MP wants Sh10bn more for CDF kitty
Parliament in session.
A draft bill seeks to increase the National Government Constituency Development Fund (NGCDF) allocation by Sh10bn.
The National Government Constituency Development Fund (Amendment), 2023 has proposed an increase from the current Sh53.5 billion to Sh63.6 billion.
The Bill seeks to enhance the allocation by amending Section 4 of the NGCDF Act 2015 by incorporating five percent of the Sports Arts and Social Development Fund and five percent of the Universal Service Fund as additional sources of funds.
It also proposes to hand NGCDF an additional role of funding construction and provision of communication equipment, including masts and voice connectivity.
“The Bill proposes to enhance the mandate of the NGCDF by introducing a new development project for funding by the NGCDF under section 25 of the Principal Act.
The proposed new project is the construction and provision of communication equipment including masts and voice connectivity which is proposed to be allocated not exceeding five percent of the total allocation to the constituency in any financial year,” states the bill.
The Bill is sponsored by Wajir East MP Aden Mohamed. Analysis of the Bill by the Parliamentary Budget Office said NGCDF will have additional funding estimated at Sh689 million, Sh727 million and Sh767 million in the first, second and third years, respectively. This means that by the third year if enacted, NGCDF will have an allocation of Sh63.625 billion.
Currently, NGCDF still largely comprises an annual budgetary allocation equivalent to at least 2.5 percent of all National Government share of revenue as provided in the Division of Revenue Act. Besides, Section 4(1) (b) provides that any monies accruing to or received by the board from any sources also form a source of funds to the NGCDF.
Upward trajectory
According to the Parliamentary Budget Office, since its inception, the trend of allocation to the fund has nominally been on an upward trajectory. The amount allocated to the fund has been increasing steadily from Sh1.3 billion in 2003 to Sh53.5 billion in 2023/24.
The Universal Service Fund (USF) is established under the Kenya Information and Communication Act 2009 and is administered and managed by the Communication Authority.
The purpose of the fund is to bridge the digital and telecommunication access gaps through interventions in the unserved and under-served regions.
While there have been interventions to narrow the voice and digital connectivity divide in the country, data from the Communication Authority shows that a substantial proportion of the local population still faces challenges of connectivity.
As at June this year, it is estimated that five per cent of the local population mainly in arid and semi-arid regions lack connectivity.
Using the actual performance of revenue of Sh2.665 billion into the fund in the financial year 2022/23, in the medium term the fund is projected to generate revenues of Sh2.798 billion, Sh2.937 billion and Sh3.084.
The Sports, Arts and Social Development Fund established under the PFM Regulation, 2018 with its source of the funds majority being proceeds from betting and lotteries.
The main purpose of the fund is to support the development and promotion of sports and arts and the promotion of social development including Universal Health Care (UHC).
There is an established criterion that ring-fences allocations from the fund to the targeted areas.
In the last five financial years, the revenue of the fund totaled Sh48.2 billion of which Sh10.4 billion was realized in 2022/23.
“The actual performance of the three funds of the financial year 2022/23 shall be baseline for the projections in the medium term as Sh53.5 billion (NGCDF), Sh2.665 billion (Universal Service Fund) and Sh10.4 billion (The Sports, Arts and Social Fund),” states the office.
