Commitee observed that Cash transfers is taking significant amount of the National sovemnments ministerial expenditures ancl may not be sustainable especially. with the ‘Sovernment’s fiscal consoldation plans and mare people coming tothe brackst of vulnerable ptsons. Further, the Social Safety Nt Program has had challenges that are bo structural ad ‘budget. ince the program has been ongoing for a while itis important for the misty 49 ‘undertake an evaluation framework to inform future responses to the current challenges, 74. The Commitee observed that the State department for Social Protection has parcels of land across ‘ie country that are neither fenced or have tte deeds making them susceptible to either enetochment or gmbbing. 6.16, Departmental Commitee on Labour ‘The Commitee noted that the State Department for Labour snd Skills Development is Implementing one ofthe key Boom Up Transformational Agenda areas which isthe “Labour ‘Migration and Export Programme”. The Programme seeks to connect Kenya to the job ‘opportunites available in other countries. Further, Cabinet approved appoint nent of Labour Aliaches to serve Kenyans in the following key labour destination: Unite Kingson, Cara, Astral Foland, Jeddah anc Daman in Suck Arabia, Kuwait ard Oman, 7, The Commilted observed that Government departments and agencies use the Heduma platform to serve customers ho pay forthe services. The platform ince coordinating services provided yy Huduia programme, physical and ICT inftastructure like the Huma Centres, Huds ‘Mashinani programme, data centre, internet services, ullities and call cextre. However, Huxduma Programme relieson exchequer fo the rnning ofthe activites. The ellecaton is prone to frequent budget cuts causing interruptions expecially in internet connection, supplies of consumables and repairs ofboth the centres and the ICT infrastructure. 6.17. Departmental Commie of Justice and Legal Affairs Commitee The Committe noted that presenly, there are filty-three (63) projects that are being implemented by the Judiciary which are fully funded by the exchequer. In FY 2028/24, the projets were allocated Kshs 1.85 billion agains a resource requirement of Kshs 6.3 billion for ‘he ongoing capital projects. Therefore, ther is need for the Judiciary to consider consolidating resources i few projects that are at advanced stages an prioritize them for cempletion 78.The Committee further chserved that there are suits against the government with financial sks tothe tune of Kshs 1.2 tion. n adition, the awards agains the government pending paymentstand at approximately Kshs 81 billion and they are ranging from awards to victims of torture as well s busines litigants agains the State ‘79:The Commitee was concerned over the deplorable state ofthe prisons including seit shorlage of beddings and linen for inaates in most of the prison facilities in the counts leading 10 prisoners living under inhuman conditions. The prisons infrastructure including machinery, Buses, buildings among others are also totally broken down. This is despite the potential of pisos to be sel-sticien through the prison enterprises '50-the Commitee noted with concetm the IEC pending billsamounting to Kshs 4.9ilion of which non-legal suppliers account for Kehs 2.3 billion and Kshs 26 billion account fr legal fees. The Committee sessed the need for the Commision to engage in-house lnwyers to uncertake seme ‘ofthe petitions. The Committee noted there is need forthe Commision to undertake continuous ‘oier registration to guarantee the citizens ther right fo participate in electoral presses 6.18, Departmental Committee on Communication, Information and Innovation £81-The Committed noted that maintenance and rehabilitation ofthe existing fibre optic networks continues fo consume substantial aout of resources through the existing runing contrac Despite the substantial costs involved inthe pas, audit issues have been raised onthe NOFB! projects which raises concerns on the vale for public money In works related tthe ‘onstruction, maintenance and rehabilitation of the fibre optic networks. '82-The Committee was concerned over duplication of Youth Empowerment Interventions. There exists several programmes aimed at imparting relevant ICT skills to the youth to provide gainful ‘conomic opportunites, uch programmes include the Ali programme, Presidential Talent Programme, jtume Digital Enablement pregramme and youth empowerment cere. There is need for colaboration and synergy for convergence to benefit from the economies of scale while preventing duplication of efforts '88-The Committe raised concerns over the strategy andl modalities of undertaking government adversing services, The State Department for Broadcasting and Telecommunistion i in the process of reviewing the distribution of MyGoy from the current medel of using daily newspapers 10 using Postal Corporation of Kenya in the distribution. This is aimed at ‘teamining the modality to enhance value for money in government advertisement. This shall also serve to institute a monitoring and evaluation framework since in the cuent existing advertising stestegy, itis dificult to establish the distribution and delivery of the ised advertisements6.19, Departmental Commitee on Blue Beonomy and irrigation S4.The Committee noted thatthe fll potential of the blue economy’ has not ben adequately exploited due to luck ofa fish stock assessment report which wll indicate the emp and volume fish stock in our marine an inland waters. This will guide the level of investment required by the government and private sector so as to fully exploit our blue economy potenti. To tndertake the assessment, the State Departinent indicted that it required Kshs 3 billion in FY 2028/24, 85. The Committe noted that there was insuicient funding to implement water harvesting projets eros the country and due to climate change, most part of Kenya ae likely tosurer severe water shortage during the dry seasons ofthe year. The Commitee was informed tha o alleviate the situation atleast Kshs. 1 bilion he provided to the nine Water Werks Developnrent Agencies to ‘rll boreholes and construct water pans an small dams across the county. The Committee observed thatthe Oceans and Be Hconomy Office CTOREO) under the Vote O11 ~ Oltice ofthe President has been allocated Kshs. 100 milion. However, the Executive Onder No, 1 of 2028 directed that all activities previously implemented by THEO shoul be ‘coordinated by the State Department for Blue Economy and Fskeres, Thetefere, these funds reef be transferred tothe State Department to sippott co-ordination of the national oceans and blue economy srategy. 6.20. Departmental Commitee on Finance & National Panning The Commitee noted thata numberof state-owned entities SAGAS) under the Sate Department for Beonomic Planning are holding cash surpluses in their Bank aecounts from the previous ‘nanci yearsand its notclear whether necessary dsclogures othe National Treasury are done. 8. The Committee noted that the Controller of Budget i required, by law, 4 report to Peciament and the County Ascerblies the budget implementation satus, Nevertheless, it as been noted tht the reporting. is done mainly on financial performance, leaving out non-financial performance. Therefore, the Office should start analyzing and reporting on the quattetty schievement of targets and key performance indicators to facilitate effective orersght bythe legislature sine the bucge is programe bused, 7.0. RECOMMENDATIONS 7.1. Non-Financial Recommendations 59, ased on the above observations the committee has made the folowing recommendations: Overarching recommendations(D That, taking into account the House resolution on pending bill in the approved report on the supplementary estimates | 2022/2023, the National Treasury fast-ricks review of the pending bills a in collaboration with the Office of the Auditor General and the Office of the Contoller of Budget, develops an enforceable framework to halt the accumulation of pending bills and report othe House by September 2028. (@) That, by September 2025, the National Teastzy spearheads process af reviewing projecs/programmes across all Ministries, Departments and Agencies (MDA) with ‘view to identifying duplication of functions within the MDAs and submit a report tthe National Assembly. (6) That, taking into account the concerted effort and commitment by this Committe: to censure thatthe budget is proportionately distributed access the country, te National ‘Treasury should submit to the National Assembly by end of September 2023, report showing the distibution of national projects across all counties over the last three financial years. This wil facilitate the committee in its ongoing efforts to entance equity in distribution of national resources (4) That, before submission of the 2024 Budget Policy Statement (BFS), the Naticnal Treasury reviews the viability of projects based on amount of resources allocated wth a view 10 ‘liminating peojects with limited of wo resources and to ensure that each project is Addequately fanded and can be implemented within the stipulated time fam. (©) Tha, the National Treasury expedites its review of all Semi-Autonomous Government Agencies (SAGAS) through its newly established high level fiscal risk commitee and reports 10 the National Assembly by Jue 2024, on Slate Corporations and Seti- tutonomous Government Agencies (SAGAS) with overlapping mandates, duplication and redundancies with a recommendation on those that can be merged and/or private’ in order to enhance efficiency in use of public resources (© That, beginning FY 2023/2024, the National Treasury channels the rsouroes for implementation of basic education school infrastructure through the Constituency Development Fund (CDP) framework in otder to ensure accessibilty and proper ‘implementation in all schools across ll counties. (Tha, by December 2025, the tate department for industry spearbeads holistic review ofthe cotton value chain and develops a masterplan to enhance cotton production. This ‘Should include a strategy of ensuring proximity to ginneries in all cotton growing areas including the possibilty of reviving old ginneries that already exist in these areas (6) That by June 2025, the National Treasury submits to the National Assembly in writing, «clear plan of action om how the arrears tothe Bqualisation fund willbe met in totality ‘with clear timelines on when this wil be effected(©) That, following approval of the 2028/2024 budget, the National Treasury should ‘continuously ensure tha ll accounting offices ate strictly adhering to implementation ‘ofthe budget as approved inline withthe provisions ofthe Pubic Finance Management (QTM) Act, 2012 especialy with regard to reallocation of appropriated funds, (10) ‘That, by September 2023, the State Department for Medical Series provides a lear implementation framework for the hiring of the 44844 Community Health Workers as provided for in the 2023/2024 budget. The process of hiring he Cosiiity| ‘Health Workers should be concluded within the coming financial yea (1) That, by SO september, the Orie of the Controller of Budget provides the National Assembly witha framework on how the office wil be reprtingto the National Assembly on the quarterly achievement of Ministries Departments and Agencies (MDAS) ‘non-financial targets an key performance indicators to facilitate effective oversight by the legislature pursuant to section 398) of Public Finance Management (FFM) Act 2012, nergy (12) That, the Cabinet Secretary, Ministry of Energy and Petroleum in conjunction ‘with the Public Private Partnership (PPP) Conte fst tracks the proces of descoping the Lolyangalani - Marsabit 400KV Transmission line, Marsabit -Isolo Transmission Line and Gilgi-Tika Konza 400KY Transmission Line with a view of implementing the tree projects under a Public Private Partnership (PPP) framework by $0 December 2028. The PP framework should clearly state dhe measures put in place to manage the ssciatd risks and contingent liabilities. (13) ‘That, the Energy Petroleum Regulatory Authority embarks on a rsiew ofthe cost allocation formula on revenues and costs on management ofthe rural electrification schemes by ist December 2028 given that the Mercado model of 2008 is not comprehensive in cost capture. The teview should be pegged on target benchmark that the Kenya Rower and Lighting Company (KPLO) should achieve in orce to improve efleieney, accountability and econonty. (14) That, jn ine with the government objective of ensuting conrectivty of all households to electricity, in the next budget cycle, the National Treasury it conjunction With the Sate Department for Energy to ensure that adequate resources ar allocated towards programmes/projects targeted at achieving universal coverage of electricity such as last ile connectivity. ood Seeurity(15) That the Ministry of Agriculture and Livestock synchronizes the implementation ofthe Agricultural Sector Transformation and Growth Strategy (ASTGS) withthe Bottom tup Economic Transformation Agena (BETA) pricity value chains in the next budget cycle. The Ministry needs to immediatly putin place targeted interventions and policies fo ensure thatthe BETA value chains are funded adequately in order to ealise their ‘outputs ancl outcomes inthe Medium Term, Housing and Fublie Works (16) That, the Principal Secretary State department for Housing, ensures that funds provided towards completion ofthe 182 stalled market projects spread acroséthe county that were started under the Eeonomic Stimulus Programme (ESP) are fully tized and the projects completed by en ofthe financial year 2028/2024. (17) That, by 80M December 2025, the Cabinet Secretary Housing, Urban Planning ‘and Pubic works implements Research and Development programmes in Financial Year 2028/24 on the standardization of affordable and sustainable building and construction materials considering the regional diverstes and © allow integration of Junkall artisans tnd MSMEs into the affordable housing initiative. Health (18) That,by 30H june 2024, the Principal Secretary tate Department for Health and ‘Profesional Standards in collaboration with the Nursing Council of Kenya ancl Ken ‘Medical Training College, undertakes the review of the mursing curriculum to make Kenyan nurses more marketable in other countries and to meet the practice requitements| ‘of tes inthe target countries. (19) That, the Cabinet Secretary, Ministry of Health, develops regulations and lmplementaton frameworks for the Emergency Treatment Fund and reports 0 the Committe by $oth September 2028, (20) Tha, the state department for medical services fast-tracks review of he Jaranog ‘Oginga Odinga teaching and referral hospital and the Kakamega County General ‘Teaching and Referal hospital wih a view to determine whether they meet the extra ofbeing upgraded toa level hospital and report tothe National Assembly by December 2028. (21) Tha in the next financial year 2028/2024, the State Department for Macs Services undertakes @ complete revamping of the National Hospital Insirance FundHIE) with a view to making it more responsive to the needs ofall beneficiaries irrespective of thelr health conditions. (22) That, using resources allocate in the 2028/2024 budget, the state department ‘or public health and professional standards expedites the opertionalization ofall the twenty one (21) constructed but non-operationl campuses of KM across the country with & view to ensuring that they are operational by end of the Financial Year 2023/2024, The National Treasury should prioritize exchequer releass towards this programme in order to support achievement of the programme's objectives and the resolutions ofthe House, lands (23) That, the Principal Secretary State Departinent for Lands and Phsical Planning ‘ensures ta the Cashless revenue collection sytem implemented inal remaining 68 regional Ind ofices by June 80th, 2024 to curb revenue losses, enhance Appropriation in Aideolection and reduce the State Departinents reliance on exchequer funding, 24) That, beginning FY 2028/2024, the State Department For Lands and Physical ‘Planning ensures that resources allocated forthe resettlement of evietes and squatters ate utilized prudently forthe purpose of resettlement and a half year review undertaken ‘on the same and submited tothe National Asembly by December 2023, Regional Development 25) That, the Principal Secretary, State Department for ASALS and Regional Development to continuously engage with the National Treasury in enhareng resources to Regional Development Authorities (RDAs) to enable them to undertake projets that improve human ivelhood through Bottom-up Eeononse Transformation Agenda (BETA) intervention programs, including boosting food security and development (26) That, in the next budget cycle, the Slate Department for ASALS and Regional Development to prioritize funding of projects which have capacity 40 generate Appropriations in-nd and reduce overrelianoe onthe exchequer beation 27 That,by 30" December 2023, the Sate Department for Technical and Vocational Education and Training CIVED) undertakes a comprehensive review, evlualion and costing ofall courses being offered in TVET institutions to ensure that they are in line with the government agenda of transforming TVET institutions as centres of incubation