Uhuru wants new CDF formula

July 7, 2009

, NAIROBI, Kenya, Jul 7 – Finance Minister Uhuru Kenyatta has proposed an amendment to the formula used to decide allocations for the Constituency Development Fund (CDF).

Speaking during a meeting with members of the Parliamentary Budget Committee, Mr Kenyatta said allocations should be derived from the last audited revenues.

The Finance Minister said this would reduce instances where Treasury has delayed in releasing the devolved funds.

The CDF is currently pegged at 2.7 percent of the total revenue collected by the Government annually.

The proposal however was opposed by Parliament’s Finance, Trade and Planning Committee Chairman Chris Okemo who said the move had no merit as it focuses on perceived expenses rather than collected revenue.

“Ordinary revenue which is used to derive the allocation has been rising over the years. We should be agreeing on reconciliation and actual disbursement,” said Mr Okemo.

Meanwhile, the Finance Minister said the draft framework on the operationalisation of the Financial Management Act will be ready by the end of August.

The Act got presidential assent on June 19, and is constitutionally required to be operationalised within three months.

“We have begun to work with the IMF to assist in finalising the Act,” the minister said.

“A taskforce has been constituted to fastrack the operationalisation so that the upcoming budget can be produced by the Financial Management Act and the recent Parliamentary Standing Orders,” Mr Kenyatta continued.

He said part of the framework will focus on the implementation of the growth stimulus packages read in last month’s budget, adding that they are looking at how the funds can be availed and disbursed quickly.

The Deputy Prime Minister also said they were looking to address the procurement system to ensure that they rid the process of the bureaucracy that would slow down spending of the stimulus.

Mr Kenyatta says he expects to hold a sensitization session with government and CDF co-ordination officials on the new scheme in the last week of this month to look at how the framework will be set up.

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