Senior Management

The Government recognized that the Budget Rationalization Programme could not by itself achieve the higher level of strategic investment planning. The strategic investment planning was expected to be the basis of the forward and Annual Budget exercises. GoK therefore introduced the Public Investment Programme (PIP). The main rationale for introducing the PIP was to strengthen the forward budget by providing a more comprehensive instrument for planning and prioritization of public expenditures.
PIP had six major objectives which were:
  Strengthen the project cycle, namely the identification, design, appraisal, implementation, monitoring and evaluation of projects;It was to become an instrument of economic management used to monitor public sector capital formation targets, and to ensure that sectoral strategies are translated into projects and programmes;Become a tool for better aid coordination to assist in the matching of Government investment needs with donor financing opportunities Strengthen overall public expenditure management by sharpening departmental priorities, improving the phasing of projects and relating their total implementation costs and subsequent operating costs to recurrent and development ceilings Be used to monitor the investment plans of state corporations that may directly or indirectly impinge on the government finances and
   To allow accurate forecasting of future recurrent expenditure demands on financial resources. Development partners played a key role in the introduction of the PIP as they also provided technical assistance for the implementation and institutionalisation of the exercise into the budgeting process. By 1994 some progress had been made as the PIP was now being coordinated by the Ministry of Planning and National Development and the annual timetable had incorporated PIP as a key input to the annual budget and in this way it was able to influence the budget exercise. However despite all these improvements the major weaknesses in budgeting for capital investments continued as the completion rate of programmes was as low as 3%. Many projects had stalled some as complete as 90% and this applied not only to government funded projects but also to donor funded programmes. These projects had also generated pending bills whose deficit on a commitment basis had gone up as the hard budget constraint translated into informal funding.