H.E. President Uhuru Kenyatta today chaired the 2nd Cabinet Meeting this year at State House, Nairobi, Where the following policies were discussed and approved by the Cabinet for tabling in Parliament:

(i) Budget Policy Paper

Cabinet noted and appreciated the grant of a facility by the IMF that will cushion the country from possible shocks arising from activities in the Global Economy which remains sluggish.  Cabinet further noted that inflation has remained within target at 5.5% and is expected to drop to 5% in the course of the year.

The focus of resource allocation will be Infrastructure Development, Human Capital Development/Education, Environment and the Youth. The policy further targets completion of ongoing projects and strategic interventions in National Security and the Environment.

Division of Revenue Bill and County Allocation Bill 2015/2016 Financial Year

These seek to increase allocation to Counties from the current 228 Billion to KShs.248Billion on equitable share basis.  Besides these allocations other funds earmarked to go to Counties include conditional grants amounting to KShs.4.6Billion towards support for Maternal Health care.  KShs.4.5Billion earmarked for leasing of Medical equipment, another KShs.4.5Billion to support level five hospitals and 3.3Billion for  Road Maintenance.

(ii)  The Public Finance Management (Equalization Fund  Guidelines, 2014)

The Constitution under Article 204 establishes the equalization fund for purpose of providing basic services such as water, roads, health facilities and electricity to marginalized areas to the extent necessary to bring the quality of those services to the level generally enjoyed by the rest of the country.

Under the guidelines an advisory Board will be created to advice on how these funds will be allocated.  In the financial year 2015/2016 a total of KShs.6Billion will be allocated to priority programmes across the country.

(iii)The Public Finance Management (Affirmative Action Social Development Fund) Regulations, 2014

This fund has been established with the purpose of empowering women, the youth and persons with disabilities. The regulations will make provisions for specifying the source of funds. Establish an equalization fund board to advice the cabinet Secretary on the proper and effective performance of the fund, withdrawal rules from the fund and the winding up of the fund.  The equalization fund will compliment other efforts of the National Government to accelerate achievement of Vision 2030 and other National Development objectives.

(iv) Public Finance Management Regulation for National andCounty Governments [Public Finance Management (National Government) Regulations, 2014 and Public Finance Management (County Governments) Regulations, 2014]


The development of the Public Finance Management Regulation for

National and County Governments was guided by the considerations to ensure financial autonomy of National and County Government within a unitary system of the Government.

(V)            LAPSSET PROJECT


Cabinet directed that compensation for LAPSSET project be financed by the end of February, 2015, so that the project commences immediately thereafter.

Cabinet also approved the hosting of the 12th African Fine Coffee Conference and Exhibition in Kenya from 12th to 14thFebruary, 2015.  The theme of the Conference is “Sustainable Resurgence of the African Coffee Industry”. Cabinet also approved in July, 2015 the Global Entrepreneurship Conference. This Conference will be co-hosted by Kenya and USA, and will bring together investors from the USA and across the Globe.  The Conference will therefore be a great opportunity for Kenya to showcase the various avenues, opportunities and possibilities available for investors in the country.



5TH February, 2015