How to consolidate and improve gains in Budget transparency.

Post date: Tue, Feb 12, 2013
Category: General
By: John Mutua,

Political parties and coalitions are in overdrive in their campaigns to woo Kenyans to vote for their respective candidates in the the March 4th general elections.

Given the expanding size of Kenya’s budget (now over a trillion shillings), and a variety of new costs that are required to implement the Constitution and the new devolved system of government, the next President must be an astute manager of public finances. He or she must find ways to balance the demands of Kenyans for new services, as reflected in the many campaign promises presidential contenders have made, and the need to maintain a balanced fiscal position, even as the Kenya Revenue Authority has failed to meet its revenue targets.

Government budgets are essential for ensuring the delivery of critical services like basic education, maternal health, water, security and roads. At the same time, we need to know if government is investing our taxes efficiently in these services. If budgets are not sufficiently open, the President will face challenges in convincing Kenyans that the choices they are making about the balance of spending and taxation are the right ones. Moreover inadequate budget information implies that citizens cannot meaningfully participate in budgetary policies and decisions. It is also difficult to hold the government to account for its expenditure, which may lead to funds mismanagement and corruption.

In spite of the importance of budget transparency for facilitating management of the economy and ensuring adequate public participation and monitoring, most governments release little information about their spending. On 23 January, 2013, the International Budget Partnership released the Open Budget Survey 2012. The Open Budget Survey is the only independent, comparative, and regular measure of budget transparency and accountability around the world. Produced every two years by experts outside government, the 2012 Survey reveals that the national budgets of 77 of the 100 countries assessed – these 77 countries are home to half the world’s population – fail to meet basic standards of budget transparency. At the same time, there are global leaders: New Zealand leads the way with a score of 93 followed closely by South Africa who scored 90.

The OBS is not an opinion poll; it uses an internationally recognized, document-based methodology to give each country a transparency score on a 100-point scale called the Open Budget Index. Budget information is supposed to be contained in eight key budget documents that all governments should publish according to international standards. It should be noted that publishing these eight key documents are also assessed on comprehensiveness, meaning the level of detail they contain.

Open Budget Index 2012 score for Kenya is 49

Kenya’s OBI 2012 score of 49 is a little above the average score of 43 for all the 100 countries surveyed. This score has not changed from the OBI 2010. The score indicates that the government provides the public with only some information on the national government budget. On an East Africa cross county comparison, Uganda had the highest score of 67, with Kenya coming in second, followed by Tanzania at 47 and Rwanda at 8 following suit.

Out of the eight budget documents Kenya produces and publishes six, including the critical Executive Budget Proposal which presents government’s detailed plans for the coming budget year which carries most weight in the survey. It is commendable to note that Kenya for the very first time in the last two financial years 2011/12 and 2012/13 published a Citizen Budget, a simplified version of the executive budget proposalthat breaks down its technical content. The government of Kenya produces for internal use but does not publish two documents; the mid-year review and year-end report. The government could easily publish these documents and improve its score on the Index.

Kenya has generally increased the amount of information it makes available in the eight key budget reports with the exception of the enacted budget.

Public participation throughout the budget process

Budget transparency needs to be accompanied by meaningful public participation in budget decision making and budget monitoring. This is the reason why the 2012 Survey for the very first time includes a new section to assess opportunities for public participation with the executive, the legislature and the office of the Auditor General.

Kenya performs exemplarily with regard to mechanisms for public engagement with the legislature through public hearings as stipulated in article 221 (4) of the Constitution. However there is room for improvement with regard to the Executive ensuring that they articulate the agenda for public sector hearings and for the Office of the Auditor General institutionalizing formal mechanisms for the public to participate in the audit process.

As Kenyans ready to elect new leaders, we offer some recommendations for how they can improve budget transparency: The Ministry of Finance should publish all of the 8 key budget documents; increase the comprehensiveness of the executive budget proposal by fully rolling out programme based budgeting and providing more information on tax incentives, and intergovernmental transfers

Engage the public prior to producing the Citizens Budget and use innovative and multiple tools and media. Ensure that regulations on public participation that will be prepared by the National Treasury as stipulated in the Public Finance Management Act 2012 meet certain basic principles, such as a formal mechanism for public engagement throughout the budget processes Funding to the OAG should be scaled up to match the resource required for OAG to fulfil its mandate including requisite staff numbers especially given that this office will undertake audits at both the national and in the 47 county governments. The overall recommendations can be achieved in the short to the medium term, and Kenyans should ask which of the presidential candidates is more likely to deliver on the promise of greater transparency and public participation.

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