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|Description||1. The Bank has used GPF resources over the past four years to respond to Kenyas changing governance needs and opportunities. Most significantly, GPF support has enabled the Bank to scale up support on the ambitious decentralization set in motion by the 2010 Constitution. Kenyas decentralization is among the most rapid and ambitious devolution processes going on in the world, with new governance challenges and opportunities as the country builds a new set of county governments from scratch. In parallel, the GPF has supported the strengthening of governance measures in selected World Bank service delivery and CDD projects, some of which in turn are feeding into decentralization from the bottom up. Finally the GPF has supported innovations, including Kenyas leadership on opening up government data.
2. These resources have contributed as the Bank has adapted to a rapidly shifting political and governance context. With the promulgation of a new Constitution in 2010 (just as the first GPF to Kenya was being approved), Kenya entered a critical phase in its history. The Constitution provided for enhanced checks and balances within the government, an enhanced role of Parliament and citizens, an independent judiciary, as it seeks to address long-standing inequities. Most notably, the Constitution provided for a major devolutionnot only devolving significant resources and functions, but also creating a whole new layer of county government. At the same time, in 2010 the GoK and Bank were facing governance challenges in the Kenya portfolio, which triggered a concerted response to strengthen governance mechanisms in projects focused on decentralized service delivery. Kenya was also getting increasing global attention due to its dynamic ICT sector, including a widely used mobile money system.
3. GPF grants have coincided with these momentous changes. Since 2010 the Government has introduced sweeping changes in Kenyas policy and institutional framework. Multiple new laws have been put in placeincluding new legislation on county government, urban areas, public financial management, and the transition to devolved governmentas well as multiple national bodies and commissions with responsibility for devolution. Elections in March 2013 marked the official launch of decentralization, as 47 new county governors and county assemblies were elected and began the challenging work of setting up new institutions, as well as a new national senate representing each county. Since then, functions and funds have been transferred to the new countiesmore rapidly than the 3-year transition envisioned under the Constitutionand new county institutions are being built from scratch.
4. With a $5.4 million grant amount, Kenya is one of the largest recipients of the GPF. The GPF has enabled the Bank to increase engagement on decentralization and other changes spurred by the Constitution, linked to the broader country program. The GPF allowed the WB to field a team of staff and consultants focused on devolution and governanceproviding analysis and technical assistance (TA) on emerging policy reforms, on key issues related to the transition to devolved systems, and on institutions and systems, standards, processes related to the rollout of devolution. Still, it is important to flag the challenges of providing support in a period of major policy and institutional change: the program has required frequent re-prioritization amidst wide-ranging and shifting demands. The program has contributed to some significant achievements, while keeping in mind that a devolution as radical as Kenyas will take years to implement, and these are still early days.
5. The Kenya Accountable Devolution work has been cross-sectoral from the beginning (co-managed by staff specializing on macro-fiscal issues, social development, and public sector governance) while working closely with sectoral colleagues in human and sustainable development. The program has been guided by the Country Management Unit and closely integrated with the Banks overall Kenya programwhich now, partly as a result of work done with GPF supporthas a major focus on decentralization over the coming 5 years: supporting devolution is now one of three pillars of the Banks new Kenya Country Partnership Strategy (CPS) 201418, which targets new World Bank Group investments of up to $4 billion during its five-year implementation period.
6. This work has contributed to wider awareness among policy makers and informed citizens about the governance processes, opportunities, risks, and operational issues to be addressed in order for Kenyas ambitious devolution to succeed, including analysis of available options for strengthening citizen engagement. In short, the GPF has contributed to the legal/policy and institutional framework for decentralization being informed by global and local analysis, as well as by the experiences of IDA-financed projects focused on institutions and systems for decentralized service delivery. Building on the Banks previous Australia-funded Fiscal Decentralization Knowledge Program, the focus areas of the GPF grants in Kenya include:
Understand and address the fiscal implications of revenue sharing vertically between national and county governments and horizontally across counties. Fiscal analysis on the effects of revenue allocation and fiscal sustainability is informing national and county decision makers. The GPF is also supporting key stakeholders address challenges and gapsit has supported the Commission on Revenue Allocation (CRA), Council of Governors (COG) and Kenya Law Reform Commission to develop a set of model county revenue laws and Nairobi City County to assess options to enhance revenues via reforms of the property rates system.
Strengthen public financial management and aspects of human resources management under decentralization. The GPF has supported analysis and comments on the new Public Financial Management Act, pending PFMA regulations, and together with the National Treasury and the Kenya School of Government (KSG), the design and initial rollout of a set of County PFM Training Modules (e.g. budgeting, accounting and reporting and procurement), including citizen participation measures. Over 300 county officials have so far been trained on aspects of PFM. The GPF has also provided demand-driven support to four counties on participatory planning and budgeting as they developed their 2014/15 budgets. In addition, the GPF has provided TA support to the Kenya Salary and Remuneration Commission on issues of wage bill management, and benefits and remuneration policy, which are guiding discussions and reforms in the context of devolved system of government. Strengthen access to county level data and monitoring of subnational performance. Widely disseminated County Fact Sheets provided the first empirical breakdown of key development indicators across forthcoming counties. Rollout of the Kenya Open Data Initiative, the first major open data initiative by a developing country in sub-Saharan Africa, was supported by the GPF. An innovative Kenyan initiative to spur demand for open dataCode4Kenya fellows, funded by a WB Innovation Fund and the GPFis now being replicated in other countries. Following on this work, the Ministry of Devolution has developed a set of standards/guidelines for county performance monitoring, and the Council of Governors is building county open data dashboards to monitor performance.
Strengthen public participation/social accountability mechanisms in county systems and decentralized service delivery projects. With GPF support, provisions for county transparency, accountability, and participation have been enhanced in the PFM Act, regulations, and new national training curriculum for county PFM. In parallel, partly in response to previous forensic audits, WB-financed GoK projects have been supported to strengthen governance and social accountability mechanisms, which in turn are feeding into sectoral policies and institutional changes. Most notably, the Ministryof Health is mainstreaming social accountability measures from GPF-funded pilots into national health policy and National Health Sector Support program.
Enhance devolved service delivery via the Banks portfolio and donor coordination. A government-donor Devolution Sector Working Group is in place, and an initial mapping of how donor-funded projects are distributed across the 47 counties has been conducted (with GPF support). Under an IDA-financed Kenya health program, a conditional grants framework developed to enable Ministry of Health grants to local health facilities.
7. An Annual Review by the UKs Department for International Development (DfID) undertaken in November 2013 gave an overall score of A to the Program. The review said that in its first year, and in a difficult implementing environment, the GPF Program has made contributions to: Initial analysis estimating the costs of devolution to the counties; Development of county PFM training modules;
Practical research on introducing public participation in county governments; Improved public access to information on counties and their governments; and
Technical assistance to the Ministry of Health to integrate Social Accountability (SA) approaches in the Health Sector Services Fund (HSSF).
8. Although the GPF will close in 2015, much of the work has been integrated into the country program, including a series of operations planned in support of devolution. Supported governance and social accountability mechanisms are being incorporated in new operations involving decentralized service delivery. This includes a new lending operation and Multi-Donor Trust Fund in support of devolution with a focus on strengthening core county governance systems, including PFM procurement, performance management, and social accountability, and utilizing this work to improve resource management for efficient service delivery in the sectors with Bank-lending operations, including health and agricultural.