The Constituency Development Fund (CDF) model came to exist in 2003 immediately after President Mwai Kibaki’s NARC government assumed power. The CDF Act of 2003 set up the CDF kitty.
Its primary objective was to address poverty at the grassroots level. It would achieve this by dedicating at least 2.5% of the national government’s ordinary revenue to grassroots development.
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Parliament first amended the CDF Act of 2003 in 2007. In January 2013, Parliament repealed the CDF Act 2003 (as amended in 2007) and replaced it with the CDF Act 2013. The latter was to align the law governing CDF with the devolution concept in the ’new’ Constitution, 2010.
Several main changes that Parliament made to the CDF Act 2013 include:
- reducing the size of the CDF Board from seventeen to eleven members;
- introducing a new officer (the Corporation Secretary) as secretary to the Board;
- states clearly the separation of roles between the executive and the legislature (parliament);
- a change in the mode of appointing the CDF committee members, and
- new roles for the area MP as an ex-officio member rather than Chairman of CDF committee.
Another change mandated the National Treasury to release funds to the CDF Board through the Devolution Ministry on a quarterly basis.
Since the CDF came into place in 2003, the national government had disbursed KES 137.7 billion to various constituencies across the country in 10 years to stimulate development. The now-defunct CDF website stated that CDF had set up more than 85,000 complete projects or projects in various stages countrywide. The website also indicated that a substantial proportion of these projects were complete.
“The impact of these projects is already being felt especially in the key sectors funded by CDF, like education (around 55 per cent of CDF allocations), Health (six per cent), and Water (11 per cent). Largely, these are projects that have been identified by the community on priority basis and their completion and utilization should therefore be satisfying genuine needs.” (from defunct CDF website)
Meanwhile, the ’new’ Constitution 2010 brought new changes in the system of governance. Decentralization (devolution) replaced the centralized system of government that existed prior to the new Constitution.
Devolution established two systems of governance, the national, and the county governments. The law recognized only the two levels of government as the mechanisms to share all the resources. A High Court ruling on the legality of CDF highlighted this aspect exclusively.
The Constitution set up the counties as the centres of regional development and governance and not the constituencies. Hence, CDF interfered with the functions of the county governments. The High Court ruling in Section 102 says the following,
We recall the submission made by the Attorney General that a constituency is a unit representation for purposes of election of National Assembly members and it is taken as a sub-unit of a county and that its administration and development agendas are under the administration of the Governors and the county government. We have deliberately discussed here the submission by the Attorney General because he has, in our view answered, and clarified the question at hand. We are in agreement with the Attorney General that a constituency is a unit of representation of the people in the National Assembly and in that context, several constituencies form a county. How then is the CDF, which is funded by the national government, supposed to undertake projects within a constituency, which is under the administration of the county government and not interfere with the county government functions?
By managing the implementation of CDF, MPs usurped the roles of the Executive at both the National and the County levels. The major roles of the MPs major roles are representing the people, making laws in the National Assembly and overseeing the National Executive. They should not in any way to manage funds, which is the work of the Executive, according to the Supreme Law.
Also, by managing CDF, MPs violate various principles of governance as the petitioners in the ruling that invalidated CDF stated. They include:
- the rule of law,
- separation of powers,
- checks and balances,
- public finance management,
- division of power between the national and the county governments,
- transparency and accountability, and
- good governance.
To circumvent the court ruling that invalidated CDF, MPs amended the law on CDF. They renamed the new law the National Government Constituency Development Fund ( NG-CDF) Act. However, civil society challenged the new law in the Court of Appeal.
What the MPs did with the new CDF law is to re-introduce CDF as NGCDF. It will be a grant from the national government’s equitable share of revenue. The purpose of NGCDF is to perform specific national government functions at the constituency level.
Clearly, the MPs being part of implementing NGCDF is a conflict of interest. They are also involved in oversight of the NGCDF expenditure. This shows the MPs are hell-bent on continuing their iron grip on the fund. This is not in good spirit since the MPs want to continue patronizing the fund for political gain.
However, the MPs should put their selfish interests aside and do away or let go of the (NG)CDF to respect the law of separation of powers. It will also enhance transparency and accountability in their work through proper checks and balances.
UPDATE: In 24th November 2017, three Court of Appeal Judges overturned the High Court ruling that had declared CDF unconstitutional. They ruled that except for some sections, the entire CDF Act 2013 was still implementable and fully operational as a law. The battle over the legality of CDF moved to the Supreme Court, which overturned the Court of Appeal’s ruling in August 2022, thus upholding the High Court’s ruling declaring CDF unconstitutional.