## _cr07160 - 21. A national health strategic plan has been completed. This plan is expected to form

## Source details

**Canonical URL:** [_cr07160 - 21. A national health strategic plan has been completed. This plan is expected to form](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07160.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07160.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07160.pdf.json)

---

### 1. Kenya’s Investment Programme for the Economic Recovery Strategy for Wealth and Employment Creation (IP-ERS) 2003–2007 — Background and reporting process
- IP-ERS (PRSP) launched in March 2004.
- Joint Staff Assessment discussed by World Bank and IMF Executive Boards on May 6 and May 10, 2004.
- Government submitted first IP-ERS Annual Progress Report (APR) for 2003/04 (July/June) in July 2005 and a second APR covering 2004/05 in September 2006; this JSAN covers both APRs.
- APR preparation was participatory: government officials, heads of parastatals, civil society, universities, research institutes, private sector, and development partners engaged in workshops and consultative forums.
- Both APRs were discussed at a government workshop (March 2005), the Consultative Group meeting (April 2005), a parliamentary subcommittee, and cabinet; comments were reflected in final reports.
- Both reports posted on the monitoring and evaluation department’s website within the Ministry of Planning.

### 2. Monitoring and evaluation — findings and recommendations
- Progress reports address key Joint Staff Assessment recommendations:
  - Strengthening poverty analysis via data collection for the Kenya integrated household budget survey, the fourth participatory poverty assessment, and poverty and social impact analyses; these support a comprehensive poverty assessment expected to be completed during 2007.
  - Coverage of implementation of public financial management reforms.
  - Improvements in budget preparation and execution, including an expanded preparation timetable since 2004/05 leading to better prioritization.
  - Identification of capacity-building actions and envisaged donor support.
  - Efforts to strengthen systems for monitoring economic growth and poverty through administrative and survey data collection and development of methodologies.
- Constraints and recommendations:
  - Delays in issuing APRs limit usefulness: reports come too late to feed into the next budget and do not address emerging major challenges such as (i) continued public concern about corruption (findings of NEPAD and other reports), (ii) impact of higher global oil prices, (iii) persistent delays in donor budget support.
  - Revisions in IP-ERS indicator targets require clearer explanation, including harmonization of common external tariffs within the EAC Customs Union.
  - Second APR improves by drawing more on domestic policy documents and presents improved information on real GDP growth, core poverty spending, a strategy on domestic borrowing, inflows of grants, and costs of restructuring parastatals.
  - Staffs recommend future reports:
    - Draw more on the medium-term budget strategy paper to assess links between expenditure allocation plans and IP-ERS priorities.
    - Rely less on survey data and more on existing administrative data sources.
    - Track resource allocations and expenditures and monitor results of surveys/censuses and analytical activities.
    - Strengthen Central Bureau of Statistics and statistical offices of line ministries; create strong linkages between the monitoring and evaluation department and the Statistical Capacity Building Project.
    - Passage of the freedom of information act and development of a communications strategy to improve information flow to citizens.

### 3. Policies to stimulate growth — macroeconomic and structural observations
- Recent growth performance (revised national accounts, 1993 SNA basis):
  - 3.0 percent in 2003,
  - 4.9 percent in 2004,
  - 5.8 percent in 2005,
  - expected to exceed 6 percent in 2006.
- Staffs note growth remains too low to meet MDG poverty reduction targets; recommend maintaining macroeconomic stability and accelerating structural reforms to address high costs of doing business (corruption, weak judiciary, insecurity), poor quality and efficiency of infrastructure services, and excessive regulatory activities.
- Fiscal policy:
  - Prudent fiscal policy is key, particularly before elections.
  - Staffs welcome discussion on fiscal strategy and objective to reduce domestic debt to maintain fiscal sustainability.
  - Future reports should discuss consistency of medium-term budget strategies with debt sustainability.
- Public investment and expenditure management:
  - Public investment of only 3.2 percent of GDP (2003/04 report) cannot sustain strong growth.
  - Government increased infrastructure allocation in 2006/07 budget and has taken steps to contain unproductive expenditure.
  - Spending rigidities remain; need to improve wage bill management and implement new pay policy.
  - Absorptive capacity constraints in infrastructure ministries led to significant under-spending in development budgets; causes include weaknesses in donor fund management, procurement and accounting procedures, and investment planning.
  - Staffs urge enactment and consistent implementation of the 2005 procurement act with prompt operationalization of the Public Procurement and Oversight Authority.
- Revenue and customs:
  - Customs reforms need revitalization now that the EAC customs union is in place and a new IT system established.
  - APRs discuss expanding the tax base but could better balance discussion of tax incentives and exemptions and their distortionary potential (as seen in the 2006/07 budget).
  - Next reports could discuss progress with harmonizing tax incentives within the EAC.
- Public Expenditure Management (PEM):
  - PEM identified as key to achieving IP-ERS targets and strengthening governance.
  - Most PEM-APP benchmarks: 10 out of 16 are still to be met.
  - Reforms lag in fiscal transparency, IFMIS implementation, management of contingent liabilities, and legal framework.
  - Full IFMIS implementation will provide significant benefits.
  - Second APR lists needed actions: regular public expenditure tracking surveys, introduction of a risk-based audit system.
  - Donor coordination improving in context of government’s revitalized public financial management strategy launched June 2006; planned support includes a US$115 million multi-donor basket fund.
  - Fiscal reporting and performance budgeting should be enhanced to strengthen links between policy and budget allocations.
- Monetary policy:
  - APRs need stronger analysis of monetary policy.
  - 2003/04 report limited analysis to a narrow underlying inflation measure (excluding food, energy, transportation) and credit to private sector, failing to recognize risks from subsequent sharp credit growth and inflation.
  - 2004/05 report acknowledges headline inflation rise due to oil and food prices but should also recognize impact of loose 2003/04 monetary stance that resulted in highly negative real short-term interest rates.
  - Future reports should provide candid, up-to-date analysis of monetary performance and how to strengthen monetary operations.
- External competitiveness and trade:
  - More attention needed on competitiveness in light of Kenyan shilling appreciation and recent inflation increases.
  - Trade reform priorities:
    - Kenya implementing three-tiered EAC common external tariff (0, 10, and 25 percent).
    - Need to develop a trade strategy with EAC partners to lower trade barriers against the rest of the world and derive efficiency gains.
    - Authorities encouraged to work with EAC partners to further reduce the maximum common external tariff, with no exceptions, by 2010.
    - Remove non-tariff barriers (notably road blocks and checkpoints).
    - Complement actions with WTO efforts to gain greater market access for Kenyan exports.
    - Identify measures to address adjustment costs from trade liberalization, including revenue losses.
    - Strengthen reporting on progress in regional integration in COMESA and EAC and rationalize regional trade arrangements in context of economic partnership agreements with the EU.

### 4. Structural reforms, financial sector, investment climate
- Infrastructure and parastatals:
  - Reforms acknowledged: concessioning of railways, restructuring commencement of Telkom Kenya, increased competition in telecommunications, management contract for Kenya Power and Light Company.
  - Government intention (2006/07 budget speech) to introduce private sector participation in Mombasa container terminal operations is welcomed.
  - Many reforms remain at study/strategy/action-plan stage; enactment of the Privatization Act is welcome and establishment of a privatization commission under the Act should facilitate implementation.
  - Staffs recommend next APR examine ways to accelerate parastatal reforms and progress in expenditure management and audit systems for non-privatized public enterprises.
  - Government commitment to a results-based management system with performance contracts for heads of parastatals is welcomed.
- Financial sector reforms:
  - Reforms planned for 2003/04 and 2004/05 were not fully implemented.
  - Delays: development and implementation of a financial sector strategy, introduction of a contributory pensions system, comprehensive insurance market development strategy.
  - Remaining specific reforms: restructuring and privatizing the National Bank of Kenya and other state-influenced banks, strengthening banking sector regulatory oversight.
  - Need for a diagnostic audit of the National Social Security Fund to guide financial restructuring.
  - APRs could better explain how to advance these reforms and report progress in the next APR.
- Investment and business environment:
  - Public investment was 20 percent below the budget in 2004/05 and 2005/06.
  - Private sector investment, though rising, fell far short of expectations.
  - Future APRs should:
    - Provide a clear diagnosis of weaknesses in the business environment and factors affecting public and private investment.
    - Specify key measures to improve the business climate.
    - Elaborate plans and timetables for implementing results-based management to create a leaner, more efficient, motivated civil service.
    - Include focus on licensing reforms with progress reporting.

### 5. Poverty reduction and equity — sectoral progress and priorities
- Agriculture and water sector reforms:
  - Support for agricultural and water policy reforms; early results visible.
  - Reforms of agricultural institutions and parastatals, revitalized market information systems, reinstatement of disease-free zones expected to contribute to gains.
  - Success in helping smallholder horticultural producers comply with new EU food quality and safety regulations highlighted.
  - Coffee marketing reforms expected to improve farmers’ share of receipts.
  - Several poverty and social impact analyses underway (including one on maize policy) to inform reforms.
  - Water sector reforms created a new framework for sustainable service delivery and commercialized operations in several urban areas.
  - Challenge: maintain momentum in reform implementation.
- Disaster risk reduction and contingency planning:
  - Second APR documents government efforts on drought- and flood-related emergencies (including drainage systems in flood-prone areas).
  - Future APRs should highlight additional flood risk reduction measures (e.g., water catchment restoration).
  - Early warning system was effective in averting a potential humanitarian crisis from severe drought in 2005–06.
  - Establishment of an emergency contingency fund in the budget should enable meeting future emergency funding needs while maintaining macroeconomic stability.
  - Staffs welcome government draft strategy for long-term development of arid and semiarid lands; future APRs could highlight elements and implementation plans.
- Education:
  - Successful implementation of the Free Primary Education program is welcomed; aided by strong government leadership and a comprehensive strategy aligning development partner support.
  - Remaining challenges: improving quality, expanding secondary education opportunities, overcoming regional and gender disparities in access.
  - Completion of the five-year strategic plan for 2003–07 by the Ministry of Education will guide programs, harmonize development partner support, and help Kenya achieve the education MDG.

### 6. Health sector strategy and sector-wide approach (SWAp)
- A national health strategic plan has been completed. This plan is expected to form the basis for more effective donor support in a sector-wide approach.
- Such support from the Bank and other development partners seeks to help strengthen the country systems in the health sector after Government and Bank reviews confirmed concerns about corruption risks.
- The Bank’s contribution to a health SWAp will proceed when strengthening steps have been completed in the Ministry of Health.
- In the meantime, the Bank will support and scale-up successful health initiatives in entities other than the Ministry of Health that deliver health care to the poorest of Kenyans (e.g., microfranchising schemes).
- Strong and focused government leadership will be critical in encouraging development partners to align their support behind the strategy.
- Without resolving these issues, achievement of the health sector MDGs by 2015 would be difficult.
- Staffs suggest that the next progress report discuss in greater detail the actions being taken to improve health indicators in Kenya, which have been declining for some years.

### 7. Kenya National AIDS Strategic Plan 2005–2010 and governance in HIV/AIDS programs
- Staffs are encouraged by the quality and the results-focus of the Kenya National AIDS Strategic Plan for 2005–2010 and urged greater attention to the management of governance issues.
- Beyond ongoing actions to reduce corruption risks in HIV/AIDS programs administered by the National AIDS Control Council (NACC), the challenge is to ensure implementation with improved coordination, strengthened management and governance, enhanced support for mitigation (including for orphans), accelerated treatment programs, and continued emphasis on prevention.
- Addressing management problems that impede service delivery at the NACC is critical to regain confidence of Kenyans and development partners.
- A monitoring and evaluation framework has been developed and should be used regularly to assess performance.

### 8. Inequality and access to basic services
- High inequalities in Kenya—between rich and poor people, between women and men, and between regions—are an obstacle to poverty reduction.
- Women and men have highly unequal access to basic social services (water, sanitation, education, and health), and assets such as land.
- High levels of inequality mean that growth must be rapid and pro-poor to significantly reduce poverty.
- Government needs to put in place measures aimed at improving access to public services and removing barriers that prevent access to credit, land, and other productive resources.

### 9. Governance: recent reforms, remaining weaknesses, and recommended reporting
- Staffs welcome emphasis in the reports to governance and concur that weak governance, as manifested in endemic corruption and poor accountability in public resource management, is a key reason for poor economic performance of the past two decades.
- Critical reforms: reforming the judiciary, strengthening the rule of law and security, and implementing public administration reforms to improve transparency and accountability.
- Legislation enacted:
  - the public officer ethics act (2003);
  - the anti-corruption and economic crimes act (2003);
  - the government financial management act (2004);
  - the public audit office Act (2004); and
  - the public procurement and disposal act (2005).
- Other recommended actions:
  - Require public disclosure of wealth and asset declarations and their regular verification.
  - Complete ongoing audit of government procurements, publish findings, and further investigate and prosecute abuses.
  - Rapidly implement public financial management reforms.
  - Prepare anti-corruption action plans for all ministries; Kenyan Anti-Corruption Commission to assist ministries, departments, and agencies.
- Staffs note a governance assessment report for Kenya (World Bank experts, with IMF participation) suggests a decline in corruption during 2003–04 subsequently halted, with possible deterioration in judiciary and procurement operations (though not to pre-2003 levels).
- Progress reports should provide a more comprehensive assessment of governance and anticorruption efforts, including stakeholder feedback and implementation outcomes.
- Some prioritization evident in the three-year action plan launched by the government in June 2006 and the 2006/07 action plan intended to be implemented through the end of 2007.
- Next progress report should emphasize reporting progress and outcomes of implementation; transparency and timeliness are essential to inform stakeholders.

### 10. Conclusions and main recommendations for future progress reports
- Progress reports demonstrate increasing government ownership and a strengthening of monitoring and evaluation of IP-ERS and the development agenda.
- Both reports present extensive information on priorities, progress and challenges, providing a basis for frank and balanced assessment; the second report has substantial strengths.
- Targets for performance indicators are better defined and more realistic than in the first report.
- Recommendations to strengthen future reports:
  - Make reports more timely to influence budgetary allocations and set the policy agenda.
  - Present specific policy challenges and more information on government priorities for the coming year, especially in key areas for promoting growth and reducing poverty.
  - Draw on as many sources of information as possible for key IP-ERS performance indicators and candidly highlight unreliable or unavailable data.
  - Highlight areas where progress towards targets can be accelerated, such as under-five mortality and maternal mortality.
  - Highlight government’s progress and challenges in implementing key structural reforms—including investment climate and governance—that are essential to sustain and accelerate growth momentum.
- Data from the planned governance survey will help set baselines for measuring progress.

*Source: JSAN covering the IP-ERS APRs for 2003/04 and 2004/05.*

### 1. Kenya’s Investment Programme for the Economic Recovery Strategy for Wealth

### 1. Kenya’s Investment Programme for the Economic Recovery Strategy for Wealth and Employment Creation (IP-ERS) 2003–2007

### Background and reporting process
- IP-ERS (PRSP) launched in March 2004.
- Joint Staff Assessment discussed by World Bank and IMF Executive Boards on May 6 and May 10, 2004.
- Government submitted first IP-ERS Annual Progress Report (APR) for 2003/04 (July/June) in July 2005 and a second APR covering 2004/05 in September 2006; this JSAN covers both APRs.
- APR preparation was participatory: government officials, heads of parastatals, civil society, universities, research institutes, private sector, and development partners engaged in workshops and consultative forums.
- Both APRs were discussed at a government workshop (March 2005), the Consultative Group meeting (April 2005), a parliamentary subcommittee, and cabinet; comments were reflected in final reports.
- Both reports posted on the monitoring and evaluation department’s website within the Ministry of Planning.

### Monitoring and evaluation — findings and recommendations
- Progress reports address key Joint Staff Assessment recommendations:
  - Strengthening poverty analysis via data collection for the Kenya integrated household budget survey, the fourth participatory poverty assessment, and poverty and social impact analyses; these support a comprehensive poverty assessment expected to be completed during 2007.
  - Coverage of implementation of public financial management reforms.
  - Improvements in budget preparation and execution, including an expanded preparation timetable since 2004/05 leading to better prioritization.
  - Identification of capacity-building actions and envisaged donor support.
  - Efforts to strengthen systems for monitoring economic growth and poverty through administrative and survey data collection and development of methodologies.
- Delays in issuing APRs limit usefulness: reports come too late to feed into the next budget and do not address emerging major challenges such as:
  - (i) continued public concern about corruption (findings of NEPAD and other reports),
  - (ii) impact of higher global oil prices,
  - (iii) persistent delays in donor budget support.
- Revisions in IP-ERS indicator targets require clearer explanation, including harmonization of common external tariffs within the EAC Customs Union.
- Second APR improves by drawing more on domestic policy documents (sectoral strategic plans, budget processes), and presents improved information on:
  - real GDP growth,
  - core poverty spending,
  - a strategy on domestic borrowing,
  - inflows of grants,
  - costs of restructuring parastatals.
- Staffs recommend future reports draw more on the medium-term budget strategy paper to assess links between expenditure allocation plans and IP-ERS priorities.
- Urged actions to strengthen national monitoring and evaluation framework:
  - Rely less on survey data and more on existing administrative data sources.
  - Track resource allocations and expenditures and monitor results of surveys/censuses and analytical activities.
  - Strengthen Central Bureau of Statistics and statistical offices of line ministries; create strong linkages between the monitoring and evaluation department and the Statistical Capacity Building Project.
  - Passage of the freedom of information act and development of a communications strategy to improve information flow to citizens.

### Policies to stimulate growth — macroeconomic and structural observations
- Recent growth performance (revised national accounts, 1993 SNA basis):
  - 3.0 percent in 2003,
  - 4.9 percent in 2004,
  - 5.8 percent in 2005,
  - expected to exceed 6 percent in 2006.
- Staffs note growth remains too low to meet MDG poverty reduction targets; recommend maintaining macroeconomic stability and accelerating structural reforms to address:
  - high costs of doing business due to corruption, weak judiciary, insecurity,
  - poor quality and efficiency of infrastructure services,
  - excessive regulatory activities.
- Fiscal policy:
  - Prudent fiscal policy is key, particularly before elections.
  - Staffs welcome discussion on fiscal strategy and objective to reduce domestic debt to maintain fiscal sustainability.
  - Future reports should discuss consistency of medium-term budget strategies with debt sustainability.
- Public investment:
  - Public investment of only 3.2 percent of GDP (2003/04 report) cannot sustain strong growth.
  - Government increased infrastructure allocation in 2006/07 budget and has taken steps to contain unproductive expenditure.
  - Spending rigidities remain; need to improve wage bill management and implement new pay policy.
  - Absorptive capacity constraints in infrastructure ministries led to significant under-spending in development budgets.
  - Causes of poor absorption include weaknesses in donor fund management, procurement and accounting procedures, and investment planning.
  - Staffs urge addressing these constraints and enact consistent implementation of the 2005 procurement act with prompt operationalization of the Public Procurement and Oversight Authority.
- Revenue and customs:
  - Customs reforms need revitalization now that the EAC customs union is in place and a new IT system established.
  - APRs discuss expanding the tax base but could better balance discussion of tax incentives and exemptions and their distortionary potential (as seen in the 2006/07 budget).
  - Next reports could discuss progress with harmonizing tax incentives within the EAC.
- Public Expenditure Management (PEM):
  - PEM identified as key to achieving IP-ERS targets and strengthening governance.
  - Most PEM-APP benchmarks: 10 out of 16 are still to be met.
  - A previously achieved benchmark on classifications requires sustained use of functional classifications in reporting.
  - Reforms lag in fiscal transparency, IFMIS implementation, management of contingent liabilities, and legal framework.
  - Full IFMIS implementation will provide significant benefits.
  - Second APR lists needed actions: regular public expenditure tracking surveys, introduction of a risk-based audit system.
  - Donor coordination improving in context of government’s revitalized public financial management strategy launched June 2006; planned support includes a US$115 million multi-donor basket fund.
  - Fiscal reporting and performance budgeting should be enhanced to strengthen links between policy and budget allocations.
- Monetary policy:
  - APRs need stronger analysis of monetary policy.
  - 2003/04 report limited analysis to a narrow underlying inflation measure (excluding food, energy, transportation) and credit to private sector, failing to recognize risks from subsequent sharp credit growth and inflation.
  - 2004/05 report acknowledges headline inflation rise due to oil and food prices but should also recognize impact of loose 2003/04 monetary stance that resulted in highly negative real short-term interest rates.
  - Future reports should provide candid, up-to-date analysis of monetary performance and how to strengthen monetary operations.
- External competitiveness and trade:
  - Given importance of external demand, more attention needed on competitiveness in light of Kenyan shilling appreciation and recent inflation increases.
  - Staffs encourage structural reforms and infrastructure improvements to enhance productivity.
  - Trade reform priorities:
    - Kenya implementing three-tiered EAC common external tariff (0, 10, and 25 percent).
    - Need to develop a trade strategy with EAC partners to lower trade barriers against the rest of the world and derive efficiency gains.
    - Authorities encouraged to work with EAC partners to further reduce the maximum common external tariff, with no exceptions, by 2010.
    - Remove non-tariff barriers (notably road blocks and checkpoints).
    - Complement actions with WTO efforts to gain greater market access for Kenyan exports.
    - Identify measures to address adjustment costs from trade liberalization, including revenue losses.
    - Strengthen reporting on progress in regional integration in COMESA and EAC and possible ways to rationalize regional trade arrangements in context of economic partnership agreements with the EU.

### Structural reforms, financial sector, investment climate
- Infrastructure and parastatals:
  - Acknowledged reforms: concessioning of railways, restructuring commencement of Telkom Kenya, increased competition in telecommunications, management contract for Kenya Power and Light Company.
  - Government intention (2006/07 budget speech) to introduce private sector participation in Mombasa container terminal operations is welcomed.
  - Many reforms remain at study/strategy/action-plan stage; enactment of the Privatization Act is welcome and establishment of a privatization commission under the Act should facilitate implementation.
  - Staffs recommend next APR examine ways to accelerate parastatal reforms and progress in expenditure management and audit systems for non-privatized public enterprises.
  - Government commitment to a results-based management system with performance contracts for heads of parastatals is welcomed.
- Financial sector reforms:
  - Reforms planned for 2003/04 and 2004/05 were not fully implemented.
  - Delays: development and implementation of a financial sector strategy, introduction of a contributory pensions system, comprehensive insurance market development strategy.
  - Remaining specific reforms: restructuring and privatizing the National Bank of Kenya and other state-influenced banks, strengthening banking sector regulatory oversight.
  - Need for a diagnostic audit of the National Social Security Fund to guide financial restructuring.
  - APRs could better explain how to advance these reforms and report progress in the next APR.
- Investment and business environment:
  - Public investment was 20 percent below the budget in 2004/05 and 2005/06.
  - Private sector investment, though rising, fell far short of expectations.
  - Future APRs should:
    - Provide a clear diagnosis of weaknesses in the business environment and factors affecting public and private investment.
    - Specify key measures to improve the business climate.
    - Elaborate plans and timetables for implementing results-based management to create a leaner, more efficient, motivated civil service.
    - Include focus on licensing reforms with progress reporting.

### Poverty reduction and equity — sectoral progress and priorities
- Agriculture and water sector reforms:
  - Support for agricultural and water policy reforms; early results visible.
  - Reforms of agricultural institutions and parastatals, revitalized market information systems, reinstatement of disease-free zones expected to contribute to gains.
  - Success in helping smallholder horticultural producers comply with new EU food quality and safety regulations highlighted.
  - Coffee marketing reforms expected to improve farmers’ share of receipts.
  - Several poverty and social impact analyses underway (including one on maize policy) to inform reforms.
  - Water sector reforms created a new framework for sustainable service delivery and commercialized operations in several urban areas.
  - Challenge: maintain momentum in reform implementation.
- Disaster risk reduction and contingency planning:
  - Second APR documents government efforts on drought- and flood-related emergencies (including drainage systems in flood-prone areas).
  - Future APRs should highlight additional flood risk reduction measures (e.g., water catchment restoration).
  - Early warning system was effective in averting a potential humanitarian crisis from severe drought in 2005–06.
  - Establishment of an emergency contingency fund in the budget should enable meeting future emergency funding needs while maintaining macroeconomic stability.
  - Staffs welcome government draft strategy for long-term development of arid and semiarid lands; future APRs could highlight elements and implementation plans.
- Education:
  - Successful implementation of the Free Primary Education program is welcomed; aided by strong government leadership and a comprehensive strategy aligning development partner support.
  - Remaining challenges: improving quality, expanding secondary education opportunities, overcoming regional and gender disparities in access.
  - Completion of the five-year strategic plan for 2003–07 by the Ministry of Education will guide programs, harmonize development partner support, and help Kenya achieve the education MDG.

*Source: JSAN covering the IP-ERS APRs for 2003/04 and 2004/05.*

### 21. A national health strategic plan has been completed. This plan is expected to form

### _cr07160 - 21. A national health strategic plan has been completed. This plan is expected to form

### Health sector strategy and sector-wide approach (SWAp)
- A national health strategic plan has been completed. This plan is expected to form the basis for more effective donor support in a sector-wide approach.
- Such support from the Bank and other development partners seeks to help strengthen the country systems in the health sector after Government and Bank reviews confirmed concerns about corruption risks.
- The Bank’s contribution to a health SWAp will proceed when strengthening steps have been completed in the Ministry of Health.
- In the meantime, the Bank will support and scale-up successful health initiatives in entities other than the Ministry of Health that deliver health care to the poorest of Kenyans (e.g., microfranchising schemes).
- Strong and focused government leadership will be critical in encouraging development partners to align their support behind the strategy.
- Without resolving these issues, achievement of the health sector MDGs by 2015 would be difficult.
- The staffs suggest that the next progress report discuss in greater detail the actions being taken to improve health indicators in Kenya, which have been declining for some years.

### Kenya National AIDS Strategic Plan 2005–2010 and governance in HIV/AIDS programs
- The staffs are encouraged by the quality and the results-focus of the Kenya National AIDS Strategic Plan for 2005–2010 and urged greater attention to the management of governance issues.
- Beyond the ongoing actions to reduce corruption risks in HIV/AIDS programs administered by the National AIDS Control Council (NACC), the challenge now is to ensure that the plan is implemented, with improved coordination, strengthened attention to management and governance issues, enhanced support for the mitigation of the disease (including for orphans), accelerated treatment program for the infected, and continued strong emphasis on preventing the spread of the disease.
- Addressing the management problems that impede service delivery, for example, at the NACC, is critical to regain the confidence of Kenyans and of development partners.
- A monitoring and evaluation framework has been developed and should be used regularly to assess performance.

### Inequality and access to basic services
- High inequalities in Kenya—between rich and poor people, between women and men, and between regions—are an obstacle to poverty reduction.
- In particular, women and men have highly unequal access to basic social services (water, sanitation, education, and health), and assets such as land.
- The high levels of inequality mean that growth must be rapid and pro-poor to significantly reduce poverty.
- The government needs to put in place measures aimed at improving access to public services and at removing barriers that prevent access to credit, land, and other productive resources.

### Governance: recent reforms, remaining weaknesses, and recommended reporting
- The staffs welcome the emphasis given in the reports to governance and concur that weak governance, as manifested in endemic corruption and poor accountability in public resource management, is a key reason for the poor economic performance of the past two decades.
- Reforming the judiciary, strengthening the rule of law and security, and implementing reforms in public administration are critical to improving transparency and accountability.
- The staffs acknowledge the government’s efforts to implement policies and to put in place institutions to tackle corruption, and recognize that winning the war against corruption will take many years.
- They welcome the ongoing implementation of the Governance, Justice, Law and Order Sector Reform Program, which is assisting with policy reforms and institutional strengthening that are required to fight corruption and promote good governance across all levels of government.
- The reports indicate that the government has been implementing actions to improve governance and strengthen transparency and accountability across the public sector, but significant additional steps are needed to address important weaknesses in the governance architecture and secure better governance outcomes.
- The staffs welcome the enactment of:
  - the public officer ethics act (2003), requiring civil servants to file annual declarations of income, assets and liabilities;
  - the anti-corruption and economic crimes act (2003), which established the Kenya Anti-Corruption Commission;
  - the government financial management act (2004);
  - the public audit office Act (2004); and
  - the public procurement and disposal act (2005), which are aimed at improving governance and public service delivery.
- Other actions anticipated in the progress reports include:
  - requiring public disclosure of wealth and asset declarations and their regular verification;
  - completing the ongoing audit of government procurements, publishing its findings, and further investigating and prosecuting those found to have abused procedures; and
  - rapidly implementing public financial management reforms.
- The staffs welcome the inclusion of the government’s anti-corruption action plan for 2005/06 in the progress report.
- Staffs note that the government has ended land grabbing and harambees (coerced fund-raising), which were a significant source of state corruption.
- The staffs welcome specific anti-corruption measures in sectoral ministries, such as in education and water, and urge the government to prepare anti-corruption action plans—aimed at preventing corruption in the future—for all ministries.
- The Kenyan Anti-Corruption Commission can play an important role in this area by working with various ministries, departments, and agencies to develop such anti-corruption plans.
- Despite the steps taken to-date, governance remains weak.
- The staffs take note of the recent finalization and submission to the government of the initial governance assessment report for Kenya by a team of World Bank experts, with IMF participation.
- This comprehensive review of governance in Kenya includes empirical evidence suggesting that a decline in corruption during 2003–04 subsequently halted, and that there may even have been a deterioration in operations of the judiciary and in procurement, although not to the pre-2003 levels.
- The progress reports should provide a more comprehensive assessment of governance and anticorruption efforts, covering actions taken and feedback from key stakeholders, such as the Kenyan public, on the effectiveness of such measures and the agenda that still lies ahead.
- Some prioritization is evident in the three-year action plan launched by the government in June 2006.
- Building on this three year plan, the recently produced 2006/07 action plan, which also draws on the findings and recommendations of the governance assessment mission and is intended to be implemented through the end of 2007, represents a further step in the right direction.
- Moving forward, steps must also be taken to ensure transparency and the effective prosecution of corruption cases.
- The next progress report could give a greater emphasis on reporting progress, and outcomes of implementation.
- Transparency and timeliness will be essential to inform stakeholders of progress in implementing the governance action plan.

### Conclusions and main recommendations for future progress reports
- The progress reports demonstrate increasing government ownership and a strengthening of the process of monitoring and evaluation of IP-ERS and the accompanying development agenda.
- Both reports present extensive information on priorities, progress and challenges, providing a basis for a frank and balanced assessment.
- Compared to the first progress report, the second report has substantial strengths.
- Its focus on results and its comprehensive reporting on trends in key indicators establish its value as a performance assessment framework for government, civil society, and development partners to evaluate progress.
- The targets for performance indicators are better defined, and are more realistic than in the first report.
- The preparation process and the substance of future progress reports can be strengthened in several ways:
  - First, to be more useful in influencing budgetary allocations and helping to set the policy agenda, the reports need to be more timely.
  - Second, the reports could be strengthened by presenting specific policy challenges and more information on the government’s priorities for the coming year, particularly in the key areas for promoting growth and reducing poverty.
  - Third, the reports could draw on as many sources of information as possible with respect to the key performance indicators in the IP-ERS, and candidly highlight areas where data are not reliable or not available.
  - Fourth, the reports should highlight areas where progress towards targets can be accelerated, such as in under-five mortality and maternal mortality.
  - Fifth, the reports could highlight the government’s progress and challenges in implementing key structural reforms—including in the areas of investment climate and governance—that are essential to sustain and accelerate the current growth momentum.
- Data from the planned governance survey will help set baselines for measuring progress.

*Source: _cr07160 - 21. A national health strategic plan has been completed. This plan is expected to form*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07160.pdf_