APRM • SECOND COUNTRY REVIEW REPORT OF THE REPUBLIC OF KENYA commands positive investment climate. The national Trade policy appropriately spells out the Government’s aspiration for poverty reduction and sustainable economic growth. 277. Despite these laudable successes, economic policy management faces challenges. The levels of poverty, inequality and unemployment remain high, particularly among vulnerable groups and the rural cohorts. Inequality is high and manifests itself in various forms. This suggests that current economic policies and management practices have not been inclusive. The economic policy framework therefore needs to incorporate a resource redistribution policy in order for the economic development plans to deliver economic well-being that is inclusive, particularly to address poverty, inequality among different groups and regions, as well as provide productive employment. 278. The bottom-up planning that the 2010 Constitution has provided has improved public participation in the development and implementation of government policies and programmes. Nevertheless, compared to expectations, stakeholders’ involvement in planning and implementation policies still remains very low. Various reasons are responsible for the low public participation. Among them are distance and the high burden of transportation cost, inadequate understanding of the policies and programmes of the government, and poor publicity. Others cover such issues as poor communication, where, in some instances, documents or materials which form the basis of discussions at the public forums are only circulated at the venue of the meetings without prior notice, and at times, notifications were only given a number of days after the day of the consultation. The low participation in economic decision budget process and planning is a serious impediment to communities to fully own the programmes and projects. 279. Significant developments have occurred in the public finance management domain. In 2004, the Government commenced the use of the Medium Term Expenditure Framework (MTEF) and the annual budget is linked to it. This suggests the acceptance of fiscal planning and it has been sustained. The government has enacted laws with respect to financial management in line with the procedures and timelines prescribed in the Constitution. An over-arching legislation is the Public Finance Management (PFM) Act, 2012 stressing transparency and accountability in the use of public resources for efficient service delivery. The Constitution and the PFM Act 2012 have transferred important oversight fiscal functions from the executive and National Treasury to parliament, both at the national and county government levels. In 2009, the Parliamentary Budget Office was established to provide strong technical support for legislators to properly scrutinize the budget at the different stages. 280. The Public Expenditure Financial Accountability (PEFA) evaluation technique was used to determine the extent of financial management. The budget of the national government shows some degree of comprehensiveness, making it possible for the parliament and the public to examine the budget proposals. Legislative scrutiny of the budget and expenditure tracking has improved. However, the payroll system and the procurement process are hardly described in details to enable adequate assessment of the strengths and weaknesses. A huge wage bill is inclined to weaken financial control and corruption. Effective management of payroll will, to large extent, put government expenditure under effective check. When | 134 |