KENYA: Supporting public financial management reform in Kenya

Improving public finance management is a major challenge for economic development, as the significant rise in the deficit is gradually reducing budgetary room for manoeuvre. The challenge for the Kenyan government is to make the necessary budgetary readjustments while limiting the recessionary effects.

The reform of public finances aims to create a public finance management system that promotes transparency, accountability, equity, budgetary discipline and efficiency in the management and use of public resources.

In order to support the implementation of this reform strategy, the World Bank and AFD approved a Sector Budget Support (GESDEK) to the Government of Kenya, which uses the "results-based program" instrument that is articulated around a reform matrix comprising 10 indicators.

The aim of this projectis to:

• Improve public financial management in areas that have a direct impact on the efficiency and effectiveness of public action;
• Support the implementation of Kenya's public finance reform strategy, through multi-year sector budget support (public policy loan), backed by a reform matrix incorporating indicators working on key items such as the prioritization of investments, reliable financing of public services, the efficiency and transparency of public procurement and the production of external quality audits.
• Promote budgetary risk management for the Kenyan government in the context of decentralization. 

The project is accompanied by a grant subsidy of 1.2 M EUR to Expertise France from the Technical Expertise and Exchange of Experience Fund (FEXTE) mobilizing French Expertise to help Kenya implement the reforms. 

This project will have the following benefits: 

• Improve Kenya’s public financial management system. Thanks to this project, the identification, selection and implementation of investment projects will become more transparent and efficient. At the same time, financing of these investments will be improved through more effective debt management.
• Improvement of the overall function of the Auditor General as an external auditor.