Supreme Court: CDF is unconstitutional

The Supreme Court has dealt members of the National Assembly a huge blow by nullifying the Constituency Development Fund (CDF) Act (2013), which significantly reduces their influence in allocation of resources.

A five-judge bench led by Chief Justice Martha Koome has ruled that the CDF Act is unlawful for violating the principle of separation of powers between the county and national governments. 

In a ruling that limits MPs’ role to legislation, the court has also found that the Act is unconstitutional on account of procedural lapses for failing to involve the Senate in its enactment.

The judges say the constituency as conceptualised in the 2010 Constitution is tied to political representation and not service delivery. 

“In its true essence, a constituency is a form of territorial districting that defines how voters are grouped for the election of Members of Parliament and are not conceptually envisaged to be service delivery units. 

“This leads to an ineluctable conclusion that the role that a constituency as an electoral unit discharges and its place within the constitutional scheme is tied to the functions constitutionally vested in the Member of the National Assembly. That role is a legislative role and not a service delivery mandate,” says the court. 

The constituency, under the constitutional scheme, is tied to the election of representatives to the legislature and representation of the people at the National Assembly.

In a judgment that could see MPs lose grassroots political influence to governors, the court has ruled that the CDF Act is illegal for usurping county functions and distorting division of revenue. 

“The CDF Act 2013 offends the division of functions between the national and county governments, offends constitutional principles on the division of revenue. The CDF Act 2013 offends constitutional principles on public finance and offends the constitutional principle of separation of powers,” says the court. 

At stake is the control of more than Sh50 billion that MPs are expecting to be allocated to the CDF by the Treasury from the national government’s ordinary revenue in the current financial year. 

The national fund consists of monies of an amount not less than 2.5 per cent of all the national government ordinary revenue collected every financial year.

“It is clear that the Constitution does not grant the National Assembly the power to implement projects as a service delivery unit at the county level. Members of the National Assembly are granted the mandate to legislate and oversight the national revenue and its expenditure,” states the ruling.

It makes reference to Article Article 95 of the Constitution which provides for the roles of the National Assembly.

Since CDF targets “community-based” and “local projects”, the judges say a look at the Fourth Schedule of the Constitution that distributes functions between the national government and the county governments, shows that it is the county governments that are allocated most of the functions and powers that can be said to be “community” or “local” in orientation.

Examples of such functions and powers include those relating to county health services, county transport, trade development, county public works and services, pre-primary education, and village polytechnics, among others. The functions and powers of the national government with respect to most of these functions relate to policy formulation. 

“It follows and we so find that the implementation of community-based projects envisaged under Section 22 and the infrastructural development projects envisaged under Section 3 of the CDF Act 2013 would inevitably cover and target the functions assigned to county governments,” say the judges. 

By straying into functional areas assigned to county governments, the CDF Act 2013 violates the division of power between the two levels of government as provided for under the Constitution.

They say although the Constitution provides that a national state organ, national agencies and institutions and county governments will decentralise their functions to ensure reasonable access to their services, that is not a license to create a “third” or “parallel” level of government as done by the CDF Act 2013 at the constituency. 

“Decentralisation of service delivery must be undertaken within the confines of the structures of the national government or county governments, not parallel to these two levels of government,” states the ruling. 

“Therefore, we see a “third” or “parallel” structure of government as altering the basic premises of the system of government created by the Constitution and as distorting the devolved structure of government. 

“This is more so in a context such as the CDF Fund which has the effect of creating structures that are incompatible with the nature of the distribution of functions between the two levels of government.”

Other than the CJ, the other judges were Deputy Chief Justice Philomena Mwilu, Justices Smokin Wanjala, Njoki Ndung’u and William Ouko. Two civil society groups, The Institute for Social Accountability (Tisa) and the Centre for Enhancing Democracy and Good governance, had moved to the apex court to challenge the CDF Act. 

The dispute started at the High Court in 2013. 

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