H.E. THE GOVENOR'S SPEECH DELIVERED BY HON. DR.

EVANS KIDERO, DURING THE 1ST STAKEHOLDERS CONFERENCE, CHARTER HALL, WEDNESDAY 24TH APRIL, 2013. Fellow residents and stakeholders in the management of Nairobi The Hon. Speaker of the Nairobi City County Assembly Hon. Members of the Nairobi City County County officials Media reps. Ladies and Gentlemen,

It is a great pleasure to stand before you during this 1 st Stakeholders Forum so that, in line with the participatory mode of governance that our government subscribes to I may table before you how I intend to run this City. The structure of the County Government will be comprised of 11 sectors as follows:1. Governors office 2. Trade, Corporations and Tourism 3. Environment 4. Health 5. Agriculture 6. Education 7. Public Roads and Transport 8. Planning, Land and Housing 9. Water Sanitation and Energy 10. Public Service Management 11. Finance The County government as you all know has been mandated with the provision of the services and these will be delivered in the format that I have just enumerated above. You are aware that provision of services needs a budget. The County has already prepared a budget in compliance with the Constitution and the Public Finance Management Act of 2012. Although we will present our budget to you in June, it is important that I share with you the outline that will be presented to you then. The Nairobi City County budget for the year 2013 2014 will be Kshs.31.5 billion. Of this total, Kshs.14.6 billion will be raised from internal sources within the County while Kshs.16.9 billion will be catered for by transfers from the National Treasury. The internal sources will tap from Rates, Single Business Permits, Billboards, Parking and so on in the following amounts and ratios.

SOURCES RATES SINGLE BUSINESS PERMITS BILLBOARD AND ADVERTS BUILDING PERMITS CAR PARK OTHER REVENUE SOURCES CENTRAL TRANSFERS TOTAL

AMOUNT (KSHS. BILLIONS) 4.3 1.6 0.8 2.8 1.9 3.2 16.9 31.5

PERCENTAGE CONTRIBUTION (%) 14 5 3 9 6 10 53 100

These are the traditional sources from which the defunct City Council of Nairobi has always relied to raise revenue. These sources have proved inadequate, unreliable and with an expanded mandate, the County Government needs to come up with innovative and progressive sources of revenue. We are in the process of engaging expert input into this exercise. It is however, government policy that this exercise be subjected not only to public participation but scrutiny. As we present these proposals to you, it will be important that you take note, interrogate the presentation and where necessary come up with your input. We will welcome and incorporate residents' contributions into the formulation of our budgets and running of the County in general. It is not enough to just table to you our sources of revenues. We must follow this up by equally tabling how we intend to spend these resources. The picture of expenditure that raises its head at the national level also presents itself at the Nairobi City County level. Of the Kshs.31.5 billion that the County kitty intends to raise, Kshs.9.5 billion or 30% of this will go to personnel emoluments; Kshs.4.8 billion or 15% will be spent on operations; Kshs.5.7 billion or an equivalent of 19% will be used to repay debts incurred by our predecessors; capital expenditure will cost Kshs.9.6 billion or 31% of the County budget. This high expenditure on staff calls for a serious thought. I have been told that this has been occasioned by a recent CBA that raised the salaries by 45% bringing the monthly wage bill to Kshs.800 million from the previous Kshs.550 million. These pay-offs were back-dated to been to September, 2012 and are yet to be honoured. At this juncture, it is important that I address your attention to the wastefulness that has come to be associated with public procurement systems. The Public Procurement and Disposal Act is very clear on what is supposed to be done while procuring goods and services for public bodies. More often than not, public officials always invent ways to circumvent these guidelines and end up wasting a lot of public resources. I wish to commit myself before you that I will try as much as possible to plug these loopholes that these officials employ in order to curb the wanton wastefulness. 2

You will agree with me that this is a plague that has inflicted our society for so long and not one single hand or effort can effectively eradicate it. I will need to enlist the help of each and every one of you as whistleblowers to help eliminate the vice, once and for all, from our society. It will be incumbent upon each and every resident of this County to report any cases of impropriety to the authorities for action. I will ensure that your concerns are acted upon immediately and are kept as confidential as possible to shield you from possible retaliation. I also wish to make a few comments about personnel emoluments. It is an internationally accepted paradigm that for a public body to be sustainable, it should only spend not more than 20% of its income on personnel emoluments. Any figure upwards of this, eats into resources that are required for use to meet the objective of that organization. To address this anomaly, we will need to intensify our revenue collection to take care of these alarming figures or to rationalize and restructure our workforce. It will not suffice to incorporate the scourge of rampant corruption and pilferage of County resources under this theme. Then there is the monster of outstanding debts that the County has to grapple with. As mentioned earlier, these debts stand at a colossal Kshs.33.9 billion todate. Half of these were loans amounting to Kshs.15 billion which were borrowed to put up water infrastructure. Then there is Local Government Loan Authority (LGLA) (Kshs.3.8 billion), Statutory debts (Kshs.5 million). Other creditors (Kshs.2 billion); LAPTRUST also claims an actuarial deficit of Kshs.3 billion which is being contested by the County; Equity Bank (Kshs.3.7 billion), Co-op, Bank (Kshs.0.4 billion). Out of all these the Council intends to liquidate Kshs.5.7 billion in the Financial Year 2013 2014. The County is equally owed a staggering Kshs 51.3 Billion among five others GOK Rates (KShs.1.8 Billion) DOD ( Kshs. 33Billion) Private Land arrears ( Kshs. 13.1 Billion) Kenya Power ( Kshs. 0.497 Billion) and Others( Kshs 2.9 Billion) Under optimal budgetary conditions, 60% of our income is supposed to be used on capital development. The Nairobi City County only manages half of this projection. What this means is that, we have reserved less funds for development. We are thus not able to serve residents of this city as expected and something must be done. Soon I will be presenting before the County Assembly various bills to address the anomalies. All along, as we embark on this journey of reclaiming the City of Nairobi, I will count on your co-operation and support in order to succeed.

Capital projects budgetary allocation will be distributed as follows:AMOUNT (KSHS) MILLIONS

607

SECTOR

PROJECTS REHABILITATION OF PUMWANI MATERNITY HOSPITAL... CITY MORTUARY ...................................................................... .....

PUBLIC HEALTH

REHABILITATION OF HEALTH CENTRES WITHIN THE COUNTY ................................................................... ......... COUNTY DEVELOPMENT PROJECTS..................................
Sub Total

653 253.5 340

1853.5

PUBLIC WORKS AND INFRASTRUCTURE

ENVIRONMENT WATER AND SANITATION

MAINTENANCE OF ROADS AND DRAINAGE SYSTEMS AND STREET LIGHTING ..................................... COUNTY DEVELOPMENT PROJECTS ................................. INFRASTRUCTURE EQUIPMENT ......................................... Sub Total SOLID WASTE MANAGEMENT ............................................ SOLID WASTE VEHICLES ...................................................... Sub Total
PLANNING ........................................................................ ................. HOUSING DEVELOPMENT ............................................................ VALUATION ROLL ........................................................................... Sub Total COUNTY ASSEMBLY AND EXECUTIVE .. INSPECTORATE..

3,124 850 400 4374 224 400 724

170 55

PLANNING DEVELOPMENT HOUSING AND LANDS

400
625 180 178

GOVERNOR'S OFFICE

ICT.
Sub Total REHABILITATION OF LEARNING INSTITUTIONS................ SOCIAL SERVICES ......................................................................... . COUNTY DEVELOPMENT PROJECTS .......................................

465
823 107 107 340

EDUCATION, CULTURE AND SOCIAL SERVICES

554 PUBLIC SERVICE MANAGEMENT HUMAN RESOURCE Sub Total TREASURY ....................................................................... ................ PROCUREMENT ................................................................ ............. ADMINSTRATION .............................................................. ........... FLEET .............................................................................. ................. COUNTY MEDIA SERVICES ........................................................ Sub Total REHABILITATION OF MARKETS COUNTY DEVELOPMENT PROJECTS Sub Total TOTAL 5 5

FINANCE AND ECONOMIC PLANNING

18 17 87.5 200 121

4435 810 170 980 9551

TRADE AND ENTERPRISE DEVELOPMENT

As mentioned earlier, expenditure on Operations will consume 15% or 4.8 billion of our total expenditure disbursed as follows:SOURCE KSHS(MILLIONS) REMARKS ADEQUATE TO CATER FOR 4YEARS SECONDARY EDUCATION FOR THE NEEDY CASES CATER FOR 60 NUMBER OF HEALTH CLINICS WITHIN THE COUNTY CONTRACTED SERVICE PROVIDERS TO COLLECT SOLID WASTE OUTSIDE THE CBD COST OF STREETLIGHTING

BURSARIES

200

DRUGS

320

SOLID WASTE MANAGEMENT

520

STREET LIGHTING

300

FUEL

150

FLEET MANAGEMENT

As the County Government takes charge of the county , it has been confronted by various challenges ranging from inherited debts from the former City Council, poor maintenance of infrastructure , failure by National Government to honour financial obligation (e.g CILOR, Way-leave and loading zones) and non tax compliance by citizens (e.g house rents, market cess and property rates). In addition to the above, the fees and charges continue to be below the prevailing market rates as a result of resistance by the citizens and politicians.

As we embark on this journey of discharging services to residents of Nairobi, I would like to appeal for your understanding and support that will see the revision of rates, fees and charges to reflect the present socio-economic realities. Most cities of the world, raise the bulk of their revenues from levying land rates. It is unfortunate that in Nairobi, the largest debts are rates defaulters. On several occasions, when new valuation rolls have been prepared, they have never seen the light of the day because of resistance and interference from various quarters, the most prominent being property owners and politicians, the latter purporting to speak for and protect their people.

This time round, it is my humble request to all residents of Nairobi especially the property owners and politicians to support the preparation and adoption of the new valuation roll to reflect the realities of the times. After this is done, we will be able to raise enough funds to provide services to you and improve this city in line with our pre-election dream.

THANK YOU AND GOD BLESS