When the Kenyan government prepares its annual budget, a significant portion of spending does not go through the usual parliamentary debate and approval process.
Instead, the spending is automatically charged to the Consolidated Fund under Consolidated Fund Services (CFS).
But what exactly is CFS, and where does this money go? Let’s unpack this crucial aspect of Kenya’s public finance system.
Table of Contents Show/Hide
The Consolidated Fund Services (CFS)
Consolidated Fund Services are expenditures that the law mandates and the government must pay. These expenses are charged directly to the Consolidated Fund, as provided in Article 206 of the Constitution of Kenya.
Because these funds are legally obligated, they are not subject to parliamentary debate or approval like other government expenditures.
The recurrent budget estimates include the Consolidated Fund Services. The National Treasury administers the CFS.
Let’s break down the four main areas where CFS funds are allocated.
Repayment of Public Debt
Public debt repayment is the major component of CFS. The government uses it to pay interest and repay the principal on domestic and foreign loans. It also covers repayments for loans guaranteed to parastatals (state-owned companies) in case they fail to repay.
Due to the increase in public debt repayments, and because CFS forms part of non-negotiable funds, the resulting increase in CFS has reduced the funds available for other services.
Pensions and Gratuities
A small portion of CFS also pays pensions to retired civil servants and gratuities to those who previously held public office.
Compensation for Constitutional Office holders
This category includes the salaries and benefits of constitutional office holders such as judges, MPS, commissioners (e.g., IEBC, EACC), and other top constitutional officers like the Auditor-General and Controller of Budget.
Subscriptions to International Organisations
Kenya is a member of many global and regional organisations and pays annual membership fees to remain a member. These include bodies like the United Nations (UN), the African Union (AU), and the East African Community (EAC).
