By Timothy W. Mwangi – Registered Physical Planner
As a country we have failed to grasp two truisms . First, the symbiotic relationship between Economic Planning and Physical Planning. Second, increased budgetary allocation does not necessary result in positive outcomes. For example for half a century Kenya has ring fenced and allocated a lot of funds to agricultural and livestock sectors. However, this has not resulted in increased output .
The national vision is to transform Kenya into a “newly industrializing, “middle-income country providing a high quality of life to all its citizens by the year 2030”. The recently launched National Spatial Plan (NSP) is a spatial illustration of projects and strategies outlined in Kenya Vision 2030. NSP maps out the major land use areas , identifies potentials in each county, recommends suitable urbanization, industrial and transportation strategies , identifies strategic national and regional development projects and promotes synergy in development objectives between counties. The purpose of the Plan is to: enhance economic efficiency and strengthen global competitiveness, promote balanced regional development for national integration and cohesion, strengthen national economic planning by anchoring national economic policies and coordinate sectoral agencies by providing the spatial expression to sector policies for the period 2015 – 2045.
The Plan analyses the “Kenya Development Problem” and formulates strategies for its solution. Put simply : the focus is on the national spatial temporal development planning issues which must be addressed if the country will move forward as an interrelated whole. If equitable development and improved livelihoods are the ultimate aspiration of Kenyans.
Denmark, Luxembourg , South Korea and Malaysia are widely cited best practices in formulating strategies for economic development including balanced growth. What is the secret of their success? These countries prepare economic development plans and national budgets against the backdrop of a national spatial framework .
The Human Settlements In Kenya : A strategy for Urban and Rural Development (1978) states that in keeping with a 1966 Cabinet resolution, The National Treasury was expected to collaborate closely with the Department of Physical Planning. It is ,commendable that as a young nation Kenya recognized the importance of linking Fiscal Planning to Physical Planning . Unfortunately, national economic planning and preparation of National Budgets has since independence taken the opposite trajectory. The result is the discernable inequality in regional development . Article 204 recognises the fact that development has a spatial temporal dimension. Had we adopted a model that integrates economic and Physical Planning- in the spirit of the 1966 Cabinet Resolution, the national space would today be characterised by equitable development. , NSP should therefore be the basis of formulating national development strategies, medium term plans , Budget Policy Statements and annual budgets.
The 2017 Budget Policy Statement indicates that in FY 2017/18 county governments will receive an aggregate of ksh 299.1 Billion while the National Government ksh 830.08 Billion for development . It is evident that most of the funds for development under the Medium Term Expenditure Framework will be appropriated at the national level. Unfortunately, budgeting process at the national level is yet to demonstrate collaboration between Economic and Physical Planning.
To its credit Parliament in enacting the County Governments Act, 2012 inserted a provision that county governments cannot appropriate public funds outside a planning framework. However, there is no requirement in PFMA to compel the National Treasury to take into account the national spatial framework. Put another way while county governments are bound “ hand and foot” to appropriate public funds on the basis of a planning framework, there is no corresponding statutory requirement for the National Treasury to appropriate funds on the basis of a planning framework . This if not addressed may result in exacerbation of existing inequality in development across counties.
The Public Finance Management Act, 2012 (PFMA) is the principal law in the management of public finances. The objective of the Act is to provide for effective management of public finances by the National and County Governments. Section 25(2) provides that the Policy shall set out the broad strategic priorities and policy goals that will guide the national Government and county Governments in preparing their budgets. The National Spatial Plan which provides a thirty year strategic direction for development is therefore a valuable tool for preparation of Medium Term Plans and annual budgets.
One way of reforming the budgetary process is for Parliament to consider an amendment to Section 25 of the Act by inserting a new sub section that reads “in preparing the Budget Policy Statement, the National Treasury shall take into consideration provisions of the National Spatial Plan”. Such an intervention will ensure that the national budgeting process integrates economic, fiscal, social, environmental and spatial planning. In addition, the intervention will ensure uniformity in budget preparation processes at national and county levels.
The Plan may be utilized in other ways . First, as a basis for the National Assembly to appropriate funds – Articles 95 . Second, as a basis for the Senate to determine allocation of revenue among counties – Articles 96 and 217. Third, as a basis for rational utilization of the Equalization Fund by the National Government . Fourth, as a basis for the Commission of Revenue Allocation to make recommendations concerning the basis for equitable sharing of revenue within the context of the criteria set out in Article 203 (1 ) . Finally, the Plan may enable Parliamentary Investment and Accounts Committees evaluate appropriation of public funds .
If regional balance in economic development is a valuable hanging tapestry, NSP is a critical thread that runs through it; remove the thread and over time the rest of the tapestry will unravel. This would be a tragedy for devolution. Disregarding Spatial Planning in national budget preparation process is akin to jumping off a cliff. Although we cannot mathematically predict the dangers the nation might face, we can safely conclude that the landing will not be a soft one.
Hopefully, with the National Spatial Plan, we shall finally get it right with regard to national economic planning and budgeting.