CRA meets with the 47 counties over the 2024-25 county recurrent expenditure budget ceilings
The Commission met with representatives from all the 47 counties and other key stakeholders on 13th December 2023 at Nairobi Safaripark Hotel to deliberate on the County Recurrent Expenditure Budget Ceilings for the 2024-25 financial year.
These consultations are instrumental in shaping the proposed ceilings, gathering vital insights to finalize the budget framework. Counties are concerned with their capacity to deliver essential services within the confines of the allocated budgets, given Kenya’s prevailing challenges including inflation, the escalating cost of living and the unique requirements of specific regions.
Under Article 216(2) of the Constitution, the CRA is entrusted with making recommendations concerning county government financing and financial management. The recommendations pertaining to Recurrent Expenditure Budget Ceilings are subject to approval by the Senate. Over the past decade, the Senate has consistently endorsed CRA’s recommendations, either with or without amendments, emphasizing the significance of these guidelines in steering county finances.
Development of the 2025/26 ceilings
Budget ceilings are the maximum level of expenditure computed to achieve strategic goals of a government entity. They aim to encourage fiscal discipline and control recurrent spending, to retain more funds for development and service delivery.
The 2025/26 fiscal year Ceilings have been crafted with a keen awareness of Kenya’s limited fiscal space. During the event, CRA’s Chairperson of the Public Finance Management Committee Commissioner Hadija Juma noted that certain emerging issues had significantly affected the 2024/25 ceilings:
- Staff Rationalization Deadline Extension: The Senate’s Standing Committee on Finance and Budget, in their May 2021 report on the County Allocation of Revenue, extended the deadline for staff establishment rationalization in county governments to June 2023.
- Kenya Gazette Notices: Notices No. 10348 and 10350 of August 2023 addressed the remuneration and benefits for state officers in County Assembly and County Executive roles.
- Financial Adjustments: Factors like the introduction of the New Housing Levy and the amplified deductions in NSSF and NHIF have contributed to the evolving fiscal landscape.
- Review of Civil Service Remuneration: The August 2023 review of remuneration and benefits for civil service roles in county assemblies and executives also impacts the budgetary considerations.
In formulating these Ceilings, the CRA incorporated the diverse needs of county governments, ensuring they have the essential resources to fulfill their mandates. The ongoing open consultations with all 47 counties is critical in gathering input to fine tune these Ceilings.
Some key issues raised
Many counties are struggling to spend within the expenditure ceilings provided by the Senate, due to the constrained fiscal space and the ever-increasing cost of living. According to Mary Mwiti, the CEO of the Council of Governors, the Ceilings have improved “harmony between County Executives and County Assemblies in resource allocation especially during the budget making process hence allowing for concerted efforts to provide services to the citizenry.”
The CoG, however, argues that the Ceilings have stagnated despite the rising cost of goods and services, and by extension, cost of living. The Governor’s forum asked CRA to reconsider the Ceiling’s adjustments to accommodate the new realities.
CRA’s Vice Chairperson Koitamet Olekina, however, challenged the counties boost their Own Source Revenue (OSR) to reduce disputes with the national government over equitable share: “You might even surprise us by lending spare funds to the National Government,” he said.
Representatives from the CRA, Ethics and Anti-Corruption Commission (EACC), Salaries and Remuneration Commission (SRC), County Assemblies Forum (CAF), Council Of Governors (COG), Office of the Controller of Budget (OCOB), Society of Clerks at The Table (SOCATT), Parliamentary Budget Office (PBO), Office of Auditor General, Intergovernmental Relations Technical Committee (IGRTC) and County Government Officers attended the event.
CECMs Finance and Planning, Speakers, MCAs, Directors of Finance and Budget, County Assembly Clerks, Economists, Senior Fiscal Analysts, Budget Officers, Chief Officers, Principal Finance Officers, Heads of Budget and Planning, Chairs of Caucuses and Heads Service Boards. Over 15 CECMs and Speakers of County Assemblies and over 20 Clerks of County Assemblies were in attendance. All 47 counties were represented.
CRA Commissioners Hadija Juma, Dr. Isabel Waiyaki, Jonas Kuko and Hon. Fatuma Gedi, CEO James Katule and staff representatives were also in attendance.
View the Proposed County Recurrent Expenditure Budget Ceilings Presentation.
