MPs propose major Sh10b increase to Constituency Fund

As the country clamours for the amalgamation of all bursaries as a gateway to the implementation of free education in the country, Members of Parliament are instead pushing for increment of the National Government Constituency Development Fund (NG-CDF).

In a move engineered to retain the control of the bursary billions with the legislators, a draft Bill sponsored by Wajir East MP Aden Mohamed is calling for the increment of the NG-CDF kitty by Sh10 billion.

The National Government Constituency Development Fund (Amendment), 2023 is proposing the upscaling of the funds from a current Sh53.5 billion to Sh63.6 billion.

To achieve this, the Bill proposes an amendment to Section 4 of the NG-CDF Act 2015 by integrating five per cent of the Sports, Arts and Social Development Fund and five per cent of the Universal Service Fund which, if approved, will be additional sources of funds.

In addition, the Bill proposes to enhance the mandate of the NGCDF by introducing a new development project for funding by the Fund under Section 25 of the Principal Act.

“The proposed new project is the construction and provision of communication equipment including masts and voice connectivity which is proposed to be allocated not exceeding five per cent of the total allocation to the constituency in any financial year,” reads the Bill.

According to an analysis by the Parliamentary Budget Office (PBO), the NGCDF kitty will have an increased budgetary allocation of Sh63.625 billion within the first three years of the Bill being enacted. This based on the expected resultant additional funding of Sh689 million within the first year, Sh727 million in the second year and Sh767 million in the third year.

Currently, NGCDF still largely comprises an annual budgetary allocation equivalent to at least 2.5 per cent of all national government share of revenue as provided for in the Division of Revenue Act. Besides, Section 4(1) (b) provides that any monies accruing to or received by the board from any sources also form a source of funds to the NGCDF.

Further, the analysis by the Budget office shows that since its inception, the trend of allocation to the fund has nominally been on an upward trajectory.  The amount allocated to the fund has been increasing steadily, from Sh1.3 billion in 2003 to Sh53.5 billion in 2023/24.

The Universal Service Fund (USF) is established under the Kenya Information and Communication Act 2009 and is administered and managed by the Communication Authority. The purpose of the fund is to bridge the digital and telecommunication access gaps through interventions in the unserved and under-served regions.

While there have been interventions to narrow the voice and digital connectivity divide in the country, data from the Communication Authority shows that a substantial proportion of the local population still faces challenges of connectivity.

Moreover, as at June this year, it is estimated that five per cent of the local population mainly in arid and semi-arid regions lack connectivity.

“Using the actual performance of revenue of Sh2.665 billion into the fund in the financial year 2022/23, in the medium term the fund is projected to generate revenues of Sh2.798 billion, Sh2.937 billion and Sh3.084 billion,” states PBO.

The Sports, Arts and Social Development Fund established under the PFM Regulation, 2018 with its source of the funds majority being proceeds from betting and lotteries. The main purpose of the fund is to support the development and promotion of sports and arts and the promotion of social development, including Universal Health Care (UHC).

There is an established criterion that ring-fences allocations from the fund to the targeted areas. In the last five financial years, the revenue of the fund totaled Sh48.2 billion of which Sh10.4 billion was realised in 2022/23.

“The actual performance of the three funds of the financial year 2022/23 shall be baseline for the projections in the medium term as Sh53.5 billion (NGCDF), Sh2.665 billion (Universal Service Fund) and Sh10.4 billion (The Sports, Arts and Social Fund),” PBO further states.

The development comes amidst the push by a section of leaders, led by National Assembly Speaker Moses Wetang’ula, to ensure equity in education through amalgamation of all bursaries to make education free in the country.

Speaking in Soin-Sigowet constituency, Kericho County on Thursday, Wetang’ula backed the introduction of a Bill to consolidate the bursaries and the setting up of a body to manage the consolidated kitties.

 “As MPs, I will advise and support you we must bridge everything in education in this countr. You cannot pick a child from here, and take them to the same desk as child from Lenana, Kamusinga and Alliance and tell them to compete. They must be given a proper education background so that we bring equity in the education sector, this is what President William Ruto is advocating” said Wetang’ula.

Last month, Wetang’ula directed the clerk of the National Assembly to formulate a new statute. He also asked the Ministry of Education to submit input for proposed legislation on a consolidated approach to bursary allocations.

The new law envisaged by Wetang'ula will amalgamate all bursaries and funds supporting needy students including NG-CDF, HELB loans, NGAAF bursaries, county governments bursaries and the Universities Fund.