Budgetary process: Exploring the role and effectiveness of Sector Working Groups

  • 18 Sep 2023
  • 3 Mins Read
  • 〜 by Brian Otieno

Prof. Njuguna Ndung’u, the Cabinet Secretary, National Treasury, set in motion the budget process for the financial year 2024/2025 on 18th August 2023, when he launched the Medium-Term Budget Preparation process. During the launch, Prof. Ndung’u indicated that sector working groups needed to begin their deliberations and align their priorities with the prevailing economic realities. The fundamental question therefore begs as what exactly is a Sector Working Group (SWG) and how effective are they in budgetary processes?

Kenya’s budgetary process begins by the distribution of budgetary allocations at the sector level. These allocations are then moved to the sector level where upon deliberations, the approved allocations are finalised at the ministry, programme, and sub-programme levels.

Proposals for distribution in every sector are normally outlined in the Budget Review and Outlook Paper (BROP), normally released in October or November. The proposals for each sector as indicated in the BROP are then finalised in the Budget Policy Statement (BPS), which is submitted for approval in Parliament in March. Once this is done, the budgetary estimates, containing ministry, programme, and sub-programme details, are submitted for parliamentary approval in April.

In between, the BROP and the BPS, there lies a process of deliberation, review and adjusting of sector proposals. This review is carried out by Sector Working Groups. SWGs are a critical player in the country’s budgetary process performing the following functions:

  1. Facilitation of government coordination around the budget, acting as a platform for negotiation over budgetary priorities.
  2. Serves as the main mechanism for engagement with the public on sector priorities. Discussions between government agencies and non-state actors operating within the set sectors occur here, more so on the identification of budget priorities for the intervening period.

Currently, Kenya has 10 SWGs contextually designed under the UN-classification of the functions of government (COFOG). They include sectors domiciled under the Health, Education, Governance, Justice, Law, and Order (GJLO), Social Protection, Culture and Recreation, Agriculture, Rural and Urban Development (ARUD) dockets, among others.

Sector Working Groups are composed of different stakeholders who are drawn from the relevant sectors falling in each group. For instance, the Sector Working Group on Education would draw membership from the Ministry of Education, the Kenya Institute of Curriculum Development (KICD), the Kenya National Examinations Council (KNEC), the Teachers Service Commission (TSC) among others. Each stakeholder within a sector working group is required to articulate their priorities for the financial year and lobby for allocation and seek support from other stakeholders within the sector working group. Additionally, donor agencies and private sector representation is also allowed in sector working groups, based on a 2019 Circular from the National Treasury.

Based on the composition posited above, it is indeed indicative of a strong involvement of stakeholders. That notwithstanding, Kenya’s budget is still far from being foolproof from unnecessary projects that eventually result in wastages. Consequently, there is a need to probe the place of the sector working group in the country’s budgetary process and how effective they are in achieving the principles of Public Finance as per Chapter 12 of the Constitution.

While the membership is quite elaborate, what is still unclear is how stakeholders become members, or rather the process of being part of a sector working group. The concerns around the level of taxpayer involvement at this critical decision-making stage, whether private sector representation is geared towards business interests or taxpayers’ interest, and the possibility to open up the sector working groups to wider stakeholder reach, will arise.

Basing this on the national values and principles as espoused in Article 10, the principles of public finance management as per Article 201, and the cardinal concept of public participation and involvement in every process of governance, it is fundamental that this is reviewed going forward. This is to ensure that the budgetary planning framework is clear and does not lock out key stakeholders in such a fundamental part of the country’s budgetary process.

As the country pursues budget transparency, equality, and equity in resource allocation for efficiency and prudent use of national resources, whilst also seeking to weed out graft, it is fundamental that the design and structure of sector working groups, at both levels of government, is reviewed with an aim of adhering to Article 201 of the Constitution. 

The budgetary formulation stage is as important as the budget itself!