Fiscal Decentralization Knowledge Program Updates
Kenya's Devolution and the Health Sector
New provisions in Kenya's Constitution will affect the health sector in significant ways. Provisions relating to the Bill of Rights and devolution have huge implications for the delivery of health services, especially the funding and staffing arrangements. In a recent presentation, the World Bank's FDKP considers some of these implications, addressing six key areas: assignment of functions, vertical sharing of the national revenue, horizontal costing of the health function, managing transition, the 2012/13 budget, and donor financing.
CRA unveils preliminary formula for horizontal sharing of nationally-raised revenue
On February 28, 2012, the Commission on Revenue Allocation (CRA) announced a preliminary formula that if adopted, will be used to distribute a minimum of 15 percent of nationally-raised revenue among the 47 new county governments. CRA's preliminary formula contains five specific criteria each with its weight as follows: population, 60 percent; basic equal share, 20 percent; county poverty levels, 12 percent; land area 6 percent; and, a fiscal performance incentive of 2 percent. For the next one month, CRA will receive comments from the general public before finalization of the formula. Thereafter, the formula will be presented to the country’s Cabinet and the Parliament for approval and possible adoption.
FDKP to undertake county case studies
FDKP is partnering with the Ministry of Local Government and the Association of Local Government Authorities of Kenya (ALGAK) to undertake county case studies. The studies are designed to generate information that will be used by Kenya’s government and other stake holders in identifying key transition issues with a specific focus on three areas namely: i) service delivery systems, including an examination of the level and cost of ‘core’ and ‘non-core’ urban services being delivered and implications for decentralized ‘front line’ services such as health and agricultural extension; ii) Public Financial Management (PFM) capacity in both District and Local Authorities, broadly defined to include revenues and expenditure management, including a mapping of existing funding flows; and, iii) the nature and effectiveness of social accountability mechanisms and what laws, rules, regulations and systems might best strengthen social accountability in the new Counties, drawing on lessons from current practice. The case studies are expected to generate practical recommendations to inform real time support to Kenya’s decision makers, and address major transition issues relating to the implementation of the new constitutional arrangements at County level. The studies would also establish a baseline of current practice in the existing districts and Local Authorities that will form the basis of the new Counties.