FIN 3206: PUBLIC SECTOR FINANCE

Mutisya Patrick Mutunga 21/03675

Assignment 2

Required

Discuss the public sector reforms that have been undertaken in Kenya in the past ten years

1) Policy on Finalization and Presentation of Bills originating from the Executive to the Parliament
Article 109 (2) and (5) provides that any Bill may originate in the National Assembly and/or be
introduced by any member of a Committee of the relevant House of Parliament. The Cabinet Secretaries
and the Attorney-General will not be members of Parliament. Neither the Attorney-General nor the
Cabinet Secretaries shall be responsible for introducing Bills in Parliament. In view of this, a policy on
how bills emanating from the Executive to the relevant Committees for tabling to Parliament shall be
developed.

2) Policy on Exit Strategy

Following the creation of the County Governments, rationalization of the number of Ministries to
between 14 and 22 and dissolution local authorities, the National Government shall develop an exit
strategy for those officers who will either voluntarily or otherwise leave the public service.

3) Policy on provision of office accommodation to public staff working in the County and National
Government

Guidelines shall be developed on how office and physical facilities will be shared/allocated at the county
government level.
 4) Policy on Performance Management

In order to operationalize Article 190 (3), the National Government in consultation with the County
Government shall formulate a framework that will guide performance Management.

5) Review Guidelines on the Training Revolving Fund for Public Officers

Guidelines the training revolving fund shall be reviewed to ensure that public officers, both at county
and national level are able to access funding required for training.

6) Develop Data Base of Officers Exiting the Public Service

Kenya has a large pool of retired public officers who have skills and competencies that are required by
Government. To tap into this pool of human resources, data base of retired officers who could be hired
to provide identified services shall be created. A strategy to operationalize and administer this initiative
shall also be developed.

7) Civil Service Reforms

The Government has been carrying out civil service reforms over the past decade by downsizing the core
civil service, harmonizing pay and benefits and putting in place interventions to enhance civil service
efficiency. Indeed, the civil service has declined from 272,000 in 1991 to 193,000 in 2002. In spite of
this reduction, the wage bill as a percentage of Government revenue is currently around US$40 in Kenya
as compared to 30-33% in other countries within the sub region.

The Government is strongly commended for its announced commitment to accelerating the Public
Service Reform to create a leaner, efficient, motivated and more productive institution that
concentrates public finance and human resources on the delivery of core government services.

8) Local Authorities Reforms

Throughout the world, the consensus is that governance and service delivery are improved when
managed as close to the beneficiary as possible to better respond to his/her needs. In addition,
businesses generally choose to locate in those areas where essential services are delivered in a reliable
and low-cost way.

To date the most significant reform implemented is the Local Authority Transfer Fund (LATF) and
associated measure to strengthen local authorities’ capacity to manage their finances and improve
service delivery.
 9) Public Enterprise Reforms

One of the principal findings of the 2003 Public Expenditure Review was the inordinate level of funding
which was transferred from core Government services to cover the debt incurred by lossmaking
parastatals involved in economic activities that are generally more efficiently managed by the private
sector.

Therefore, the Government statement that it “remains fully committed to moving away from
commercial activities that can be performed more efficiently and effectively by the private sector” is
welcomed by the donor community, investors, and Kenyan consumers.

In the ERSWEC, the Government has presented an overview of its plans to:

• Further liberalize the telecommunication sector;

• Prepare Kenya Railways Corporation for concessioning

• Transform the Kenya Ports Authority into a landlord port by June 2004;

• Prepare a specific time-bound action plan to realize the its objectives

10) Performance Contracts

The Government has approved that all Permanent Secretaries, Chief Executives of State Corporations,
and Heads of Department should be placed on performance contracts. Performance Contracts will tie
an organization or individual to undertaking specified tasks at 12 predetermined levels of performance
within a given period of time. They are another option available to the Government to improve the
performance of the service.

11) Streamlining Registries in Ministries/Departments

The Government is concerned about the poor state of registries and records management in the Public
Service. The current state of registries has contributed to their inability to provide accurate records and
information needed for quick and timely decision-making leading to poor service delivery and opening
opportunities for corruption.

12) Training and Capacity Building

The Government has developed a Recruitment and Training Policy in the Civil Service whose purpose is
to:

• Move towards demand-driven training and multi-skilling.

• Ensure proper supply and development of skills.

• Peg promotion on both performance and training.

The Government has formulated a strategy for introduction, development and implementation of
electronic based service delivery. The strategy is modelled in the broad E-Government context that
include:

• Electronic Service Delivery: This entails development of a Government of the future with a shift to
citizen and customer focused thinking with citizens’ access to more public services, delivered online,
anytime, anywhere.

• Business for E-Government: This is the electronic procurement of goods and services.

• E-Governance: This will enhance public participation in decision making process, reshaping of public
policy and evaluation of administrative effectiveness and service delivery efficiency and will lead to
transparency, accountability and public responsibility.

14) Public Service Integrity Programme

Under the Public Service Integrity programme, the Government has enacted the Public Officer Ethics Act
that stipulates the code of conduct for Public Servants.

Procurement Reforms

The public must be assured that Government obtains value for money when letting out contracts.
Ministries responsible for contracts are required to ensure exacting standards are demanded in
contracts and that implementation strictly adheres to the quality and quantity specified, within the price
and on time. Contractors who fail to meet their obligations will be barred from tendering for future
contracts.

15) Accounting and Audit Reforms

Accounting and internal audit systems and procedures are being strengthened through introduction of
an Integrated Financial Management System (IFMIS) in all ministries/departments, provinces and
districts to establish a more transparent and responsive system that provides up to date information on
disbursements, payments and commitments at all levels of Government. The System will help control
over-expenditures, unauthorized payments and the creation of pending bills.

16) Parastatal Reforms and Privatization

The Government is committed to divesting from commercial enterprise and seeks to establish private
sector participation in provision of essential infrastructure. The process of reducing the role of
Government in commercial activities will continue through accelerating the privatization programme for
State Corporations.
 17) Legal Sector and Judicial Reforms

Reforms under this area are intended to establish a judicial process that is predictable, speedy and
beyond reproach. An equitable, predictable legal framework and ready access to a well-functioning
judicial system are basic human rights. They are also a fundamental prerequisite for economic and
social development.