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Opacity, confusion and mystery: The budget season is upon us once again

Tuesday March 07 2017

It is budget time, and I will inevitably be writing about Kenya’s national budget for the next month. I start this week with some initial impressions.

For me, the single most important question we can ask about each year’s budget is how it is different from the current year’s budget.

In most years, this simple question is not all that easy to answer from reading Kenya’s budget documents. This may seem surprising: Shouldn’t this be the focus of budget discussion each year? Shouldn’t the government be selling the public on its agenda for the year and how it builds on what has been done in the past (rather than, say, just doing the same things over again)?

You would think so. But most budget documents appear not to be produced with this in mind. Summary tables at the start of the 2017/18 programme-based budget do not provide last-year figures for comparison. The breakdown under each ministry does provide the estimates for last year, but does not provide clarity about changes over time.

For example, a cursory review of the Ministry of Health budget for 2017/18 show that there is a budget of Ksh3.3 billion for the immunization sub-programme this year, but the budget for next year is zero. Of course, there is no way this is correct.

It possibly reflects a re-organisation of the ministry: There is a new sub-programme elsewhere for reproductive, maternal, neonatal, child and adolescent health with a budget of Ksh3.8 billion in 2017/18, but zero budget in 2016/17.

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This appears to have at least one immunisation related target for the coming year, and there is a sub-programme under administration called Health Policy, Planning and Financing that also has an immunisation target. So it is unlikely the budget for immunisation is going to zero.

However, this presentation raises any number of questions. First, why was the immunisation sub-programme eliminated? Second, was it split between other sub-programmes and in what proportion? Third, how much is going to immunisation activities in 2017/18, wherever they may be located, for us to compare that spending with 2016/17? And finally, why is immunisation a target for an administration programme that is focused on policy and planning?

I went back to the 2016/17 budget to see if I could make sense of this, and I noticed something odd. In this year’s budget, the immunisation sub-programme has a target of full immunisation for 80 per cent of all children. That is also the target in the current year budget for 2017/18 and 2018/19. The new 2017/18 budget has a lower target of 74 per cent of children under one year to be fully immunised.

It is possible that immunisation among the whole population of children could be higher than immunisation among one-year olds, but one would expect the government’s target for under one-year-olds to be higher, since that is easier for the Ministry of Health to control in a given year.

In any case, there is no explanation for the shifting indicators or targets between years.

There are some modest improvements in the presentation of this year’s budget. For example, many of us have been complaining that the government uses vague classifications like “other recurrent” and “other development” in the programme budget, and that often these residual categories have fairly large allocations.

Sticking with the Ministry of Health budget, we can see that whereas the 2016/17 budget had Ksh197 million and Ksh14 billion, respectively, in other recurrent and other development, those figures have all been moved to other areas: Social benefits, non-financial assets and use of goods and services. And these figures have been calculated for 2016/17 to allow comparison with 2017/18.

This is a step forward, but the decision to reclassify Ksh14 billion in “other development” as “use of goods and services,” while maintaining it as capital expenditure, raises questions.

Normally, use of goods and services is another way of saying operations and maintenance costs, and these are typically recurrent rather than capital in nature. Yet the Ksh14 billion here remains under the capital budget. The lack of further disaggregation makes it impossible to know what this is for or whether it is correctly classified.

More than Ksh3.2 billion of this capital “use of goods and services” is under the reproductive, maternal, child sub-programme mentioned above, and the indicators for this programme are related to immunisation and family planning “commodities.”

Unless these are donor financed, and therefore classified as “development,” and so as “capital” —erroneously, but consistent with history — I am not able to understand why such activities should be regarded as capital in nature.

We are thus in the same position we have been in with the counties: Unsure whether our budget is classified properly and whether we are meeting the fiscal responsibility principles.

Jason Lakin is Kenya country director for the International Budget Partnership. E-mail: [email protected]

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