Kenya’s 2019/20 budget and the big four agenda: a pro poor analysis

This paper, written by Dr Miriam Omolo, with support from DI’s Boniface Owino, provides a detailed analysis of the government of Kenya’s budget for the 2019/20 financial year, and analyses how it might impact the poorest people. The analysis focuses on resource allocations to the big four development agenda priority areas – universal healthcare, affordable housing, manufacturing and food security. The analysis also covers resource allocation to education and social protection programmes.

Key findings

While resource allocation to some pro-poor programmes has increased, there are significant funding gaps that should be addressed:

• Health sector: The health sector has received KES 36.67 billion, representing only 73% of the required resources. The Health Policy, Standards and Regulations programme, which is to help achieve universal health coverage, has been allocated KES 16.1 billion in the financial year (FY) 2019/20; while this represents a 31% increase from FY2018/19, it translates to only 57% of the resources required.
• Housing: The Delivery of Affordable and Social Housing Units sub-programme has received KES 7 billion to deliver affordable housing units. This funding will go to the Kenya Mortgage Finance Company to facilitate access to affordable housing. The company has received a further KES 1.2 billion from banks and savings and credit cooperatives, with KES 400 million expected from the International Finance Corporation and Shelter Afrique.
• Manufacturing: The Promotion of Industrial Development and Investment sub-programme, which falls in the State Department for Industrialisation and Enterprise Development, has been allocated KES 1.1 billion. This is only 12% of the resources required.
• Food security: In FY2018/19 allocations to food security initiatives totalled KES 9.3 billion; this declined to KES 7.3 billion in FY2019/20. In FY2018/19 the food security initiatives received 100% of total resource required; the proportion received declined in FY2019/20 to 40%, despite the risk of food security situation worsening due to poor rains.
• Education: Free Primary Education and Free Day Secondary Education programmes received 77% and 47% of the required development resources respectively. The Health and Nutrition programme (which includes school feeding) received 74% of required total resources.
• Social protection: Allocation of resource to social protection for vulnerable groups increased from KES 11.3 billion in FY2018/19 to KES 13.4 billion in FY2019/20. In FY2019/20 cash transfers to orphans and vulnerable children, including those outside households, amounted to KES 6.6 billion, while transfers to elderly people totalled KES 5.1 billion. This allocation is similar to that in FY2018/19.

Key recommendations

• The government needs to increase the resource mobilisation efforts that will enable adequate funding for the health, education, manufacturing, food security and housing sectors.
• To ensure data quality, data from the various budget documents published by the National Treasury, the Office of Controller of Budget and county governments should be harmonised.
• Coordination between the county and national governments should be improved through the Intergovernmental Relations Technical Committee, which is mandated to handle such frameworks. Further legislation is needed to address the gap created by the lack of clarity on the role played by national and county governments in the industrialisation agenda.
• The establishment of the Public Investment Management Unit should also be backed by legislation and adequate resource through the national budget and should include accountability and enforcement clauses, which will ensure effective implementation of public investment programmes.

Read our report on Kenya’s budget for last financial year

Photo: DFID International Development Research Centre/Thomas Omondi. Thomas Osore Omulako, 74, a rainmaker in the Nganyi community shows his maize farm. The Nganyi community is a largely subsistence farming community. Therefore, much of the income of the community and their source of livelihood is very much dependent on rainfall.