This first edition of the County Budget Review and Outlook Paper(CBROP), prepared by the County Treasury, outlines the progressmade by the Nyandarua County government since taking office inMarch 2013. The CBROP highlights key challenges facing thecounty as it plans and implements the development priorities. TheCBROP takes a critical look at the underlying economic issues andproposes various options that should guide the process of budgetformulation for the 2014/15 Financial Year.Prudent financial management in the county will be determined byachieving a balance between developing institutions and investingin productive sectors. Importantly, the pace at which the countyshall adhere to fiscal discipline amid the high recurrent expenditureexpected to be incurred in the 2013/14 financial year in setting upcounty systems remains a crucial factor in determining the pace offuture growth of the country. In addition, the huge recurrent relatedexpenses especially on wage bill will continue to be a majorchallenge as the implementation of devolved system of governancesets in. Therefore, the countys growth trajectory will largely dependon how fast programme based budget is implemented as well ashow quickly people and business get to full capacity and produce atoptimum levels.The 2014/15 budget for Nyandarua County must therefore strike adelicate balance of prioritizing critical expenditure subject toresource constraints; promoting the functionality of the devolvedsystem of government to spur economic growth and enhancingpoverty reduction and employment creation.Nationally, according to the monetary policy committee the centralbank rate have been retained at 8.5% to encourage further growthacross the economy. The coordination between monetary policy andsupportive growth oriented fiscal policy continues to generateinflation and exchange rate stability, increased capital flows andimproved environment for financial intermediation this will have aripple effect on the county economy.4This County Budget Review and Outlook Paper has three mainmessages. Rationalize and prioritize expenditure; enhance revenuecollection; and drive growth through targeted high return spending.The policy options for consideration in the 2014/15 budget and themedium term plan are also outlined.

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