FY 2010 Prohibition On Assistance To Central Governments

UNCLAS NAIROBI 000092

SENSITIVE
SIPDIS
SIPDIS
STATE FOR EEB/IFD/OMA BRIANA SAUNDERS

E.O. 12958: N/A
TAGS: ECON AID EAID EFIN PREL
SUBJECT: FY 2010 Prohibition On Assistance To Central Governments
Whose Budgets Are Not Transparent

REF: 10 STATE 1923


1. (SBU) SUMMARY The GOK publishes annually the proposed budget as
passed by parliament and signed by the president. The published
budget provides detailed income and expenditures which is publicly
available for purchase. The published budget is relatively
accurate in reflecting actual income and expenditures but some
variance is found between proposed and actual figures. No events
during 2009 impacted the fiscal transparency of the budget process.
The GOK did not initiate new transparency efforts in 2009. End
Summary.




2. (SBU) The following information is keyed to reftel tasking:



a. The GOK is receiving U.S. foreign assistance funds from the FY10
SFOAA.



b. The GOK annual budget is publicly available through the GOK
Government Printer for a fee of Ksh6000 (approximately $80). The
fee is based on the size of the budget which was six volumes this
year. Basic budget information is available online through the
Ministry of Treasury but the online information alone is not
sufficient to meet the expectations of the reftel request. The
online information can be found at www.treasury.go.ke
.



c. The budget is detailed and provides line by line items on income
and expenditures. In addition, quarterly revised budget estimates,
which include updated information and re-allocations, are published
and available to Kenyans. The national defense component of the
budget is the only portion which is not broken out in detail.
National defense expenditures are shown on one line in aggregate.



d. The quality of Kenya's budgetary planning has improved since the
adoption of the Medium Term Expenditure Framework. Funds actually
spent for recurrent expenditures are generally consistent with
published budget figures. However, according to the World Bank,
KenQ typically spends only 60% of its approved annual development
expenditures. This shortfall reflects weaknesses in project
planning and implementation. For revenue, actual revenue only
deviated by 4.5 percent in the 2008/2009 budget cycle and by 8
percent in the 2007/2008 cycle. Therefore, Kenya's published
budget projects a credible estimate of revenue collection.



e. No significant events have occurred in 2009 which would affect
Kenya's fiscal transparency.



f. The GOK did not undertake any new efforts to improve fiscal
transparency in 2009. With a potential new constitution, the GOK
could have substantial changes to fiscal transparency in 2010.




3. (SBU) COMMENT The GOK provides a transparent and credible budget
each year. In general, Kenya's budgetary and macro-economic
management is impressive given the magnitude of other issues,
including corruption. End Comment.
RANNEBERGER