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.