27 th June, 2016 Analysis: Geoffrey Kerosi NAIROBI CITY COUNTY BUDGET ANALYSIS FY 2016/2017 DEPARTMENT: URBAN RENEWAL AND HOUSING 1. Programme Analysis FY 2015/2016 FY 2016/2017 Rate of Growth % Share of 2015/2016 Budget Share of 2016/2017 Budget Total Budget 130,000,000 398,000,000 206% 100% 100% General Administration & Support 130,000,000 130,000,000 0 100% 32.6633166 Housing Development and Human Settlement 0 198,000,000-0 49.7487437 Building Services 0 70,000,000-0 17.5879397 Table 1: Budget Analysis of Programs under the Urban Renewal and Housing Programme The Table 1 above shows the analysis of all the programmes under the Urban Renewal and Housing Department of Nairobi City County (NCC). Using the above calculations it
is clear that NCC puts a lot of priority on Human Development and Human Settlement Programme with 49% of the funds going to the programme. It seems that there was some re-organization in the department considering that in FY 2015/2016 some programs under this department were non-existent (Building Services and Housing Development & Human Settlement). This is not a good practice because it makes is difficult or impossible to compare budgeting for sub-programs from one year to another. The Budgetary Allocation for General Administration and support has remained constant for the two financial years (Ksh. 130 million). Data shows that most of the money in the department will be spent by the Housing Development and Human Settlement Sub-Program. Let us now find out what is driving these choices and how the money will be spent (recurrent and expenditure). 2. What is driving these Choices? The narrative does not expressly explain why most of money has been allocated towards management of rental housing. They have given a blanket statement as quoted below: Provide affordable and adequate housing within the county estates and ensure maintenance of the same in good condition. From the scarce information, it seems that the county has prioritized the renovation of the existing public housing. Looking at the indicators and targets, it is mentioned that Bill of Quantities for Buruburu Estate is ready. Urban renewal will get the balance (39.3%) to setup new buildings in some estates in Eastlands. The NCC is planning to demolish some old buildings and set new ones in their place. 3. Sub-Program Breakdown We will now focus our attention on the Sub-Programs under the Housing Development and Human Settlement Programme. This is where most of the money went. What do we expect? Will the County build more houses for the residents? We will found out soon! Note: SP means sub-programs.
Housing Programme Development & Human Settlement FY 2015/2016 FY 2016/2017 % share of the Program SP1 Urban Renewal 0 78,000,000 39.39393939 SP2 Management of Rental Housing 0 120,000,000 60.60606061 Total Budget for the Program 198,000,000 100% The analysis in table 2 above shows that most of the money will be spent on Management of Rental Housing (60.6%). On the other hand Urban Renewal will spend the balance (39.4% of the total programme budget). 4. Additional Analysis (Economic Classification of the Sub-Program) The economic classifications section of the budget will reveal to us whether most of the money is going to recurrent or development expenditure. Out of the total recurrent expenditure Ksh. 83.3 Million will be Compensation for Employees while Ksh. 126 Million will be spent on purchase of goods and services. Out of the Ksh. 188 capital expenditure for the department, Ksh. 108 Million will be spent on acquisition of capital assets while Ksh. 80 million will be used for other development. The payroll services have been centralized under the General Administration and Support. This item has a budget of Ksh. 83.3 Million as shown above.
Table 3: Economic Classification for Urban Renewal Sub-Program Under the department of Urban Renewal and Housing a total of Ksh. 210 million will be recurrent expenditure while Ksh. 188 Million will be capital expenditure. The Housing Development and Human Settlement Sub-Program (with a total budget of Ksh 78 million) will spend Ksh. 10 Million on goods and services. The remaining Ksh. 68 Million will be spent on other development (undefined). 5. What do we learn from the indicators and Targets section? The indicators should highlight the key activities that the sub-program will undertake, and the targets should point to what the sub-program will seek to achieve in the coming year and the next two years after that. Let us find out what the department has to offer in this section:
Table 4: Performance indicators and targets for Housing Development and Human Settlement The Key Performance here is Renewed Estates and targets for FY 2016/17 are Demolishing old Buildings and start of new Constructions. It looks like the NCC will spent most of FY 2016/2017 demolishing buildings but there is no specific target. How many buildings will be demolished? Is this a good idea for the county to spend a whole year demolishing and not replacing the demolished houses? Residents would want to know the number of building to be demolished and location if possible. How many new buildings are to be constructed in FY 2016/2017? From Table 4 above there is no target (FY 2016/2016) under SP2 Management of Rental Housing. Does this mean that there is nothing that will be done in FY 2016/2017 despite the fact that the sub-program was allocated Ksh. 120 million? Recommendations a) More funds should be allocated towards setting up new housing units in order to provide affordable housing units to the NCC residents. Other statistics show that demand for housing outstrips supply. Countrywide, there is a demand of 150,000 housing units in urban areas per year. Supply stands at 35,000 units. A lot needs to be done. 1 1 DfID Rural Infrastructure in Sub-Saharan Africa: Nairobi Case Study Report 2015.
b) The County should always set clear indicators and targets for all programs and Sub-Programs. If done that way, it will aid the oversight process by the County Assembly and the public. c) For safety of urban residents, the NCC should put a lot of emphasis on their Development Control Section to ensure that all construction permits are issued without any compromise whatsoever. This will minimize cases of buildings which might collapse anytime. For more information on our work, visit our website: http://www.hakijamii.com/