The Kenyan Constitution (Chapter 12) and the Public Finance Management (PFM) Act provide for the establishment and management of funds by the national government. These funds are crucial for financing government activities, handling emergencies, and promoting equitable development across the country.
1. Consolidated Fund
✔ Established under Article 206 of the Constitution.
✔ Main bank account of the national government.
✔ All money raised or received by or on behalf of the government is deposited into this fund, except for money payable into other specified funds.
✔ Used for government expenditure, including salaries, development projects, and service delivery.
✔ Managed under the Public Finance Management Act.
🔹 Read more about the Consolidated Fund.
2. Contingencies Fund
✔ Established under Article 208 of the Constitution.
✔ Created to cater for urgent and unforeseen expenditure where no budgetary allocation exists.
✔ Managed by the Cabinet Secretary for Finance, who determines if emergency funding is required.
✔ Used for natural disasters, security emergencies, and other unforeseen crises.
✔ Requires Parliamentary approval for withdrawals.
🔹 Read more about the Contingencies Fund.
3. Equalisation Fund
✔ Established under Article 204 of the Constitution.
✔ Funded by 0.5% of total revenue collected by the national government annually.
✔ Objective: To provide basic services (e.g., roads, water, electricity, and healthcare) in marginalized areas to improve equality.
✔ Disbursed based on Auditor-General’s most recent audited revenue accounts, as approved by Parliament.
✔ Managed under the Public Finance Management Act.
🔹 Read more about the Equalisation Fund.
Summary of National Government Funds
| Fund Name | Legal Basis | Purpose | Key Features |
|---|---|---|---|
| Consolidated Fund | Article 206 | Main government bank account | Used for salaries, projects, and services |
| Contingencies Fund | Article 208 | Emergency and unforeseen expenses | Requires approval by the Cabinet Secretary and Parliament |
| Equalisation Fund | Article 204 | Development in marginalized areas | 0.5% of annual revenue for basic services |
Conclusion
The national government manages these funds to support governance, respond to emergencies, and promote equitable development. The Public Finance Management Act ensures transparency and accountability in fund management.
For further details, visit:
Kenya Law – Public Finance Management Act.
