Public Sector Governance and Accountability Series: Budgeting and ...

14
Country Case Study:
Kenya
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Reforming systems of public finance management in Kenya has
long been a priority for the Kenyan government. Improvements
in planning, budgeting and budget execution, and oversight
were recognized to be fundamental in achieving key development
objectives. The first reforms to make the budget an instrument of
prioritized policy implementation were introduced as early as the
1970s. The latest wave of reforms commenced in the late 1990s and
early 2000s as deteriorating budget outcomes exacted a toll on
macroeconomic growth, fiscal management, and service delivery.
The reforms drew on experience in the region and introduced various
instruments of expenditure review, budget formulation, and execution
control to improve Kenyan outcomes. This case study reviews
earlier reforms but focuses its discussion on the current system of
budget management, including reforms. It highlights the challenges
of reforming complex systems when human resource capacity is
limited, accountability is insufficient, and the reforms do not
address quickly the nuts and bolts of underlying budgeting systems.
A History of Budget Reforms
The Kenyan budget system functioned reasonably well during the
economic boom of the 1960s and early 1970s, with five-year development
plans funded selectively through projects in an annual
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