Background

Since independence, the Government has undertaken various public financial management reform initiatives. The Strategy for the Revitalization of Public Financial management System in Kenya played a prominent role in guiding reforms in the PFM Sector and also building on the institutional transformation from 2006-2011. Key areas were targeted for reform including transformation of political priorities into annual budget allocations; credibility of budget; roll out of the Integrated Financial Management Information System (IFMIS)  and quality, timeliness and accuracy of financial reports.  The Government of Kenya (GoK) and Development Partners supported the implementation of the Strategy for PFM Reforms under a collaborative Memorandum of Understanding, which provided for bilateral direct support and a joint funding arrangement.

In addition to the Ministry of Finance on behalf of the GoK, key Development Partners who supported the strategy implementation included Canadian Development International Agency (CIDA), Embassy of Sweden, Embassy of Denmark (Danida), IDA, Norway; while key bilateral partners were USAID and GIZ.

With the expiry of the previous strategy coinciding with the implementation of the rich reform agenda prescribed in the Constitution, the impetus for improving governance structures and entrenching reforms became an immediate priority.  Chapter 12 of the Constitution envisages the development and implementation of a wide range of legal and institutional reforms. These include enactment of key legislation such as the Public Finance Management Act 2012, the reorganization of existing institutions (National Treasury) and establishment of new PFM institutions (Commission on Revenue Allocation, the Controller of Budget and the Transitional Authority). The National Treasury, through the Public Financial Management Reform Secretariat, is the champion of the PFM reform initiatives.