Support to Public Finance Reforms
Title: Programme to Support Public Finance Reforms in Kenya
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Ministry of Finance
Overall term: 2011 to 2016
Kenya’s new constitution underscores and reinforces the country’s commitment to the principles of good financial governance, namely transparency, objectives-orientation and efficiency. This happens against the background of a public finance system in Kenya that is not fulfilling these principles, yet. The new constitution also provides for the establishment of new state and governance structures, like the creation of counties. This has a significant impact on public finance systems at both national and local level. Transparency-orientation and efficiency have to be guaranteed in full.
The budget and procurement system at national and county level are consistent with the principles of Good Financial Governance and comply with the new constitution of Kenya.
The programme supports the public finance reforms of the Kenyan Government in line with the national priorities. The GIZ contribution is clustered in three different components:
Transparent and objectives-orientated budget management. This component supports the implementation of programme-based budgeting, which enables parliament and the general population to better illustrate the government’s objectives. Advisory services also focus on developing the capacities for internal audits within the government and on introducing new assessment methods for efficiency audits. Another aim of the cooperation is to improve the legal framework. Civil society organisations are advised in a number of areas, for example on carrying out budget analyses and making this information accessible to the public.
Capacity development in public procurement. The programme supports the Public Procurement Oversight Authority (PPOA), a semi-autonomous government agency that regulates and supervises public procurement. The aim of the cooperation is to improve the legal framework and to introduce useful instruments for contract awarding. This component is also developing capacities at institutional and individual level for the procuring entities
Intergovernmental fiscal relations. In this component, we are aiming to develop the legal and organisational basis for strengthening intergovernmental fiscal relations and establishing local budgetary systems.
Through the advisory services on budget management and procurement systems as well as on strengthening intergovernmental fiscal relations, the programme is playing an important role in improving the budget system along the principles of good financial governance at national and local level. Public funds are applied more efficiently, and the resulting freed-up resources can be used to deliver essential public services at national and local level. In conjunction with efforts to implement national development strategies more effectively, this reduces poverty, corruption and increases the legitimacy of the state. The national development strategies support democratic processes, encourage the population to participate in political processes and make a considerable contribution to reducing conflict in society.